Citizens of Seattle should seek an initiative to overturn the destructive, opportunity-killing head tax the City Council approved Monday. This is needed to reverse the city’s hostility to business.
In affirming its hostility to employers with a punitive job tax, the Seattle City Council is causing major harm to the city’s economic stability and long-term prosperity.
A majority of council members are up for election next year and should face consequences, but that may be too late.
Citizens of Seattle should respond with an initiative to the people, rejecting this harmful tax on jobs before it takes effect in 2019. Only 21,770 signatures — 10 percent of the turnout in last year’s mayoral race — are needed to get it on the ballot.
Such an initiative should also address the underlying need to better help the homeless population by calling for an independent review of Seattle’s homeless spending to increase efficiency and help more people. Spending is approaching $70 million this year.
The problem is not just that Seattle is taxing jobs or targeting any particular company. The problem is that City Hall is destroying the city’s business climate, causing damage that far outweighs any benefit of the temporary head tax.
Monday’s passage of the $275 per employee tax on large employers for five years is the latest and perhaps final straw. Its unanimous council support confirms institutional bias against companies that create employment and generate most general-fund revenue.
Every council member and Mayor Jenny Durkan sided with those who vilify employers and wrongly blame them for social problems and City Hall’s repeated failures to resolve longstanding problems.
If the tax remains and Seattle doesn’t end its ideological crusade against employers, many thousands of jobs will go elsewhere or go away. That’s the opposite of what’s needed to address affordability and homelessness challenges.
Creating employment is what enables people to exit homelessness, start careers and afford to live in a region with irreversibly high housing costs.
Yet council members Bruce Harrell, Sally Bagshaw, M. Lorena González, Lisa Herbold, Rob Johnson, Debora Juarez, Teresa Mosqueda, Mike O’Brien and Kshama Sawant chose instead to make a hollow political statement about progressive taxation. They’re also sabotaging city efforts to be more efficient with homelessness spending.
Remember, Seattle is just starting reforms based on a 2016 study that found its homeless programs suffer more from weak management and lax contracts than funding shortfalls. Now, before showing any reduction in homelessness, the council is more than doubling funding over 2016 levels by adding the head tax.
Durkan’s support for the tax is disappointing. She squandered her first big opportunity for bold leadership and balancing the council’s extremism. Her ballyhooed compromise over the tax’s scope still imposed a job-killing tax.
Durkan should have consulted a fellow former appointee of President Obama, Chicago Mayor Rahm Emanuel. After taking office in 2011, Emanuel worked with that council to eliminate a $48-per-head tax.
“The head tax is a job killer,” he said at the time. “Eliminating the head tax is the right thing to do for businesses big and small, and it’s the right thing to do to secure Chicago’s future.”
If a $48 annual head tax kills jobs in a city that’s already succeeded in luring clean, well-paying jobs from Seattle, imagine what will happen with Seattle collecting $275 per head.
Companies now in Seattle will consider locating jobs elsewhere or reducing employment. Future companies will give second thought to expanding or starting ventures in the city.
When the economy slows again, companies will be looking for ways to reduce expenses.
City Hall is also jeopardizing Seattle’s chances of remaining a mecca for employers developing next-generation technologies. They brought a diverse, educated workforce that supports schools and makes Seattle a better place.
Those who understand how much harm the City Council is causing and want to ensure a better future for everyone in Seattle should take action. Seattle’s charter gives the people power, via initiative, to overturn harmful decisions by their elected representatives, and now is the time to use it.
Information in this article, originally published May 15, 2018, was corrected May 16, 2018. A previous version of this story incorrectly stated the amount of a Chicago head tax phased out starting in 2011. It was $4 per month or $48 per year.