The Overcast: City Council Member Proposes Business Head Tax For Homeless Services | KNKX

The Overcast: City Council Member Proposes Business Head Tax For Homeless Services

Oct 27, 2017

Seattle City Councilmember Mike O'Brien is proposing a so-called head tax on large businesses to pay for homeless services.

O'Brien sat down with Seattle Times political reporters Jim Brunner and Dan Beekman to talk about the goals of the tax and why he thinks it's time to pass it. 

The conversation above is an excerpt from The Overcast, the Seattle Times weekly politics podcast recorded at KNKX. To hear O'Brien explain more about the tax, how upcoming elections could shift the budget process, and about another proposal to study congestion pricing, listen to the whole episode.

You can also find The Overcast on iTunes, SoundCloud, TuneIn and Stitcher.

What is a business head tax?

It's officially called an employee hours tax. It's calculated based on the number of employees working at a business (alternatively, the number of hours worked by employees at the business). In the current proposal, only companies whose gross receipts reach a certain amount would have to pay the tax.

Which businesses would be affected?

O'Brien and his co-sponsor, Councilmember Kirsten Harris-Talley, are proposing that only businesses grossing $5 million or more would have to pay the tax.

How much would they pay?

As the current proposal stands, businesses would pay about $0.05 per hour per employee. That works out to be about $100 per employee per year.

How much would that raise for the city?

It's estimated the tax would raise between $24-25 million. But as the council continues its budget process, that estimate could change.

How would the funds be used?

O'Brien says about $18 million would go toward building affordable housing. The rest would be used for a variety of homeless services including building more low-barrier shelter options and outreach services.

Has the city ever had a head tax?

Seattle used a similar tax to fund transportation improvements between 2006-2009. It was ultimately repealed as an attempt to encourage business growth during the recession.