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Seattle City Council says yes to 'JumpStart Seattle' — a new tax on high salaries

Seattle City Council member Teresa Mosqueda discusses her payroll tax proposal, called JumpStart Seattle, during Monday's council meeting.
Jennifer Wing
/
KNKX
Seattle City Council member Teresa Mosqueda discusses her payroll tax proposal, called JumpStart Seattle, during Monday's council meeting.

 

The Seattle City Council passed a new tax on big businesses, dubbed JumpStart Seattle. Supporters say this is much needed relief and opponents fear it will push jobs out of the city.

Businesses with at least $7 million in overall payroll would have to pay a tax on high salaries, starting at $150,000. The percentage paid out increases as salaries go higher.

It’s estimated that this will bring in more than $200 million a year. Council member Teresa Mosqueda was the measure’s main sponsor. During the council meeting, which was held remotely due to the pandemic, Mosqueda noted that large businesses such as Amazon are doing very well in these hard times.

“So we’re asking them through this JumpStart proposal to contribute a small percentage of those profits to saving our local economy, investing in neighbors and families so they in turn can invest in our local economy and we can come out stronger,” Mosqueda said.

The new tax passed 7-2; council members Alex Pedersen and Debora Juarez voted no. Juarez said she would have liked to see the measure be decided by voters.

The tax will sunset in 20 years and it will be repealed if a similar tax is ever passed by the state or by King County.

The tax goes into effect next January. In the first year or so, most of the money raised will go to COVID-19 relief. In the next few weeks, the council will craft a detailed spending plan for the future and an oversight committee will keep track of where the money goes.

Meanwhile, Seattle is facing at least a $300 million shortfall due to the pandemic. The Downtown Seattle Association, an organization whose mission is to create a vibrant downtown, is against the tax.

The organization released a statement expressing its opposition.

“Taxes are counterproductive to job creation and have a history in Seattle of being enacted and then later repealed," the letter says. "This tax should follow that fate.”

Jennifer Wing is a former KNKX reporter and producer who worked on the show Sound Effect and Transmission podcast.