The Seattle City Council voted to move out of committee a payroll tax that would raise more than $200 million a year. Businesses with at least $7 million in overall payroll would have to pay a tax on salaries over $150,000.
The proposal passed out of committee with a 7-2 vote. It moves to a final vote before the full council on Monday. This plan dwarfs a similar payroll tax measure the council passed two years ago and then, under pressure, quickly repealed. That tax would have raised $47 million a year.
Council members Alex Pederson and Deborah Juarez voted against the current measure.
Juarez says in this current economic downturn due to the pandemic, the city needs to create jobs, not tax them.
“The Boeing Co. is laying off 10,000 workers in Washington state. Alaska Airlines is laying off 3,000 workers. This is in addition to the hundreds of local small businesses that are shuttered, stopped in their tracks. All of these workers are laid off. Our current unemployment rate is over 16 percent,” Juarez said during Wednesday’s meeting.
Juarez said she would not be opposed to putting the legislation before voters.
The bill was drafted by Council member Teresa Mosqueda. She calls this legislation “Jump Start Seattle.” The council also voted in committee to get rid of a 10-year sunset date. This would make the measure indefinite.
Mosqueda is proposing that the money raised by the tax be spent on easing the burdens created by the pandemic. Things like affordable housing, mortgage relief for homeowners, vouchers for groceries, and money for small businesses.
Meanwhile, an initiative backed by Council member Kshama Sawant would raise about $300 million a year from a payroll tax on roughly 800 businesses. It’s called the Tax Amazon Initiative.
The initiative has at least 27,000 signatures — enough for it to qualify for the November ballot. The campaign says it will wait to see the outcome of Monday’s full council vote and will decide next Wednesday whether to put its measure on the ballot.
