Seattle council committee passes big business tax
Seattle City Council’s budget committee voted to advance a tax on big business. Councilmember Teresa Mosqueda’s legislation now moves on to a full city council vote Monday afternoon.
The proposal, dubbed “JumpStart Seattle,” was unveiled in mid-June, and would raise over $200 million a year by levying a tax on corporations with payrolls over $7 million. Qualifying businesses would be taxed 0.7% for every employee making over $150,000, and 1.4% for employees making over $500,000.
Councilmember Kshama Sawant called the vote historic.
Mosqueda has assembled a large coalition of local businesses, unions, nonprofits, and more to support her proposal. Five of nine councilmembers have intimated that they support Mosqueda’s bill as is, including Lorena Gonzalez, Lisa Herbold, Dan Strauss, and Andrew Lewis. Councilmembers Alex Pedersen and Debora Juarez have expressed reservations, and had previously asked that the proposal be put to a ballot measure for voters to decide on. The Seattle Times reports Pedersen and Juarez were the two no votes (7-2) on Wednesday.
The Downtown Seattle Association also issued a letter Wednesday, expressing its “strong opposition” to the tax.
“Seattle faces its worst economic conditions in nearly 100 years, and together we must focus on recovery, getting businesses back open and workers back on their feet — not on new taxes and spending that will slow recovery,” the letter reads.
“I own Molly Moon’s Homemade Ice Cream and I feel very responsible for our 90 employees and their livelihoods and health. I urge all of you to vote yes on JumpStart Seattle,” Molly Moon Nietzel said during public testimony.
Councilmembers Sawant and Tammy Morales proposed their own big business tax earlier in 2020, which would have raised upwards of $500 million a year to put toward COVID-19 relief, affordable housing, and Green New Deal measures.
Mosqueda’s proposal borrows from the city’s emergency and general funds in the near term, and then pay that back when the tax begins to collect money in 2022. In the short term, it would direct spending toward addressing an estimated $550 million budget shortfall brought on by the COVID-19 crisis, as well as a series of relief programs.
The Times reports that the council approved Sawant’s amendment to eliminate a 10-year sunset clause. It also approved a clause to eliminate the tax altogether if the state or county were to adopt a similar tax.
After that, money from the measure would go back into affordable housing, “equitable development,” and supporting local businesses. It’s estimated that roughly 97% of businesses in Seattle would be exempted from the tax — including grocery stores and government entities.