Gee & Ursula debate suspension of downtown business taxes

Seattle business leaders are asking the city to suspend the Business & Occupation (B&O) and JumpStart taxes for the next three years as a way to revitalize downtown.

In a letter sent to Mayor Bruce Harrell, obtained by GeekWire, three different organizations, including the Downtown Seattle Association, also asked the city not to enact any new taxes or fees. City Council Budget Committee Chair Teresa Mosqueda said the B&O tax makes up 20% of the city’s general fund and is expected to take in $335 million this year.

“Let’s be real. We always talk about all of the money here in Washington, and we have 11 of the top Fortune 500 companies right here in this state,” KIRO Newsradio host Gee Scott said. “But at the same time, we can’t get true prosperity through taxes because of how terrible the tax system is in Washington.”

“Many folks here already feel heavily taxed. A lot of the working class and the middle class, I’m sure feel this way,” KIRO Newsradio host Ursula Reutin said. “Wealthy residents pay tax rates many times lower than the rates other people pay. I’m talking about underfunding of K-12 education. I’m talking about higher education. I’m talking about childcare. I’m talking about public health. I’m talking about behavioral health care. All of those different things.”

Big ideas for the city from the head of the Downtown Seattle Association

But the question is, should those taxes be suspended for three years for downtown businesses to revive downtown?

“No. We’re constantly talking about all of the different services that usually get hurt. Who’s going to get hurt from this? Who usually hurts by the unfair tax system every single time the economic inequality, inequality in neighborhoods because of the first thing that tends to go,” Gee said. “They don’t go out of the rich neighborhoods and take away those services. They go to the poor neighborhoods and start cutting those budgets first. So no.”

Washington ranks just 31st among the 50 states in the percentage of the total income of the state’s population going to state and local taxes.

“I agree with the request to not add any new taxes or fees right now. I agree with that. That seems reasonable,” Ursula said. “But suspending the B&O tax and the JumpStart tax would have too much of a detrimental effect, and could result in maybe some unintended, but very negative, consequences.”

The JumpStart tax was passed in 2020 despite a lot of pushback. It targets employers with more than $8 million in annual payroll expenses. Big businesses have to pay a tax for all their employees who make at least $150,000 a year. And it actually brought in $34 million in 2021, which was more than expected. Most of that money goes toward affordable housing.

“Is Amazon hurting right now? Are they hurting? No, no, absolutely not. Their profits doubled last year. Is Starbucks hurting? No. They had record profits in 2021. And they beat expectations and three out of four quarters last year,” Gee & Ursula Show producer Andrew Lanier said.

“Two big businesses in this area need a break? No. This focus is on just downtown Seattle and the downtown core. Well, what about the businesses in Ballard or Phinney Ridge and SoDo? Remote work has carved out a lot of the city. It’s just the most visible in downtown. And if we’re going to be applying tax breaks for just one area of the city. Absolutely not.”

Listen to Gee Scott and Ursula Reutin weekday mornings from 9 a.m. – 12 p.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.