Washington lawmakers mull proposals to tax big businesses and billionaires

Facing a sizable budget shortfall brought on by the pandemic, Washington lawmakers are mulling various proposals to tax the state’s big businesses and billionaires.

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Seattle got a head start on that effort in 2020, when it passed its “JumpStart tax.”

That measure is set to raise an estimated $200 million a year by levying a tax on corporations with payrolls over $7 million. Starting in 2022, the city will begin collecting taxes from qualifying businesses at a rate of 0.7% for every employee making over $150,000, and 1.4% for employees making between $150,000 and $499,000. For companies with larger payrolls and employees making over $500,000, that rate could climb to as much as 2.1%.

As lawmakers in Olympia consider their own ideas for a similar tax, a variety of options are on the table to reconcile a smaller proposed tax with Seattle’s existing levy. That includes everything from phasing out JumpStart in favor of a state-level measure, to reducing the city-level tax to match the state’s.

That has some in Seattle pushing back, including Councilmember Kshama Sawant.

“Any attempt by state legislators to preempt or limit our Amazon tax in the future is profoundly anti-democratic, and serves only the needs of corporations like Amazon, the executives and the politicians who serve them,” she said in a written release on Monday.

That statement from Sawant came as part of a larger call on state lawmakers to match or exceed Seattle’s big business tax, rather than seek to reduce it.

“Working people face compounding crises in the pandemic and recession,” she outlined. “We desperately need statewide taxes on big business. That includes taxing capital gains, a wealth tax on billionaires, and taxing corporate payroll.”

A tax separate proposal is also working its way through Olympia in the form of HB 1406. That bill would impose a 1% wealth tax on the state’s billionaires, exempting their first billion dollars in assets. According to the state’s Department of Revenue, there are 100 state residents who would potentially qualify.

Among the supporters for that tax is Gravity Payments CEO Dan Price, who famously set his Seattle-based company’s minimum salary to $70,000 in 2015, while reducing his own pay to that same level.

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Price sees the proposal as a means to fix what he labels “the most regressive tax system in the entire United States,” as well as help bridge the state’s sizable budget shortfall brought on by the pandemic.

“We have a $3.3 billion shortfall,” he told KIRO Radio’s Gee and Ursula Show. “And so state lawmakers have to get that from somewhere and they could … cut into programs that benefit kids like schools, health care, those sorts of things. Or the simple, obvious solution is to just barely fix how out of whack our tax system is by charging the people on the very, very top a little bit more.”

HB 1406 is set for a hearing in the state’s House finance committee Tuesday afternoon.

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