King County Councilmember Dunn: County head tax will hurt the poor

Two years after Seattle tried and failed to implement a head tax on the top 100 businesses, Washington legislators are trying to allow counties to pass a head tax on employers.

House Bill 2907 would allow counties with a population of 2 million or more to tax businesses with employees making at least $150,000 per year. The only county in Washington that meets this description is King County. Revenue raised would fund behavioral services, affordable housing, and solutions to homelessness.

“They’re calling it a super-wealthy, big-corporation, essentially, head tax, but if you look at the small print, every business — all the way down to 50 employees — is going to be subject to the tax,” King County Councilmember Reagan Dunn told KIRO Radio’s Dori Monson. “And so that’s a problem; it really is a small business tax.”

These small and mid-sized businesses are huge job creators in King County, Dunn said. He predicts that scope creep will set in, bringing the $150,000 requirement down to $50,000 or $40,000, so that many more small businesses are hit. He also predicts that the wording could change later on so that other counties are affected.

Dori Monson’s listeners weigh in on how Seattle head tax would affect them

“I think you have a lot of people, particularly in government, who haven’t spent five minutes in the private sector, who have no idea what it’s like to sign a paycheck,” Dunn said. “And they’re much more committed to growing their bureaucracies, and fiefdoms, and programs because they think they can do better in government.”

Another group in government, he said, “wants to punish successful people” by redistributing wealth from successful people to government programs.

Dunn predicts that the county head tax will end up hurting people with low incomes by forcing employers to cut jobs and raise prices.

“For those 50-, 60-, 70-person businesses, despite what the law says, they’ll find a way to pass that tax right onto the consumer, or perhaps onto the other employees not making that much money,” Dunn said. “That’s a real problem. This isn’t going to do what it intends to do.”

As an example, he said, when property taxes go up for homeowners, landlords pass those higher costs along to their renters.

“We all end up paying for all of those new taxes,” Dunn said.

Local governments will be exempt from the tax, despite the numerous bureaucratic jobs that make six figures. If the King County Council passes it, the very people voting on it will be $150,000 earners whose employers are exempt from the tax.

“Nobody who is voting on it will ever be subject to it,” Dunn said.

The best way to combat this county head tax — especially if you are a small or mid-sized business — is to speak out about your struggles to your legislators and council members, Dunn said.

“Don’t let some of these large, super-large corporations that have a certain amount of guilt speak for you,” Dunn said. “Stand up for yourself; say, ‘Hey, I’ve had enough of this kind of stuff.'”

If the tax does pass the Legislature and council, Dunn plans to run a referendum against it. He hopes that the threat of a referendum could cause the county council to step back and repeal the tax, much like the city of Seattle did with its head tax in 2018.

“Obviously, the politicians don’t get it,” Dunn said. “The voters are going to have to have their say — which is why I want small businesses engaged in this.”

Listen to the Dori Monson Show weekday afternoons from 12-3 p.m. on KIRO Radio, 97.3 FM. Subscribe to the podcast here.