The GSBA Blog


GSBA Letter on Proposed Seattle Head Tax

| Nov 04, 2016

GSBA sent this letter to the Seattle City Council in response to a proposal to implement an employee headcount tax to fund the Office of Labor Standards.


Honorable Councilmembers,

GSBA, one of the largest chambers in Washington with over 1,200 members, has supported the creation of an Office for Labor Standards and was a champion that this office be independent from the Office of Civil Rights. Given the importance to economic health of small business in our city, GSBA feels it is essential that this funding come from the city’s general fund and we applaud that the Mayor’s budget proposal shows that the City’s general fund can indeed readily address a much-needed expansion of the office.

 

The current proposal by the City Council to fund the Office for Labor Standards with a head tax on businesses of all sizes is the surest way to discourage growth and give a disincentive to businesses considering expansion. The increase in fees would range from several hundred dollars per year to hundreds of thousands of dollars. For small businesses, increasing taxes on an already fragile existence in this increasingly expensive city could push them out of business or put a curb on any expansion. This increase would come as businesses in our city have consistently invested in what is best for this city and our communities. We already generate 50 percent of the tax revenue for the City of Seattle’s general fund and have been waiting for the city to do its part to demonstrate its support for our business community.

 

GSBA believes in businesses investing in their employees and treating them right. That is why we are a proud supporter of Initiative 1433 to raise the minimum wage and implement paid sick and safe time at the state level. We have been a good-faith partner to the City as Seattle proposes and implements additional labor standards every year, even as the concerns and realities of small businesses are dismissed at nearly every turn.

 

The cost of living and the cost of doing business is rising fast for Seattle, partially through the growth we are currently experiencing and partially through the intentional work of the City. While each individual policy might not have a significant impact, the cumulative effect is piling on our businesses, especially for the smallest businesses which anchor our neighborhoods and communities. A head tax on businesses makes it harder for businesses to increase their staff – the opposite of what should be the City’s goal.

 

As you continue your deliberations, we strongly urge you to support the Mayor’s proposal for continuing to fund the Office of Labor Standards through the general fund. Implementing our city’s labor laws does not require a separate funding source but a clear commitment of support that the City of Seattle understands that everyone benefits from a healthy business environment and therefore, funding for this vital office be supported by Seattle’s General Fund.

 

For equality,

Louise Chernin, President & CEO