Why we oppose the City of Seattle's head tax

| May 25, 2018
Dear GSBA members and friends,
GSBA is vehemently opposed to the City of Seattle imposing a head tax on employees. Taxing a business for hiring employees is a job killing and poorly thought out way to raise revenue. Jobs are good for the economy, and Seattle has been the benefactor of incredible job growth in our region. Certainly, the rapid pace of growth has caused challenges in our infrastructure, housing, and yes, a strain on our City budget. But a head tax is not the answer.

As a progressive business chamber, we are fully committed to being a partner in addressing the crisis of homelessness in our community. We also are aware that some of the solution may include a need for new revenue. We are not an anti-tax organization. We see economic development, more jobs - not fewer - as part of the solution.

Make no mistake, if taxes on hiring and jobs continue to rise, businesses will hire fewer people, and there will be fewer jobs. 

Long before the Head Tax went to vote, GSBA vocally opposed the proposal. Staff, volunteers, and members have spent countless hours working on this issue including writing letters to City Council; signing on to letters from others; testifying before committees; discussing the issue as part of GSBA's Public Policy Task Force, Public Policy Council, Small Business Council, and Corporate Advisory Board; as well as co-authoring an Op-Ed in the Seattle Times

We believe GSBA's leadership played a key role in raising the threshold from eight million to 20 million and the amount per employee lowered from $500 per head to $275 per head and the inclusion for a sunset provision which will take place in five years. It was largely GSBA members who spoke out at City Council hearings and made their business voices heard.

GSBA feels strongly that before our City asks for more money, we need a clear analysis of the scope of the homelessness problem and exactly what will be needed to address the issue. 

We also need a full analysis of what we currently collect in taxes, from whom, what goes towards homelessness, and what exactly is the gap in revenue needed to get this job done in a timely manner. The City currently spends and incredible amount of money on homelessness with poorly laid plans, little transparency, and even less accountability for meaningful outcomes. 

No other city in this country is so regressive to have both a B&O tax AND a tax on employment, both on gross income. Seattle small businesses already make up 60% of the City revenue, while only a fraction of that is devoted to supporting diverse and robust economic development. We understand that homelessness is at crisis level, and we know that there is a lot that needs to be done to solve this issue. But we also know that the solution cannot be carried on the backs of Seattle businesses alone, and certainly not without thorough analysis and a transparent regional plan.

The homelessness crisis does not begin and end at Seattle's borders. Our Mayor understands this, which is why regional leaders have convened One Table to bring together leadership from Seattle, King County, and surrounding cities to develop a collective, regional approach to bringing affordable and accessible housing to more of our citizens. Without a regional solution, a clear plan, and accountable reporting on milestones, we simply cannot continue to throw money at a growing problem that isn't making a dent in this horrendous epidemic. 

One point is clear - the City cannot and should not tackle this problem alone. An additional $50 million tax on jobs does little to help fund homelessness services and solutions compared to the billion already spent annually. In fact, the head tax may not be bold enough, although it does enough damage to business that it could actually be exacerbating the problem by encouraging business to go elsewhere. If the City is serious about combating the conditions of homelessness and finding real and lasting solutions, they will work with regional leaders, improve communication with and between service providers, build relationships with Seattle employers, and present a transparent plan for any additional dollars raised.

As you may know, there is a movement to gather signatures to place a referendum on the ballot to repeal the Head Tax. Several of our members have begun gathering the 30,000 (17,00 qualified) signatures needed, and GSBA fully supports their efforts and encourages you to sign on. 

We have also learned that some supporters of this tax have called for a boycott of small businesses who have spoken out against the head tax. Threatening the livelihood of small businesses simply because they are exercising their right to speak out is a strong-armed tactic that we hope will receive no support. GSBA strongly believes in civic engagement and applauds our members and all members of our community to stand up and speak out for what you believe in. The divisiveness and polarity in this city will not have a good outcome and leads to poorly thought out decisions such as the passage of an employee head tax.

We encourage you to contact us with your thoughts and ideas, continue to attend City Council meetings, add your signature to the referendum to repeal, and to contact your local and regional governments to express your concerns. Homelessness, economic development, and business representation are important conversations, and there is more than enough room at the table for everyone to contribute to the solution. 

For Equality,

Louise Chernin
President & CEO