May 29, 2018 · Head Tax

Despite compromises on both sides of the initiative, it was a vote riddled with controversy as the Seattle City Council voted 9-0 to impose a head tax on local corporations. Monday’s vote approved the tax of $275 per employee per year on companies making more than $20 million annually.

The move was slammed by both Starbucks and Amazon, two companies that will be affected in a big way. Calling the tax proposal a “hostile approach”, Amazon made news a few weeks ago when it threatened to halt construction on a planned downtown skyscraper in response to the initiative.

Seattle mayor Jenny Durkan praised the legislation, saying that money generated will go a long way in helping to solve the city’s escalating homelessness crisis. The expected revenue of $48 million per year will be funneled back to the city to fund homeless services and provide more affordable housing. The initiative will go into effect on January 1, 2019, and will expire after a period of five years. Approximately two-thirds of the revenue will go directly into building affordable housing, a move hailed by many city officials who recognize the need to provide more options for lower-income residents. In addition to the new housing, money will be directed to support services needs including rental subsidies, shelter beds, and necessary garbage removal.

The compromise came after much debate over the original legislation which proposed a tax of $500 per employee. The original proposal would have generated $75 million in revenue
Some politicians in Olympia are already fighting back, with Republican State Sen. Mark Schoesler stating that he plans to introduce a repeal bill.

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