The Seattle City Council may have axed the proposed “head tax” to fund homelessness services on Tuesday, but councilmembers pledged to reconsider a reworked tax in the near future.

The council voted 5-4 with Councilmembers Lisa Herbold, Mike O’Brien, Kshama Sawant, and Kirsten Harris-Talley supporting the tax and Councilmembers Debora Juarez, Sally Bagshaw, Lorena González, Rob Johnson, Bruce Harrell rejecting the employee hours tax.

Co-authored by Councilmembers Harris-Talley and O’Brien, the Housing, Outreach, and Mass-Entry Shelter “HOMES” proposal got its funding by charging businesses grossing more than $10 million a year 6.5 cents per employee per hour. The money would fund new affordable housing and homelessness services. Supporters emphasized that tax would have only affected the highest grossing five percent of businesses while opponents of the tax questioned taxing a business on gross revenue rather than net and the possible economic consequences. The tax would’ve taken effect in January 2019.

86 Homeless People Died in 2017 As Unsheltered Count Climbed to 5,485

It has been more than two years since the homelessness crisis was declared a state of emergency. In 2017 alone 86 homeless people have died. King County’s unsheltered population climbed to a record 5,485 based on the annual one night count in January. For years, local activists have been out at the communities listening and working with the homeless population in an effort to improve their difficult situations.

Recently the Seattle Transit Riders Union (TRU) launched the Housing for All campaign. The campaign seeks to tie the housing crisis with the homelessness crisis by recognizing that homelessness cannot not be resolved without preserving and expanding deeply affordable low-income housing. The campaign calls upon local elected officials to acknowledge this relationship and take appropriate action. For the past four months the campaign has petitioned, met with councilmembers, worked with encampments, staged a “die in”, occupied city hall through the night, spoke at countless council meetings, and started a broader movement to end homelessness in Seattle.

Bringing Back the Head Tax

At the budget meeting, this passion and drive was clearly visible in the testimonies by TRU members, the Raging Grannies, Downtown Emergency Service Center (DESC) and citizens. So even though the head tax was not passed, there was palpable pressure on councilmembers to take action. Councilmembers Juarez, González and Bagshaw all alluded to proposing a reworked “head tax” with varying timelines. Councilmember González even said she’d introduce a head tax herself if the council stalled.

Councilmember O’Brien made it clear he would work with all councilmembers to flesh out HOMES’ funding source, but also that he didn’t want to stray from goal of a more equitable tax structure.

“It needs to be a progressive tax,” Councilmember O’Brien said. “We can’t simply go back to increasing the regressive sales tax that are already relied on for so many other things”.

Take Action

There is more work to be done! If you’re interested in getting involved with the Housing For All Coalition, come to the full council meeting on Monday, November 20, when the city council will take the final vote on the 2018 Budget. The meeting starts at 2pm but you should arrive by 1pm to make sure you have a seat. If you can’t attend, email your councilmembers.

Another way to get involved is to attend Housing For All action meetings every Saturday from 2 to 5pm at the Frye Apartments Community Room. With the homelessness crisis not getting any better, the time for action is now.

Call to Action: Support the Housing For All Campaign

Previous articleST Board Signs Off on Three Affordable Housing Agreements
Next articleNicer Than They Look
Born and raised in the CD/ Capitol Hill area, Lizzy has a unique first hand understanding of Seattle's rapid development. Lizzy hopes to use her local expertise to instill change so that Seattle can become equally accessible for all. She’s got a passion for parks (some might call her the local Leslie Knope), transportation and local politics. When she’s not attending community forums you can find her dancing, climbing and practicing yoga around the city. Follow her on Twitter @holalizzy.

1 COMMENT

  1. One of the concepts in economics that is most misunderstood is the “incidence” of taxation. The welfare burden of a tax may not fall upon the payer of the tax, but elsewhere. Since debates about taxation are often about equity and fairness, rather than economic efficiency, badly designed tax proposals are the inevitable result.

    Taxation has both direct impacts (on the market for the good or service being taxed) and indirect impacts (on other markets that are affected, on consumer incomes, and thus on the whole economy). The former are the easiest to understand.

    Excise taxes on commodities are often called “sin taxes” because they are partially designed to discourage some behavior. The classic sin taxes — taxes on liquor and tobacco — are taxes collected from producers and distributors rather than consumers. Although these taxes are not paid directly by consumers, the consumer bears most of the economic burden. The fact that consumer demand is inelastic means that the effect of the tax is mostly isolated to that market, and even the effect on producers or retailers may be minimal.

    Less understood is that all taxation has such effects, not just sin taxes. Although Social Security taxes nominally are paid both by employee and employer, and in equal shares, it should be obvious that the incidence of the employer’s share really falls mostly on the employee. Furthermore, this burden is actually greater for lower paid employees, and some of it even falls upon unemployed persons who do not find work they would otherwise find.

    Seattle’s proposed Head Tax was the worst of the worst. Although it was conceived of by its supporters as a tax on large corporations, it was in fact a tax whose burden would be hardest on the lowest paid and most vulnerable workers in Seattle.

Comments are closed.