Top Urbanist Action: Voice Support for Head Tax to Fund Housing

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Show Up and Support $75 million a Year for Affordable Housing: The committee vote on employee hours “head” tax is happening this week on Friday. The tax would raise an $75 million a year for affordable housing. This is a huge sum, especially compared to other sources, like Seattle’s housing levy, that is approximately $41 million a year. The tax would be assessed only on the largest businesses in the city, providing progressive stream of revenue. If you haven’t told the council you support this, make sure you get your comments in this week or show up for the committee vote on Friday.

Join the Community Planning Effort Around the Graham Street Station: The station was funded in ST3 and is currently in the planning stages. There is an ongoing grassroots effort to get the implementation right, including efforts to see the existing community reap the maximum benefits. The community workshop will be held on Saturday at Co Lam Pagoda and hosted by the Somali Community Services of Seattle. If you’re connected to the community surrounding Graham Street station, you’re strongly encouraged to participate in this planning process.

Join The Urbanist at Our Monthly Meetup: Today, Tuesday the 8th, we’ll be hosting our monthly meetup at the Elephant and Castle. Our guest this month is Shaun Scott, a Seattle-based writer, historian, and filmmaker. His work has appeared in Jacobin Magazine, Sports Illustrated, and the film journal Senses of Cinema. He is the author of the book “Millennials and the Moments That Made Us: A Cultural History of the U.S. from 1982-Present,” available now from Zero Books. He’s a writer for City Arts Magazine, where writes the thread Faded Signs, a bi-weekly column about popular culture in late capitalism. In 2009 he made the documentary film “Seat of Empire: Seattle Since 1909.” Scott is writing on a four-part series on Forward Thrust for The Urbanist. Check out the first part here.

Comment on the Seattle Center EIS: Key Arena at the Seattle Center will be renovated to have modern facilities and hopefully attract professional sports teams. We’ve covered these plans multiple times, including here and here. The city has completed it’s environmental impact statement and it’s open for public comment. A public meeting will be held on May 14th, but you can comment online now.

Attend an MHA Rezone Meeting Featuring District 1: The city is hosting numerous meetings about the last steps of the MHA rezones (besides defeating a homeowner group funded appeal). On Wednesday May 9th it will host a meeting featuring the District 1 rezone maps at Louisa Boren elementary school.

Attend a Sound Transit Meeting on the Ballard to West Seattle: There’s been a slew of these public meetings to gather input. Two more will happen this week. One will be on May 9th at Metropolist on First Avenue and the second will be on May 12th at Ballard Eagelson VFW.

Sound Transit Unveils West Seattle and Ballard Alternatives

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Owen does servicing and consulting for a software company to pay the bills. He has an amateur interest in urban policy, focusing on housing. His primary mode is a bicycle but isn't ashamed of riding down the hill and taking the bus back up. Feel free to tweet at him: @pickovven.

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Ron

I am a little confused about why you support the head tax.

The city of Seattle currently collects ~$110M a year in taxes/fees from construction. What do you think is going to happen to that money when Amazon pulls 7000 planned jobs and signals to the world that Seattle is closed for businesses? When the loss in one tax area is subtracted from the other, the tax will not net anywhere near $75M. What will happen to all the planned HALA upgrades that developers are supposed to seek when they are building market rate housing, as a means for funding thousands of units of amounts of affordable housing? What will happen to the thousands of workers whose businesses are patronized by those white collar workers, when job loss is the most frequent proximate cause of homelessness? What will happen to the thousands of blue collar workers who are building those buildings and the supporting infrastructure.

The #1 problem with the tax is that it is perverse. In its attempt to raise money to help with homelessness, it will undermine other key revenue sources for affordable housing and exacerbate one of the largest drivers of homelessness.

I understand the appeal. Constitutionally, a real progressive tax is impossible, so taxing large businesses is a sort of proxy. But of course, the proxy is just that. As has been pointed out, many of those large companies employ low wage workers and provide products to low wage consumers.

I agree that our large corporate citizens should contribute to the commons. If I had my druthers, corporate tax would be 15 points higher. But this tiny territorial tax isn’t going to actually improve the commons, at least not by much. And it’s burning a ton of political capital that could be used to actually improve the commons.

Matt

The head-tax isn’t progressive. It might not be regressive, but calling it progressive is deceiving. Also, revenue =/= profit. Gross taxable income is not the same as net income. Lots of media outlets seem to be confusing these terms.
One final thought: homelessness was a problem before Amazon and will be a problem during Amazon, and after Amazon. This isn’t Amazon’s making. Amazon didn’t “cause” or even contribute to the homeless crisis. The desire to “extract the pound of flesh” from the largest employer in the city is baffling. This city has grown so much in my 45 years here and, for the most part, for the better. Blaming Amazon for every ill is simply ignorant of the true issues within the city.

tk76

There needs to be a way to tax the high paid employees as opposed to the corporations. I’m not saying this as an apologist for the big business, but as a statement of basic economics. You can make a moral argument about why the companies should pony up, but the net result would harm the region in the long run for simple economic reasons. Seattle is a huge draw to people seeking high salaries in tech. But those same market draws are not nearly as strong for the actual companies that pay these salaries.

Tech workers are drawn to Seattle by job opportunities with high salaries and no income tax, while COL for these workers is much better than the Bay Area. So a small tax on their income (equal to the head tax) would not change this calculus and impact the local talent pool (which needs to be maintained to maximize the tax base a help local companies compete.) So in theory you can increase revenue from high income workers while still maintaining Seattle as a big draw for them.

On the flip side, while workers have a huge incentive to move to Seattle for high paying jobs… the actual corporations don’t have any inherent benefit from being located in Seattle as compared to any other city. There is no big geographic advantage, nor is there more tech grads than other regions. In fact they have to recruit most of their workers to move to the area, So if Seattle taxes the companies more than other cities there is not a strong reason beyond inertia for them to keep adding high paying jobs to the tax base… leading to less local services and a downward spiral.

Seattle realizes this, which is why they tried a type of income tax first and it was blocked by the state. But I think they need to find a more creative way to get this done so that the revenue comes from the highest paid workers and not the corporations. They problem is that most levers the city can use for revenue are inherently regressive. Again, I say this for economic reasons and am staying out of the moral argument. The moral argument, although sound, ends up hurting everyone in the long run by making the city less competitive. You want to increase both your tax base and your tax revenue as opposed to trading one for the other.

Preston Sahabu

I don’t see a way to accomplish what you propose without an income tax. A payroll tax is one approach, but then higher paid employees become more expensive to employ, applying downward pressure on their wages and the rest of the labor force in turn. Hence, not only are they regressive to the employee, but they’re regressive to the labor force as a whole.

In contrast, an employee hours tax means that an employee’s wage has no reflection on the tax that needs to be paid. Employers need work to be done in order to make a profit in the first place, so the hours are more or less fixed. As such, the employer benefits equally from cost saving in any sector as a result of the tax, rather than especially from cutting employee wages.

The fact that the city needs to worry more about its “competitive[ness]” than the welfare of its people is not a reflection of basic economics, but an indictment of capitalist democracy. This city is not hurting for wealth, as Amazon and Jeff Bezos show; rather it is hurting for just distribution.

tk76

I don’t disagree with the moralistic or philosophical arguments you are making about society and the moral obligations of the super-wealthy. And part of the solution should be trying to stroke the ego’s if the super-wealthy by partnering with them in charitable initiatives that give them free PR and give them more control over how their charity dollars are spent.

I also agree that the city has limited (mostly regressive) means to raise revenue. Certainly a graduated income tax would be the simplest and most logical solution… but the WA forbids it. However, going directly after the corporate bottom line is counterproductive. There has to be a way to get the higher paid employees and super-wealthy business magnates to contribute more in a way that does not put a tax on companies at a time when other cities are happy to go in the opposite direction (corporate handouts) to poach our high paying jobs.

I worry that people in Seattle are so used to a booming job market that they no longer realize that Seattle is not detached from the market forces that effect all cities. People will flock to a city that has high paying jobs thus increasing your tax base. Those workers will gladly pay higher taxes if that means they can live in a city with high paying jobs (look at SF and NYC.) But corporations have completely different driving forces.

Preston Sahabu

My moral and philosophical argument relates to the wealthy, but goes deeper.

Fundamentally, the vast majority of wealth is generated by workers, which is then extracted by corporations and the uber rich. Trying to regain that wealth by stroking their egos and encouraging philanthropic behavior is like bringing a knife to a gun fight — it can work in certain circumstances, but generally it’s a poor idea.

In the case of Amazon, they repress workers by putting warehouse runners and software engineers through grueling days. Their extortionist tactics against the EHT show that “asking nicely” does not work either. The fact that Amazon has an incentive to play cities off of each other, extracting more wealth by creating human suffering, suggests that large private corporations are the crux of the problem.