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Seattle council members propose tax on wealthy businesses

Council member Mike O'Brien and Kirsten Harris-Talley, the interim council member, are pushing a plan to establish a “head tax” on the city’s wealthiest businesses. (KOMO News)

SEATTLE -- For nearly two years Seattle has been in a “state of emergency” over homelessness. Yet, the tents, the car camping and lack of housing has continued to be discussed daily at Seattle City Hall.

During a news conference Thursday, council member Mike O’Brien said that even though the city’s budget has been dedicated to the crisis, it hasn’t been enough.

In response, O'Brien and Kirsten Harris-Talley, the interim council member, are pushing a plan to establish a “head tax” on the city’s wealthiest businesses.

Their plan is to tax the top 10 percent of highest grossing businesses- those earning $5 million or more annually- about $100 each year for every full-time employee they have. In the end, the council members hope the city can net about $25 million.

“We’ve made some good investments but what we’ve seen is the crisis around housing and homelessness continues to grow at a pace faster than we’ve even been able to address,” O’Brien said as he sat a conference table surrounded by reporters. “We think we’ve come to a proposal that’s fair, obviously not everybody is going to like it.”

The millions brought in by the proposed tax will go toward creating long-term , lifetime housing for people in need, the council members said.

The proposal, which the council members have called H.O.M.E.S (Housing Outreach, Mass-Entry Shelter) will also help expand the Law Enforcement Diversion Assisted Diversion (LEAD) program to additional Seattle police precincts. The program, which has received international accolades, helps non-violent drug offenders land someplace other than jail.

Harris-Talley said the tax proposal gives businesses the chance to do the right thing.

“There’s no reason they shouldn’t have an opportunity to give back to the folks,” she said.

Nearly a decade ago Seattle had a “head tax,” but it was repealed. That tax on employee hours had paid for transportation needs in the city.

Both the Seattle Metropolitan Chamber of Commerce and the Downtown Seattle Association said they oppose such a tax.

"We need to invest our resources wisely toward solutions that work, instead of pursuing a new tax on jobs,” Maud Daudon, president and CEO of the chamber said in a statement.

“The Council has a nearly $70 million increase in the general fund that it could use to address housing affordability,” the statement said.

Jon Scholes, president and CEO of the Downtown Seattle Association, said the proposal sends the wrong message to businesses.

“It’s interesting that the city’s response to Amazon looking for a second headquarters is to propose a new tax on jobs,” Scholes said.

Scholes said he wants to know exactly how the City of Seattle is spending the money they dedicate to the homeless crisis. Seattle has spent $61 million on homelessness so far this year and is projected to spend $63 million next year, a city official said.

“They’re collecting 40 percent more tax revenue than they did five years ago. So question we have is what are you doing with the money you have today around this crisis of homelessness in our city,” Scholes said.

O’Brien said he doubts the tax will be a huge burden on a lot of big companies.

“Is it a meaningful chunk of money, absolutely. Is it going to say we’re pulling up and moving to Bellevue? I don’t think so,” he said.

The entire City Council will be briefed on the proposal during budget deliberations on Monday morning.

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