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Seattle City Council: Amazon tax alternative, biased loitering laws, and a capital gains tax proposal

Catching up on a few things at City Hall not directly related to the Capitol Hill protest zone, here are a few recent updates from the Seattle City Council:

  • Loitering laws: The council Monday voted to repeal two loitering laws advocates say have been used by police to target Black and Indigenous people and other people of color and vulnerable populations like sex workers. “I’ve committed to preventing disproportionate impacts on communities of color by police interactions and this is just one fix to our city laws,” said council member Alex Pedersen, one of three on the council bringing the bills forward for Monday’s unanimous votes. Seattle Police leeway to arrest people Seattle Reentry Workgroup formed “
  • Amazon tax alternative: The Seattle City Council is putting its weight behind Teresa Mosqueda’s plan for a tax on big businesses to raise $200 million a year to help Seattle overcome its forecasted budget shortfalls due to COVID-19 and to fund affordable housing, equitable development, and economic support for small businesses. The proposal pushes aside the Sawant-Morales plan for a larger $500 million a year tax. Seattle City Council Insight reports the body is backing the Mosqueda plan and pushing changes including a change making a sunset clause in the proposal conditional on “the county or state passing a progressive revenue package of its own” and boosting how much revenue the tax will generate. The bills to enable the plan will be taken up for the first time Wednesday morning in the council’s budget committee.
  • A Seattle capital gains tax: Council member Andrew Lewis is preparing a legislative proposal that could create a “1% capital gains tax on stocks and bonds when sold for profit.” City Hall estimates the tax would raise roughly $37 million a year to “create resources to build affordable and permanent supportive housing, and fund additional homeless services.” “We know the solution to meet the scale of our homelessness and affordable housing crisis – it’s providing more housing. Specifically, we need to invest in permanent supportive housing with wraparound services, so our homeless neighbors can stabilize, create community, and ultimately heal,” Lewis said in his announcement of the proposal. Lewis says most Seattleites wouldn’t have to pay the tax:

    The capital gains tax will not apply to retirement accounts, home or commercial real estate sales, or investments that lose money. It is estimated 70 percent of Seattlites (sic) wouldn’t pay the tax. According to Brookings, Sixty-nine percent of all capital gains go to the top 1 percent of richest Americans .

    But he’ll be one of them who does. “I will pay this tax,” Lewis says “And I will be happy to do it. If I’m fortunate enough to make $500 on the stock market this year, the least I can do is give $5 to the City to house and support people. I wish it could be more.”

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7 thoughts on “Seattle City Council: Amazon tax alternative, biased loitering laws, and a capital gains tax proposal

  1. Seattle stopped using SODA laws some time ago. And they only impacted known criminals repeatedly impacting communities, many being communities of color. I wish city council would ask these actual communities what THEY want. We keep getting things shoved down our throats from a small number of zealots.

  2. Look if you’re going to reference SCC Insight at least report it correctly. This plan does NOTHING to offset the looming budget deficit the city is facing. It is all NEW spending. From SCC Insight’s article on the plan.

    “There are two issues with this plan. First, the “rainy day fund,” as established in the Seattle Municipal Code, is to be used as a backstop for revenue shortfalls, not for new spending. In an email this afternoon, Mosqueda acknowledged the issue. She and her colleagues could circumvent it, however, simply by changing the law; the state law that authorizes cities to establish such a rainy day fund does not place those kinds of restrictions on its use, so there is no inherent limit on the Council’s ability to pass legislation to use it as Mosqueda intended. The second issue, however, is that with the city facing a revenue deficit of $210-300 million this year alone, the rainy day fund is likely to be needed for its original purpose: continuity of existing spending. Mayor Durkan has not yet transmitted her proposed re-balanced budget to the Council yet, but it almost certainly will use some or all of those funds — leaving them unavailable for Mosqueda’s spending plan.”

    So not only does this plan not help the city with the current budget shortfall it actually makes it worse by using up the rainy day fund for NEW programs. If this passes as is the city will either have to make draconian cuts to the budget (and no just defunding the police will not cover it) or raise other regressive taxes like I don’t know the sales and property tax. Oh by the way, Lewis’ tax is all NEW spending too so it also does not help.

    • This shouldn’t be too surprising since we don’t *know* what the impacts to the current budget are yet. Once we have the Mayor’s budget, coming this week, they can start to look at using new revenue to supplant current holes.

      • Perhaps but JumpStart Seattle has a pretty robust spending plan attached to it that doesn’t mention anything about backfilling existing budget shortfalls. The mayor’s budget only covers 2020 so unless you are optimistic revenue’s return to pre Covid levels in 2021 the city will still have some rebalancing to do. As it stands today this doesn’t nothing to offset that so I don’t think we should assume it should.

  3. Lewis cap gains tax is ridiculous. It’s easy to control when you realize and it’ll easily cost more to implement/enforce then it’ll raise. And his comment about having to pay it – from a man who somehow only has a 15k net worth at his age good luck saving anything to invest.

    Why do we keep electing morons to our city council?

    • *If* the 1% cap gains tax is passed, you will see a lot of wealthy people move their permanent address to their cabin up in the San Juan Islands or elsewhere. Good luck trying to enforce this, the cost would be too high.

      • The legislature is going to pass a capital gains tax in at least two sessions, it’s not even a question, so this will end up just being an extra 1%.

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