Seattle City Council budget chair Teresa Mosqueda thanked District 3 representative Kshama Sawant for the “dialogue” Monday as the body approved Mosqueda’s “JumpStart” plan for a new “progressive revenue” tax on the largest Seattle businesses.
“Seattle residents have made it clear – now is not the time for government austerity or divisiveness,” Mosqueda said in a statement following Monday’s full council approval. “Investing in communities of color, small businesses, and community health leads to a more robust and resilient economy. We are in the midst of a health and economic crisis that even a strong economy like Seattle may not be able to recover from quickly.”
“Thank you to the large coalition of community organizations who supported this plan – investing in Seattle is investing in our economy and our future,” Mosqueda said.
Beginning January 1st, Seattle companies with payrolls $7 million and up will be taxed on pay to employees making more than $150,000 per year. The tax rate ranges from 0.7% to 2.4% with tiers for various payroll and salary amounts. It is expected to generate more than $200 million a year for for a city facing a massive COVID-19 crisis-ripped hole in its budget forecasts and in desperate need of revenue for hoped expansion of housing, business assistance, and community spending. Late amendments approved include an expanded 20-year sunset clause that puts the tax in place for two decades. Grocery businesses and independent contractors are exempt.
Sawant and Socialist Alternative’s Tax Amazon campaign championed the Mosqueda proposal as it became clear the council would back the tiered approach to taxing large companies over a more aggressive, flat approach. The campaign has been organizing a possible ballot measure to push a business tax forward. Monday, the only two council members to side against the JumpStart plan, Alex Pedersen and Debora Juarez, voted against the plan saying they preferred that voters decide on the tax.
The summer 2020 rebirth of a Seattle tax on big businesses comes two years after the city council passed and then rolled back a $275 per full-time employee tax on companies reporting $20 million or greater in annual “taxable gross receipts.” That tax would have generated only about $50 million annually.
Opposition remains. Monday, the Seattle Metropolitan Chamber of Commerce, the city’s most vocal opponents to its “progressive revenue” taxing efforts, again criticized the plan coming “at a time when the depth and breadth of this crisis is still unfolding” —
Today’s new payroll tax pins Seattle’s economic future on local businesses remaining strong, at a time when the depth and breadth of this crisis is still unfolding. All of our leaders should be thinking day and night about how to get businesses back open and people back to work safely. Instead, the Council turned immediately to new revenue and passed one of the largest tax increases in Seattle’s history. With that comes even more responsibility to demonstrate how they are using the city’s resources to deliver on critical services and get Seattle on track for an equitable and inclusive recovery.
Mayor Jenny Durkan is also likely sidelined in any further opposition after Monday’s 7-2 veto-proof vote.
The Tax Amazon effort, meanwhile, is in full support. Following Monday’s vote, Sawant trumpeted the approval with the full force of her political power with press releases from both Tax Amazon and her city council office.
““Today’s vote to pass an Amazon Tax in Seattle is a historic victory for working people. This victory was hard fought and it was hard won,” Sawant said in the city press release. “The ONLY reason this passed is because of the strength of our movement. A movement that wouldn’t give up, and that faced down a seemingly endless series of obstacles: from the shameful attempts of corporate Democrats in the State Legislature to pass a ban on municipal big business taxes, to unfounded delays in the City Council, to a pandemic and lockdown which prevented signature gathering, to relentless attacks in the corporate media in Seattle and nationally.”
“We are winning because of the determination of workers and socialists to smash all obstacles and find a path to victory,” she said.
In the Tax Amazon statement, the campaign said “the fight is not over.”
“From day one, we’ve put forward a dual strategy of fighting for our movement’s legislation in the City Council, but having the option of moving forward on a ballot initiative if City Council failed to pass a strong Amazon Tax,” Eva Metz, Tax Amazon campaign manager said. “On Wednesday, July 8, our movement will hold our fourth Action Conference online, to democratically decide next steps for our movement. This will include discussing whether to submit signatures for the November ballot, preparing to defend against a potential repeal referendum from big business, and how to best build off this historic victory, including spreading the Tax Amazon movement nationwide.”
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