New Jobs Tax in Seattle


Seattle city will remember the year 2017 for a very long time. The city considered uncountable ways of imposing taxes on its residents. The list of taxes considered included levies on the luxury real estate, city income tax, soda taxes, levies on short-term rentals, and soda taxes. There were taxes on business heads and a more expensive parking tax. Seattle tried its best but did not succeed. Even the city's proposal for 4.8 percent for every employee tax got nixed. The city is now back with a brand new version of the earlier proposal- a 26.042 cent for every employee per hour tax.

Employee head tax

These numbers boil down to $540 in taxes per full-time personnel per year. It is in all sense, a tax imposed on the employment. This tax is far from the norm. In case such a proposal gets adopted, Seattle will be among the extremely few which impose employee head tax. The tax rates are much higher compared to others.

Chicago, for many years, had a tax for every employee. This was four dollars per month, amounting to $48 every year. This tax destroyed job creation in the city. The Chicago Mayor, Rahm Emanuel from the Democratic Party, ran for office on a promise to end this unpopular tax. Emanuel said the head tax increased unemployment. He pledged to eliminate this head tax. The move will be suitable for big businesses and small businesses.

Comparing with other cities

A few Pennsylvania cities impose employment-centric “local services taxes” at rates varying from $10 to about $53 every year. Denver has imposed a four-dollar every month head tax. These taxes are not common and frequently criticized. When it comes to Seattle, what is striking is its high rate. About $540 for every employee every year for all eligible businesses. Seattle is considering imposing such a tax much higher compared to what other cities have imposed.

Seattle repealed a tax proposal of this sort in 2009. Even them, the present proposed rate is almost 22 times the previous rate. Mayor Greg Nickels, who repealed the tax, said in his defense that this tax must be repealed so that jobs can be created and for the growth of businesses. Nickels is a Democrat. His party man, Councilman Tim Burgess, agreed, saying the complexity of the tax and its prohibitive compliance costs make it unviable.

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