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Seattle City Council Votes Overwhelmingly to Repeal New Business Head Tax

3 min readBy: Jared Walczak

Mountain View and Cupertino, the California homes of Alphabet (Google) and Apple respectively, are considering business head taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es along the lines of what was adopted in Seattle. Meanwhile, Seattle has reconsidered, in dramatic fashion.

Citing widespread opposition to the new tax and the need for greater consensus, seven of the nine members of City Council voted today to repeal the new tax before it goes into effect. It took a while, but Seattle officials have figured out that taxing job creation is uniquely counterproductive.

The city expected opposition for large corporations but seemed unprepared for the policy’s rejection by the general public. Today’s repeal took place under the shadow of a looming ballot referendum and polling showing the new tax’s considerable unpopularity. Organizers were preparing to submit a petition for a ballot initiative with more than twice the required number of signatures when news broke that City Council was ready to reverse itself. (Once the petition was certified, the new law would have been suspended pending the outcome of the ballot question.)

Seattle residents understood that penalizing employment was bad for their community, and their elected officials seem to have gotten the message.

Bruce Harrell, the City Council President, explained his evolution on the issue at a news conference yesterday:

I think what has changed is that we continue to listen to everybody. Over the weekend, as an example, I attended several events, civic events, and across the board, advocates, liberals, conservatives, moderates, they’ve all questioned a few things. Question number one, whether is this the right strategy, to impose a jobs tax, if you will, for the future of our city. Number two, whether we have convinced the public that we are even spending their money wisely and strategically to address the issue of homelessness. And before you impose a tax, I think, particularly when it’s as significant as the employee hours tax, I think you have to convince the public that you are using the money wisely. And I don’t think that persuasion has been there. And people are quick to say, “Well, was it a mistake?” It would be a mistake for us to do nothing right now, in terms of listening to the public, fighting the issue, and continuing to not really address the issues on the street is what we’re about to do. So I think this is a wise move, to press the reset button, and examine how we address the issue of homelessness and affordability…

What I can address is that many people continue to support the employee hours’ tax—that is true, and for good reasons. But the vast majority of people that I talk to, whether it’s at public forums or even through my email and through telephone calls, seem to be opposed to the employee hours tax and that strategy. And I think we have to listen to those folks.

One has to think that elected officials in Mountain View, Cupertino, and elsewhere are watching.