Seattle’s top grossing employers escape a head tax for now. (GeekWire Photo / Nat Levy)

A proposal that would have taxed Seattle businesses earning more than $10 million in gross annual receipts was narrowly voted down by the City Council Tuesday.

The HOMES tax was defeated 5-4, though several councilmembers said they want to bring the tax back for a vote early next year after more discussions with stakeholders. The employee-hours tax, commonly referred to as a “head tax” would have collected about $125 per employee, per year from the city’s top-grossing businesses. The Council said approximately 1,100 companies would have been subject to the tax.

“My concern about passing the head tax today is that we have not talked with the 1,100 businesses people so quickly dismiss and say that they can pay for it,” said Councilmember Sally Bagshaw, who voted against the tax.

Councilmembers Mike O’Brien and Kirsten Harris-Talley drafted the HOMES tax, with support from Lisa Herbold. They say it would have generated between $20-$25 million to fight Seattle’s homelessness crisis. O’Brien envisioned the majority of the funds would go toward building affordable housing and some would be reserved for homeless services.

Several members of the Council targeted the booming tech industry as a driving factor in Seattle’s growing homeless population. Seattle’s business community is experiencing rapid job growth, drawing record numbers of newcomers for high-paying jobs. That influx puts a squeeze on Seattle’s housing market, often driving out lower-income, long-term residents.

“Often we talk about growth not lifting all boats, growth not helping everybody but the proposition we are faced with — and the reason we’re proposing this revenue source — is because in many cases, growth has not only not helped everybody but growth has actually hurt people,” Herbold said during Tuesday’s budget hearing.

O’Brien asked that the Council still invest a …read more

Source:: GeekWire

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