Ballmer warns against Seattle income tax

At Seattle City Hall, they are making plans for a city income tax on high-income earners.

But on Wednesday, former Microsoft CEO Steve Ballmer warned that an income tax would hurt Seattle.

During an interview with KIRO Radio's Dave Ross, Ballmer was asked if an income tax would hurt.

"It would hurt something,” Ballmer responded. “Jobs would tend, there would be fewer jobs here with an income tax than without an income tax,” Ballmer said.

Ballmer believes tech companies would have to pay higher wages to maintain their competitive advantage over California, which has a 14 percent income tax.

“It would drive up wages here and drive people to have to think about moving jobs elsewhere,” he said.

Neither Ballmer, nor his billionaire contemporaries at Microsoft, Bill Gates and Paul Allen, live in Seattle so they won’t have to pay the tax.

When asked if high income earners would leave if a tax were instituted, John Burbank of the Economic Opportunity Institute responded, “Where are they going to go? California, where they have an income tax of 14 percent? Oregon, where they have an income tax of I think it's close to 10 percent?”

The proposal is for a tax of 1.5 percent on high earners who live in Seattle. The tax would apply only to income over $250,000 per household.

For example, if a household has an income of $300,000, $50,000 of that would be taxed. And the city would collect $750.

Seattle visitor Ethan Kushner says both New York and New York City have income taxes and that a Seattle income tax would not affect a decision to move here, “It wouldn't keep me from taking a job here,” she said.

It probably wouldn’t be an issue from Zoe Burgess, either. “I don't think so. I'm originally from California so it's something I'm very used to, wouldn't shy away from,” she said.

Asked if there is a safeguard to keep the tax from expanding to people who aren’t wealthy, Burbank responded with a chuckle, “Yes, the safeguard is called democracy.”

Both voters and courts have rejected statewide income taxes. Seattle advocates believe they can craft a tax that will survive a court challenge.

The city council is scheduled to receive a draft ordinance Wednesday and vote on the plan in July.