City council considering new payroll tax plan

VIDEO: Seattle looking for ways to jump start economy

SEATTLE — There’s a new proposal at Seattle City Hall for a progressive payroll tax targeting the city’s biggest businesses with the highest earners.

On Tuesday, City Council member Teresa Mosqueda unveiled a plan she calls “Jump Start Seattle” that would raise about $200 million annually for affordable housing services, and help for small businesses and equitable development initiatives.

“We can jump start our economy and do it in an equitable and inclusive way,” Mosqueda said.

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Businesses with Seattle payrolls of at least $7 million would pay a tax on annual salaries of at least $150,000.

The tax rate would go up when companies pay workers more than $500,000, or for companies with Seattle payrolls greater than $1 billion.

Mosqueda insists she’s not targeting Amazon.

“This is not about one company,” she said. “This is not about one targeted effort, this is about a universal approach to really invest in our local economy.”

Councilmembers Kshama Sawant and Tammy Morales explicitly target Amazon in their competing tax plan, which would raise $500 million.

Expedia is the first big business to publicly support Mosqueda's new plan.

“While we are concerned about any new city tax in this period of economic uncertainty, this is a necessary conversation until progress can be made on state and regional solutions,” said Richard de Sam Lazaro of Expedia.

A county payroll tax with wider business support died earlier this year when the state legislature didn’t give the green light to enabling legislation.

The Downtown Seattle Association blasted both current city payroll tax proposals, writing in a statement, “We continue to believe taxing jobs is bad public policy, and it’s especially ill-advised as we enter what is likely a deep recession and an unprecedented rise in unemployment.”

Seattle Mayor Jenny Durkan’s office said she has not yet reviewed the legislation but wrote she has “long supported the need to reform Washington state’s regressive tax system and was one of the leading advocates for a regional progressive payroll tax on businesses that was proposed in Olympia earlier this year.”

Mosqueda’s plan would first focus on COVID relief, dipping into emergency reserves and then replenishing them with the new payroll tax.

The spending on affordable housing and other needs would begin in 2022.

Mosqueda’s tax plan would sunset in 2030, or whenever a county or state tax is enacted to re