Seattle's showdown over head tax | KUOW News and Information

Seattle's showdown over head tax

Credit KUOW Photos/Megan Farmer

Seattle is in the midst of a struggle with affordable housing and a rising homelessness crisis. 

The City Council is considering a proposal to have large businesses help pick up the tab on these issues with an employee tax, more commonly known as the head tax.

The tax would force big employers to pay the city of Seattle for each employee and every hour worked. It's expected to raise $75 million.

Head tax opponents and supporters crowd Seattle City Hall on Tuesday, June 12, 2018.
KUOW Photo/Megan Farmer

Bill Radke talks to two businesses that opposed the head tax about what solutions they're hoping to see, now that the head tax has been repealed. What do Seattle businesses need to do now? What's their responsibility?

Kailyn Nicholson, center, joins in on a chant led by Emerson Johnson, left, on Tuesday, June 12, 2018, inside City Council Chambers at City Hall in Seattle.
KUOW Photo/Megan Farmer

It was called a head tax, but maybe it should have been called the Robin Hood tax.


Caitlin Lee raises a Tax Amazon sign in front of Seattle City Council members on Monday, May 14, 2018, during a head tax vote at City Hall in Seattle.
KUOW Photo/Megan Farmer

The city of Seattle appears to be doing an about-face on the new employee head tax on businesses. The City Council approved the tax unanimously a month ago to generate money for affordable housing and homeless services.

Caitlin Lee raises a Tax Amazon sign in front of Seattle City Council members on Monday, May 14, 2018, during a head tax vote at City Hall in Seattle.
KUOW Photo/Megan Farmer

It only took the Seattle City Council four weeks to double-back on their vote to tax big businesses in order to pay for affordable housing and homelessness services.


KUOW/Amy Radil

Backers of the campaign to repeal Seattle’s “head tax” won’t say how many signatures they’ve gathered, but they’re optimistic.


The sun sets on downtown Seattle on Friday, October 27, 2017, shown from Harbor Ave. Southwest.
KUOW Photo/Megan Farmer

Now that the construction boom that made the city of Seattle rich is starting to decline—and putting newfound pressure on homelessness spending—it’s time to ask where the money went.

After analyzing the city’s budgets over the last eight years, we found some answers.

Downtown Seattle accounts for more than half the city's construction investments, according to DSA.
KUOW Photo File/Megan Farmer

The bloom is off the boom.


Seattle’s new head tax for homelessness services was bitterly opposed by many business owners. Now some say they will ask voters to repeal it in a ballot referendum.


The entrance to a homeless shelter on Third Avenue in Seattle.
KUOW File Photo/John Ryan

Seattle Mayor Jenny Durkan didn't veto the head tax passed by the Seattle City Council earlier this week, but in a letter to council members last night, she criticized the council's spending plan for the new tax.

Valerie Nagle, who lives in her van: 'It would be huge, if there was enough housing, affordable housing.'
KUOW photo/David Hyde

With Seattle adding tens of millions of dollars to fight homelessness, people around the city want to know: Is that money being spent effectively?

Valerie Nagle is one of them. She lives in her van.


Caitlin Lee raises a Tax Amazon sign in front of Seattle City Council members on Monday, May 14, 2018, during a head tax vote at City Hall in Seattle.
KUOW Photo/Megan Farmer

Bill Radke talks about what the compromise head tax means for Seattle with KUOW reporter Carolyn Adolph. We also talk to Todd Biesold, owner and CFO of Merlino Foods, about how the head tax will affect his business.

Emily McArthur reacts on Monday, May 14, 2018, during the head tax vote at City Hall in Seattle.
KUOW Photo/Megan Farmer

The head tax is happening — but the weakened version passed by the Seattle City Council today won't address the scale of the housing crisis, some council members say.


Seattleites packed a City Hall meeting on Monday, where a vote on the contentious head tax was expected.
KUOW Photo/Megan Farmer

A compromise has been struck over the controversial proposed Head Tax by the Seattle City Council. Over the weekend Councilmember Lorena Gonzalez worked with Mayor Jenny Durkan to come up with a plan they could both support. The new plan would raise an estimated $50 million a year instead of the original $75 million.

Volunteers count the number of people experiencing homelessness during the annual King County Point-In-Time count on Friday, January 25, 2018, in Pioneer Square.
KUOW Photo/Megan Farmer

Is Seattle the sort of place where, if you can’t afford it, there’s no room for you?


Jenny Durkan at her election night party on Tuesday, Nov. 9, 2017
KUOW Photo/Megan Farmer

Kim Malcolm talks with news analyst Joni Balter about why the head tax proposed by the Seattle City Council puts Mayor Jenny Durkan in a politically tricky position. Balter is a contributor to Bloomberg Opinion and host of Civic Cocktail on the Seattle Channel.

Jenny Durkan
KUOW Photo/Megan Farmer

Seattle Mayor Jenny Durkan has proposed a compromise tax on large businesses that would pay to ease the city’s affordable housing shortage and homelessness crisis.

File photo of a homeless encampment under a bridge.
KUOW Photo

Seattle Mayor Jenny Durkan is not ready to support the proposed employee head tax. This is the proposal for a per-employee tax on the city's highest grossing businesses.

The money would pay for low-income housing and services for homeless people. Amazon would be the number one payer of this tax and they are so opposed to it that they've halted construction on a new tower in Downtown Seattle. Also opposed to this head tax are local companies like Starbucks, Alaska Airlines and Dick's Drive-In.

Sara Bates helps feed homeless people at Edible Hope Kitchen, a ministry of St. Luke's Episcopal Church in Ballard.
KUOW Photos / David Hyde

Seattle residents are fighting over homelessness and what to do about it.

When we asked Ballard resident Sara Bates why she believes the issue has divided the community so much, she responded with this story and a question of her own for her neighbors.


The sun sets on downtown Seattle on Friday, October 27, 2017, shown from Harbor Ave. Southwest.
KUOW Photo/Megan Farmer

More than a hundred heads of Seattle companies are saying no to Seattle’s head tax proposal. In an open letter to the Seattle City Council, they say it doesn’t make sense to punish businesses for creating jobs.

The letter’s signatories include the heads of Alaska Airlines, Tableau, and Expedia.

A group of people jog across Lenora Street, on Thursday, October 5, 2017, in front of Amazon's biodomes, in Seattle.
KUOW Photo/Megan Farmer

Would a tax credit that encourages businesses to donate to social services be more effective in solving the city's affordability and homelessness crisis than a new head tax?

Bill Radke talks to Saul Spady, president of Cre8ive Empowerment (and grandson of Dick's Drive-In co-founder Dick Spady) about why he and other area business owners are against the proposed Seattle employee head tax.

Amazon employees walk in front of a map highlighting 238 cities that submitted bids for Amazon's second headquarters in the lobby of the Day 1 building on Tuesday, October 24, 2017, in Seattle.
KUOW Photo/Megan Farmer

It started with a tax proposal related to the cost of fast growth. Now it’s become a showdown.

Amazon said it is halting plans for two downtown Seattle office buildings while it waits for the City Council to decide on a head tax.

Tents are shown as people gathered to protest the sweeps of homeless camps in November, 2017, at City Hall in Seattle.
KUOW Photo/Megan Farmer

Let May 2, 2018, be known as the day that Seattle Nice died.

Construction continues on a new apartment complex on Monday, March 12, 2018, at the intersection of Aurora Avenue North and 109th St., in Seattle.
KUOW Photo/Megan Farmer

Seattle has an affordability and housing problem, and the City Council is considering asking businesses to chip in. A proposal in the works would tax Seattle businesses with at least $20 million in taxable gross receipts 26 cents per employee for every hour they work.

The city estimates that an employee tax would raise about $75 million a year.

Should businesses pay more? We debate the pros and cons with Seattle City Councilmember Mike O'Brien and Seattle Chamber of Commerce president and CEO Marilyn Strickland.

From left, Amazon software development interns Min Vu, Cindy Wang, Jason Mar, Katie Shin and Louis Yang, walk after getting bananas from the Amazon Community Banana Stand outside of the Amazon Meeting Center on Thursday, October 5, 2017, in Seattle.
KUOW Photo/Megan Farmer

Seattle officials will once again try to pass an employee head tax on businesses. A similar idea failed in the city council last year, but council members — including Lisa Herbold, Lorena González and Mike O’Brien —  promised to bring it back.

A new proposal slated for review this spring would tax Seattle's highest-grossing companies based on their number of employees.

Tents are shown as people gathered to protest the sweeps of homeless camps in November, 2017, at City Hall in Seattle.
KUOW Photo/Megan Farmer

Seattle's City Council wants to bring back its "head tax" proposal — and soon. The idea is to tax the city's largest businesses based on their number of employees.

Councilmember Tim Burgess speaks after accepting a nomination from council member Lorena Gonzalez to become the intern mayor of Seattle, during a city council meeting on Monday, September 18, 2017, at City Hall in Seattle.
KUOW Photo/Megan Farmer

Seattle mayor Tim Burgess is speaking out against a proposed business tax that would raise extra funds to combat homelessness.

City council members are considering including the tax, known as an ‘employee hours tax’ or a ‘head tax’, in the 2018 budget.

But Burgess said this week that would be a mistake.

File photo of a homeless encampment under a bridge.
KUOW Photo

Bill Radke talks to Seattle City Councilmember Mike O'Brien about a proposed head tax that would require high earning businesses in Seattle to pay $100 per employee. The funds raised would go towards programs that help people experiencing homelessness.  

A homeless encampment in Seattle's Rainier Valley, taken March 2016.
KUOW Photo/Ruby de Luna

Seattle City Council members are considering a tax on big business to fund services for homelessness.

This kind of tax is often known as a “head tax” or “employee hours tax.” And it’s actually nothing new for Seattle. The city had something like it for transportation funding, until it was repealed in 2009.

On Wednesday at Denny Park, former Mayor Mike McGinn revealed a new tax plan in the Seattle mayor's race
KUOW Photo/David Hyde

Economic inequality is a top issue in this year's Seattle mayor’s race. On Wednesday, former Mayor Mike McGinn said he has a new tax plan to help fix that.