Business owners: Head tax yet another burden

animal swallowing dollar bills
It’s time Seattle took a hard look at its programs to shelter the homeless before creating new taxes on every business in the city. Photo: showmeinstitute.org

With small businesses struggling and closing all over Seattle, many business owners feel the City Council is working against them. The latest of these challenges is the Employee Hours Tax or “head tax,” proposed by the Progressive Revenue Taskforce to solve Seattle’s housing and homeless crisis.

The proposal suggests that because the housing and homeless crisis is a concern to the entire community, every business, no matter the size, should have “skin in the game.” This would leave businesses as small as one employee paying $395 per year, an amount the Taskforce deems “relatively small.” Larger business would pay proportionately more. Such as tax really wouldn’t be a small impact when considering the seemingly constant rise of property taxes, rent, and other costs of doing business.

The City of Seattle has made it increasingly difficult to run a small business.

In their report to the city, the Progressive Revenue Taskforce stated that there is an urgent need for fiscal discipline. The City Council members themselves, however, have a lack of accountability. One question the business community would like answered is, “How will the money raised be used?”

The City Council should be able to demonstrate results before asking for new sources of revenue. Last fall, $25 million was proposed with no plan. Now, the amount has risen to $75 million. In the past three years, despite increased city spending, the number of unsheltered people in Seattle grew by 37 percent. Clearly, it’s time the city took a hard look at its programs to shelter the homeless before creating new taxes on every business in the city. Its economic boom leaves Seattle flush with income, but the evidence is that the city is not effectively spending from its cash flow when it comes to homelessness.

Every business owner knows you must be able to stick to a budget, determine which tactics are working and which aren’t and be able to move forward from there. We would like to see a strategic plan from the City Council that suggests permanent solutions for housing, mental health management, substance abuse treatment and employment opportunities for those in need. How can the City Council determine total funding needed to alleviate the homeless crisis before it’s put together a strategic plan?

If the City Council is not effectively doing its job, businesses should not be paying to help.

Over the last three years, Seattle employers have supported an increased minimum wage, mandated paid sick-and-safe time, secure scheduling, and the most progressive Paid Family and Medical Leave program in the country. We saw significant increases in Business & Occupation taxes and business license fees. It would be one-sided to discuss a “progressive” new revenue source on businesses without also addressing the regressive nature of our current costs.

Although the Employee Hours Tax would affect all businesses, few have been invited into the conversation. The best work is often done when you collaborate with your partners.

The City Council presents issues such as raising the minimum wage and the Employee Hours Tax as cut-and-dried matters. While many of us would love to pay our employees even more than minimum wage, the reality is that we cannot afford to. When new taxes and policies arise, we don’t magically find more money. The unfortunate consequences of these new costs are that we are unable to pay as many employees.

Small businesses employ 60 percent of Seattle’s workforce. Through taxation, businesses will also provide nearly 60 percent of Seattle’s total general fund budget. Local businesses are a large contributor to Seattle’s economic growth while creating community among our neighbors and contributing to the unique fabric of our culture. We love this city and we want to see it thrive and diversify; however, if taxes continue to rise, our city will continue to lose locally- owned businesses.

The business community cares deeply about solving the homeless crisis on an immediate and personal level. We are compassionate to those in need, and we are concerned with implementing solutions that work. We experience the effects at our homes and at our businesses, and we are eager to play a role in finding solutions, but the Employee Hours Tax is not the way.

Lauren Adler is the owner of Chocopolis, and Kayla Boehme is the owner of Pipe + Row.

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