50+ West Seattle businesses sign letter to City Council expressing concern about new ‘head tax’ proposal

On the same day City Councilmembers were scheduled to have their first official discussion about the newest move toward a “head tax” (backstory here), more than 300 businesses around the city – including 50+ from West Seattle (our count of the names we recognized) – have signed a letter expressing concern. Here’s the letter and those who signed it (note that while it is dated March 9th, to our knowledge it is just being circulated today, March 14th):

The letter is similar to one circulated to West Seattle Chamber of Commerce members yesterday, in the name of the city’s Small Business Advisory Council, with an invitation for signatures. The new proposal is from a task force co-chaired by West Seattle’s City Councilmember Lisa Herbold and WS-residing at-large Councilmember Lorena González. It is not yet in the form of proposed legislation – that is expected later in the year. We weren’t able to monitor today’s council committee discussion but hope to link it here when the archived video appears on the Seattle Channel website.

anonymous business owner March 14, 2018 (6:59 pm)

$14 minimum wage is not enough? another disincentive to hiring / growing a small business in Seattle…

RickE March 14, 2018 (8:21 pm)

Maybe it’s time to get organized and put some real people up for election to the city council and mayor. Our current council does not serve the populous, rather special interests.
- West Seattle since 1979 March 15, 2018 (7:40 am)
  
  The populace includes people who need a living wage. I agree with you about the head tax, at least for small or middle-sized businesses, it’s not a good idea.
- AJP March 15, 2018 (10:47 am)
  
  Special interests = large corporations who get out of paying taxes that small businesses have to. Give small businesses tax relief, not large corporations.
  - West Seattle since 1979 March 15, 2018 (12:55 pm)
    
    AJP: yes, exactly!

TJ March 14, 2018 (7:40 pm)

Our politicians thirst for more and more taxes is obnoxious. Record tax increases in the last 3 years. All of this while brining in record revenue from the economy alone. They will never stop. Seattle liberal = progressive = crusader = constant new programs demanding money. Anger is finally boiling over. Lying, cheating, and hiding assets to avoid taxes is happening. I am one

DaveG March 15, 2018 (5:08 am)

Perhaps you should leave Seattle. Move to eastern WA where you register your vechicles to avoid paying hire car tabs. Staying here and “lying, cheating and hinding” asserts to avoid taxes to live beyond your means makes you nothing more than a welfare queen.

Flimflam March 14, 2018 (8:33 pm)

This head tax is yet another gift to those that make a career off of the homeless ” crisis” – until full disclosure, audits of where current funds are going there is no justifying any more taxes for this cause. there has to be some sort of proven success and accountability to explain where billions of tax dollars has gone

TBone March 14, 2018 (8:49 pm)

I once lived in West Seattle and owned and ran a small business there. I have since moved myself and my business to Tacoma.

Running a small business is a very precarious endeavor. Income and cash flow is never guaranteed, but the bills, expenses and taxes are. When you have an ever increasing drain on your resources from city leaders, it makes every passing year less viable, less enjoyable, less predictable.

Of course, there is no easy answer to solving social ills, or coming up with funding for the very necessary problem of homelessness, affordable housing, etc. I don’t propose to have any worth debating here, but at some point, self survival kicks in and small business owners leave and go to places where they can function.

I hate to point out the obvious, but Seattle has made itself a haven for homeless people. Drive across the bridge and see how many camps you see along the freeways or underpasses and green spaces in Bellevue, or Mercer Island, or Kirkland. You simply don’t.

Skin In The Game March 14, 2018 (8:52 pm)

Herbold and Gonzales have obviously lost their way by sponsoring this DOA proposal. They are so out of touch, it’s like they don’t even LIVE in West Seattle, right? #TheyKnewAboutMurray

gxnx March 14, 2018 (9:35 pm)

The city should tax themselves first just like it is mentioned

https://www.change.org/p/seattle-city-council-implement-income-tax-on-city-of-seattle-employees

Gatewood March 15, 2018 (12:15 am)

15 of the 16 member of the “progressive revenue task force” stand to benefit from the proposed funding!!! Let’s go ahead and put the kids in charge of the candy store. Lisa and Lorena are driving this after Lisa’s failed head tax last year. Why in the world are these people our reps? They are attaching every business that makes West Seattle, West Seattle!!!! It is time for new leadership. We all agree in a better way of life for Seattle residents on all levels but hammering local WS businesses as “big business” and the only solution is insane. I just watched the owner of WS’s Peel and Press speak up about this on KOMO and can’t believe the amount of increases that they have dealt with in the last 3 years! I may agree that some were needed but but damn, that is a lot when you hear it listed. I cherish local business and the council needs to stop attaching them!!! We (WS) can’t control the whole makeup of the coucil but we do control District 1 in the next two years and effect the two at large seats in four years. WS can help change the tide of this council clown show! Let’s find a progressive, compassionate candidate who wants to help folks and realizes that small businesses and restaurants are not the enemy but the solution. It can’t be that hard. I urge you all to look at the businesses you trust as leaders in the community and see who they are voting for next election (I bet you it’s not Lisa) and follow their lead. Every WS small business owner I know has the community in their hearts and are not right wing nut jobs. They have charity, community building and the best interest of their employees in their hearts. Our council has their next election or position as their goal. It is time to move on and truely address the issues and stop increasing the hurdles to keeping locals employed. Also…..

#theyknewaboutmurray

can we make that a thing???

Huck March 15, 2018 (6:56 am)

Most cities fight hard to attract businesses. This city council does everything in their power to chase them away. Clueless bafoons…

Hpdude March 15, 2018 (7:26 am)

Herbold is definitely not getting my vote for supporting this. A tax on the working class to dump more money into the homeless problem we are already paying property tax for homeless along with all the charity I think we are spending enough on this problem

BAS March 15, 2018 (8:32 am)

Hey Neighbors,

I’m in favor of this tax because we obviously need a dedicated revenue stream from our wealthiest neighbors to pay for solutions to homelessness. The wealthy barely pay any taxes in this city. How do I know? I barely pay anything. I am all for paying my fair share. It’s the right thing to do.

You oppose progressive revenue taxation and want to organize? The Republican Party is the best, most well connected anti tax organization in America. Most of the comments on here are directly aligned with the Republican Party platform. I’m sure they will welcome you and your greediness with open arms.

Just realize you ARE the minority. I support CM Herbold and Gonzalez, and so do many of my neighbors. I did recognize a couple of businesses on the list that should not be impacted by this legislation, but if they are then the legislation needs to be changed to reflect truly fair taxation. Maybe they just put their names on the list as an act of solidarity.

Pay your fair share, neighbors.

The Truth March 15, 2018 (9:06 am)

If you think the names on that list are republicans you are nuts. I know most all of those folks and they are independent to liberal across the board. It is always easy to spend other peoples money and claim moral superiority. There is a VERY big difference between anti-tax and anti-runaway taxing. Good for you for paying very little. Everyone’s circumstances are different. When the Cities own consultant said we have enough money but don’t prioritize it right what do we do? Fix the allocation of money? Hell no! We double down and miss spend more money!!! Also, for the council to say that out exonomic boom is the cause of this and somehow small businesses are to blame is insulting to small businesses. You want to tax Amazon and other texh companies, I get it, cool go for it. But to squeeze small business that are also suffering from higher opporating expenses and facing the same affordability issues in terms of space and property taxes is unacceptable. You can only go back to the well so many times!
Sarchka March 15, 2018 (10:03 am)

Bas:

What makes you think that small business owners are automatically “the wealthy?”

What makes you so certain in your smug “progressive” cubby that you are the majority?

What makes you the judge of what is the “fair share” and who should pay it? who is being “greedy”?

Seattleites like you need to stop getting suckered for every tax that comes along in the name of being “progressive”. Just because you are opposed to a stupid, regressive, anti-business and anti-middle class tax [like this one] doesn’t mean you are a republican. You are part of the problem, pointing fingers and judging who’s not “progressive” enough.

The true solution to garnering more tax revenue from the wealthy is an income tax. Period. This is just a half assed way of trying to get at the same pot of money, only it will hurt business / employment / tax base / economic vitality on the way back around.

City council should be enrolled in mandatory Economics 101 classes.
- BAS March 16, 2018 (12:19 am)
  
  I didn’t know sharing my perspective would be so triggering to so many. But, please, allow me to further share. I come from the third poorest county in the country. As someone who grew up in extreme poverty, I understand what struggle and burden.
  
  First, small businesses are EXEMPT from this tax. Why hasn’t WSB clarified the applicability of this tax? That’s an extremely important piece of information. You are NOT a small business if you generate more than $10,000,000 in revenue. Some may say they make meager profits, but that’s an argument without limit. A company with $1,000,000,000 (one billion) in revenue may still have meager/slim profits or none at all if they’re heavy on liabilities.
  
  Why did businesses who are EXEMPT from the tax sign this letter? It seems as though the small business community is being manipulated. Maybe the conversation should also be what constitutes a ‘small business’. I believe businesses that generate more than $10 million a year are far beyond “small” and need to pay their fair share. That’s my one voice, my one vote.
  
  My Republican friends in DC make the same arguments about taxation. I’m personally moderate, but I know conservative ideology when I see it. Defending big business is straight from the Republican playbook. By the way, corporate franchises are still big business. I’m just saying a lot of this thread seems to be pushing Republican tax ideology. That’s fine. I respect that. I respect your right to not want to be taxed. Please respect my advocacy for the taxation of millionaires and billionaires.
  - WSB March 16, 2018 (12:53 am)
    
    There is no one “exempt” from this tax yet – because there is NO LEGISLATION PROPOSED yet. What we have is a report from the committee that proposes the general idea.
    
    http://www.seattle.gov/Documents/Departments/Council/Issues/ProgressiveRevenueTaskforce/Report-of-the-Progressive-Revenue-Taskforce-03-09-2018.pdf
    
    In that report, you will find a concept in which the task force would like to see some kind of tax for all sizes of businesses:
    
    d. Everyone Should Contribute:
    The housing and homelessness crisis is a matter of concern to the whole community, and businesses of all sizes should contribute towards the solution. We are somewhat concerned about creating an arbitrary “cliff” at a revenue threshold such as $5 million, below which nothing is paid and above which the tax suddenly kicks in. We generally agree that there be some kind of “skin in the game fee” as described above, so that businesses below the threshold are also contributing something, as long as this can be done in a way that is not unduly burdensome for small businesses.
    
    On the next page:
    
    5. “Skin in the game” alternative tax rate:
    • Employers under the gross revenue threshold should still be required to pay some relatively small amount: we suggest $395 per year.
    • Very small businesses, e.g. with revenue under $500,000, could be exempt from even this fee.
    • Businesses eligible for the title 6 exemption above should still be required to pay the alternative (suggested. $395 per year) tax rate.
    
    They say very small businesses COULD be exempt. Not that they necessarily will be. Again, there is no legislation proposed yet, so there is no one necessarily exempt, yet. (And of course, ultimately there could be no legislation, no tax, but here we are laboring under the assumption that there will be a formal proposal.) How the tax would be calculated hasn’t been decided, nor even a potentially exempt threshold (separate from “skin in the game” fee) – “other” below could mean anything. Less, or more.
    
    3. Examples of gross revenue thresholds below which businesses could be exempted from the tax:
    • $5M
    • $8M
    • $10M
    • Other
    - Huck March 16, 2018 (8:08 am)
      
      Great response WSB!!
    - WS Hospitality Coalition March 16, 2018 (8:50 am)
      
      Thank you so much for providing the breakdown and analysis. The reason so many of us signed on to the letter now was because if we don’t speak up the council does what it wants. There could or could not be an exemption for a small businesses, so until a proposal (not a recommendation) is put fourth in the council we will be here educating the public on what has been recommended and how it could impact the local businesses that make WS a great community! As you we can tell, people are confusing this recommendation with past proposals. There is NO employee count exemption. There is NO firm exclusions of small business. The IS a “skin in the game” recommendation for ALL business to contribute. Maybe I read this with a different mind set but if it says ALL BUSINESS should pay then Amazon making billions all the way down to your neighbor who make some random crafts on ETSY but has a Seattle businesses license pays. That person could make 2k per year as a side gig but if properly licensed be in the mix too pay a $395 fee. This is why we stay on top of these things. This is why we signed on! The city council gave two days notice of a meeting to discuss this at 3pm on Wednesday. A shockingly short timeframe to rearrage our work schedules to go listen and provide comment. Homeless advocates and organizers had a heads up before it was officially announced and they packed the chamber in support. We have seen this tactic before, so we signed the letter.
  - Pedro March 16, 2018 (8:55 am)
    
    BAS – as provided in the relevant documentation, and as pointed out by WSB, you are mistaken as to the threshold for application of the proposed tax.
    
    In addition, it really wasn’t your opinion on the tax issue that some took umbrage to, it was the bombastic, self-righteous way in which you framed your opinion; to wit:
    
    “You oppose progressive revenue taxation and want to organize? The Republican Party is the best, most well connected anti tax organization in America. Most of the comments on here are directly aligned with the Republican Party platform. I’m sure they will welcome you and your greediness with open arms. ”
    
    This binary, false proposition is offensive on so many levels, not to mention anti-intellectual and prone to fostering of a “lock step” mentality.
    
    There are many reasons to oppose the proposed tax, many of which have nothing whatsoever to do with being greedy or a Republican (I am neither). When you frame issues in this manner, it is nothing short of a bald faced attempt at bullying others into adopting your view, rather than striving to have each proposal judged and considered on its specific merit. This “your either with us or against us” paradigm on the issue of taxation discourages critical though with respect to the actual nature of a given proposal, and instead supports the view that any tax on a business must be good. Piling on with the whole “triggered” notion in your follow up just furthers the problems with your original post (and really, you didn’t know calling anyone who opposes the plan a greedy Republican would prompt a response; please – at least be honest).
    
    In closing, I hope that we can all embrace the “marketplace of ideas” concept, and be respectful to the viewpoints of others and actually open to having our minds changed. While many of our leaders on both sides of the aisle (Trump, Sawant) are abject failures in this department, I expect more from our citizens – We the People.
Peel & Press March 15, 2018 (10:36 am)

BAS-

I am here an a Business owner who is definitely not a Republican. Two big issues:

1) I am not wealthy. Yup, that is a problem because somehow everyone thinks because I own a restaurant I am. We get by with an unimpressive amount of profit at the end of the year. I’m not broke but if I divided my hours worked by my pay I would guess I am breaking the law by not paying myself minimum wage :-) I drive a 18 year old car and have a wife and 2 kids. Life isn’t cheep. Last year two of my amazing employees made more than I did and that is actually very commin in restaurants for lead servers and lead bartends to make more than the owner. Did you know restaurants make between 3-6%? So a million dollar restaurant pockets 30-60k before the owner pays their personal taxes! Thankfully I love what I do so I have so far continued to make it. So it sounds impressive on the sales side but we don’t make a ton. Don’t worry, hasnt stopped me from being an avid supporter of the Arts West, most all local school, neighbors in need, the WS Food Bank, hosting fundraisers, donating a ton (by weight an actual ton) of turkeys during the holidays so people could have a special meal with their families and personally bartending and donating the supplies for the WSFB two main fundraisers every year. So I like to think I am contributing my fair share!

2) this tax is super regressive. It is basicly a sales tax. If you think businesses won’t raise prices to cover this and will just take a hit out of the goodness of their hearts you don’t understand the game. Most have nothing left to give so up goes the prices. So who pays? Lower to middle income families. Same as the sales tax. Just without the bad press for the council. How can I back this claim up? The same reason was cited by the majority of the council with the “sugar tax”. Yup, they all knew it was going to be passed along and disproportionately effect people of color and lower wage. Exact same thing will happen here. So please don’t call this tax progressive, it is the exact opposite! You just have to take the time to think it through.
- Sarchka March 15, 2018 (11:29 am)
  
  Well said, thank you Peel + Press, I love your restaurant and want to make sure our city is a friendly place for businesses like yours <3
- Rusty March 15, 2018 (12:58 pm)
  
  The ‘sugar tax’ was/is only aimed at the poor – if it wasn’t, they would be taxing coffee drinks (a mocha at starbucks has as much if not more sugar than a 16oz can of coke: https://www.cbsnews.com/news/do-you-know-how-much-sugar-is-in-your-starbucks-drink/)
  
  The hypocrisy is astounding and blatant.
  
  “All animals are equal, but some are more equal than others”.
Cynical girl March 15, 2018 (11:19 am)

ok BAS, instead of just words, take action and go ahead and send a check to the IRS. There’s nothing stopping you. Are you deciding what a “fair share” is? You know you’re not going to do it.

MJ March 15, 2018 (10:18 am)

The City council has no clue what it takes to operate a small business. Enough with more taxes and regulation already. It is time for the City to live within existing resources, these resources are up significantly in the past few years.

WSB March 15, 2018 (10:40 am)

Side note. We just came from an unrelated West Seattle event involving the mayor. She of course was asked about this afterward, and said that she wants to see what the council comes up with before commenting.

Lagartija Nick March 15, 2018 (11:54 am)

I find it amusing but not at all surprising that you’re all complaining about a proposal that nobody has even seen yet.

Correct me if I’m wrong but I seem to remember the last time this came up it was aimed at companies with more than 500 employees. That is definitely not small, local businesses.

While I certainly empathize with the low profit margin of small restaurants like Peel & Press, unless they have 480 or more employees stashed somewhere this probably won’t affect them.

The Truth March 15, 2018 (2:57 pm)

Just read the proposal from the task force. Absolutely no exemption based on employee count. 500k in sales or below “may” be concidered for an exemption in one of the options. 500k for a restaurant is 15-20k profit. Seems like a tax of $395 would be a 2% cut in pay that I don’t see other folks talking. Why should a small business?

MJ March 15, 2018 (12:44 pm)

Lagargida Nick

I believe it is pent up frustration that every time we turn around the City Council is discussing a new tax or regulation.

I for one would like the Council to live within the current budget and review it to remove programs that are not effective, instead of simply looking to tax more.

What is going to happen when the next recession hits?

Hayduke March 15, 2018 (2:18 pm)

Yeah, BAS, about that business of “pay your fair share,” here’s what some of that share will go towards:

“Support people living in their vehicles: Modify scofflaw rules; make safety lots for off-street parking with access to bathrooms and trash pickup; provide waste removal for RVs; payment of tickets beyond what vehicle residents can pay; provide repair for vehicles that cannot move; provide fuel; assist with insurance and drivers license issues; issue RV tags allowing them to park in designated areas without fear of being ticketed.”

Now do you understand why it’s called “Freeattle?”

Pedro March 15, 2018 (2:23 pm)

“[W]e obviously need a dedicated revenue stream from our wealthiest neighbors to pay for solutions to homelessness.”

In case you haven’t noticed, we already have a more than adequate revenue stream to pay for “solutions” to homelessness – to the tune of hundreds of millions of dollars.

Moreover, the study that was commissioned and paid for by the city already determined we are adequately funded (i.e., we have the money, we just spend it the wrong way).

And what do we have to show for all our spending? Exactly nothing – other than a worse problem than when we started.

The solution to the problem isn’t taxing the hard working amongst us even more; the solution is a bit of reality and tough love.

If you are homeless, there is a place for you; it just may come with strings – i.e., no drugs, alcohol, guns, etc.

I think most among us would agree that while we do have an obligation to provide shelter to the homeless, we have no obligation to provide the homeless with shelter where they can continue to shoot up, get high, drunk, etc.

In fact, that only makes the problem worse – as the state of the City of Seattle clearly shows.

I am a liberal and a lifelong Seattle resident; and quite frankly the so called “progressives” are ruining this city. They are some of the most closed-minded, bias among us, and tend to foist “solutions” on us that have no basis in fact or reality. As they say, the road to hell is paved with good intentions.

Ex-Westwood Resident March 15, 2018 (3:33 pm)

OVER $1,000,000,000 of taxes paid to assist the “Homeless” be the City and County in the last 10 years. Last year OVER $1,000,000,000 spend by the City, County, State, Federal and Private organizations.

If the City WANTS one more PENNY, they better publish, and we should DEMAND, a DETAILED audit of WHO, WHAT, WHERE, WHEN and the RESULTS of those expenditures. They can start by auditing SHARE/LIHI run by Scott Morrow to show where the MILLION$$$$$$ he has received has gone, along with the results of how many SHARE/LIHI has transitioned from ALL their “camps” to permanent housing.

Jack Carson March 15, 2018 (9:32 pm)

This is crazy. The city budget has gone from 4.4 BILLION dollars in 2014 to 5.6 BILLION dollars in 2017 and they want more. The city has taken 27% more of our money in just the last three years and the homeless situation is no better. More money regardless of where it comes is not solving the problem. We need better problems solvers, not more money via any tax. We need accountability from those who are spending our money. We need to recruit people to run for city council who understand business both small and large and know how hard we all work of our money

Mike March 15, 2018 (11:49 pm)

Am I reading this right, we spend over $1B / year in Puget Sound to help those that are homeless? https://www.bizjournals.com/seattle/news/2017/11/16/price-of-homelessness-seattle-king-county-costs.html

There are approximately 22,000 homeless state wide, so even if it was 20,000 in Puget Sound, we spend over $50,000 / homeless person / year. I’m pretty sure we can get housing, food and sanitary conditions for $50k / year. Even if you had a $2,000 / month place to live (which is better than most of my co-workers) you’d still have $26k left to get food, clothes, deodorant, toothpaste, soap, water, heat, high speed Internet, a 60″ LED flatscreen, HD Cable TV service, HBO, Showtime, and and and…

I find it hard to believe our politicians are spending the money wisely. Maybe instead of asking for more money they need to look at how they use the money that’s already being allocated.

rico March 16, 2018 (7:44 am)

As Mike’s analysis shows, we are simply getting robbed by the politicians and homeless industrial complex, period. For those who think spending more money on this agenda is a good idea, please re-consider that conclusion because the rest of us are tired of being robbed by this scam.

If you still think it is a good idea, you either have a job in the homeless industrial complex, or are, nevermind, no criticizing of people allowed here.

For those of you who support this scam, please prepare a rebuttal to Mike’s analysis, because the numbers tell quite a story.

Neil wilson March 16, 2018 (10:35 am)

The tax graduated tax formula only applies to roughly 1,100 or 5% of Seattles 22,000 businesses. The task force coined a “skin in the game” charge of $395 for the remaining 95% of businesses because it seemed like a good number. The 5% of big businesses that will use the tax formula, the rate per employee hour ranges from 10 cents per hour to about 25 cents per hour. Not based on the profitability (a progressive tax) of the company, but based on total employees, more employees= higher tax rate. That is not progressive, but ok, let’s go with their assumption. If any of the remaining 95% “skin in the game” businesses that pay $395 per year only have one employee, that small business would pay a rate of $395/2050= 19 cents per hour. A little less than the big company maximum tax rate. How does this protect small business? I guess there could be exemptions for protected classes. As with other new city legislation being challenged in court (ex. City income tax), many of the task force suggestions to raise additional taxes are currently illegal under state law. It’s clear the task force lacked the essential expertise necessary to put forth a credible report. It looked as if certain central city research staff were embarrassed when the presentation was made to the council committee (3/14/18). Well, except a couple of CM’s who co-chaired the task force. Then again, they lacked the expertise to do the work in a competent fashion, they wanted it for political reasons not good governance.

WSB March 16, 2018 (10:54 am)

Thank you for the indirect reminder that I hadn’t added the Seattle Channel video of the Council committee meeting yet (it wasn’t available when I wrote the story). For anyone interested:

http://seattlechannel.org/mayor-and-council/city-council/2018/2019-finance-and-neighborhoods?videoid=x88434

For future discussions, watch the Finance and Neighborhoods Committee agendas here – 2nd and 4th Wednesdays
https://www.seattle.gov/council/committees/finance
Gatewood March 16, 2018 (4:53 pm)

Excellent and insightful breakdown!

To take it further, If they only went after the top 5 % of businesses and dropped the skin in the game tax they would loose roughly 8.26 million per year but protect 20,900 small businesses from paying for a solution to a problem they didn’t cause. Leaving 66.74 million dollars per year from the head tax in place. I don’t think a head tax is a good idea but that looks like a hell of a compromise to protect small business and go after the group of businesses most consider responsible for the housing affordability issue.

Sorry, comment time is over.