Seattle’s head tax is bad for Washington business, panelists say

Seattle’s “head tax” could have implications for all of Washington, state Sen. Mark Schoesler, R-Ritzville, said Wednesday.

Schoesler, Matt McIlwain, managing director at Madrona Venture Group, and Jason Mercier, director for the Center for Government Reform, spoke on a panel about Seattle’s new head tax at the Washington Policy Center’s “Solution Summit.”

The organization is a pro-free-market think tank with offices in Seattle, Olympia, Spokane and Richland.

The tax would be an annual $275 per employee for companies that gross at least $20 million annually within the city of Seattle.

The city’s new tax is an attempt to combat its homeless crisis, which proponents of the effort say has gotten worse because of the increased cost of living those large companies create. It’s fair, they say, that these companies should pay to make it right.

The panelists argued that such a tax is illegal, and that an attempt to appeal it to the state Supreme Court could affect all of Washington if the judges decides to legitimize the tax.

Right now, Washington is one of the few states that do not have an income tax. That unique characteristic helps Washington have a stronger economy than it otherwise would have, Schoesler said.

“It’s the lack of an income tax that makes us a friendly place for entrepreneurs,” he said.

McIlwain pointed out that multiple companies, including Starbucks, Amazon and Alaska Airlines, have expressed concern over the tax and that Washington voters have rejected income taxes multiple times over the years.

“In the last year, Amazon has announced they’re opening headquarters outside of the Pacific Northwest,” McIlwain said. “They’re sending a message.”