Last month, a task force overseen by Seattle’s city council introduced a proposal for the Employee Hours Tax, a bill that would tax the city’s largest companies in an effort to raise $75 million to help provide homeless shelters and affordable housing to our poorest residents. If the bill passes, our company, Gravity Payments would pay somewhere between $16,000 and $38,000 annually depending on how the tax is ultimately calculated. As the CEO, I can think of several ways we might be able to use that money to grow our business or help our employees or clients. But, as someone who has largely benefited from Seattle’s economic boom, I support the Employee Hours Tax.
Everyone knows that Seattle is becoming an increasingly unaffordable place to live. The cost of living is 49 percent higher here than elsewhere in the country and housing costs are a whopping 94 percent more expensive. It’s no wonder then that, among America’s largest cities, Seattle-King County has the third-highest homeless population in the country, just behind New York and Los Angeles.
Meanwhile, even though corporate profit and executive pay is at record highs and the income gap between the richest and poorest Americans continues to widen, Congress has doubled-down on addressing the needs of corporations and executives over the average American worker. Thanks to the tax law passed by Congress earlier this year, America’s largest companies stand to gain a massive tax break as the federal corporate tax rate falls from 35 percent to 21 percent. It is only right then that those who stand to benefit the most from our society’s laws and incentives give back to those who won’t.
Thanks to our $70,000 minimum wage, Gravity employees don’t need to worry about whether they can afford to live in Seattle, but they are still very much aware of their city’s homeless problem. One of our team members told me that, during their commute to our brand-new Ballard offices each morning, they can’t help but feel like part of the problem as they pass homeless encampments along the way. As we enjoy the fruits of being part of Seattle’s middle and upper-middle class, how can we ignore those among us who lack even the most basic needs?
Although there are several options on the table for how the bill will be funded, I am in favor of the one that would place the primary responsibility on Seattle’s largest and most profitable businesses. Under this option, businesses making $10 million or more in gross revenue—about 5 percent of the city’s companies—would be taxed a small percentage for each full-time employee on the payroll (0.25 percent for 1-100 employees, 0.5 percent for 101-500 employees, and 0.75 percent for more than 500 employees). Smaller businesses earning annual gross revenue between $500,000 to $10 million would pay a flat tax of $200 a year.
While some of Gravity’s clients would be counted among that 5 percent—about 2 percent of the 1200+ merchants we serve in the city—most of our clients would owe, at most, $200, if they were subject to the tax at all. As an entrepreneur who has dedicated his career to helping small businesses save money, I know that even small expenses can be burdensome, but I believe the task force’s proposal addresses these concerns in the most reasonable way possible. I also believe that the long-term benefits of supporting such a bill far outweigh any costs. When people don’t have to worry about where they’re going to sleep tonight, they are free to focus on other things, like finding a job. And when more people are able to join the local labor force, the economy as a whole will benefit. I also believe that taking care of our neediest residents will make the city more prosperous for both its businesses and citizens.
Gravity’s mission has always been to stand up for the little gal or guy. In our day-to-day business, that involves helping independent business owners take the hassle out of credit card processing, but we have always extended that mission to include the men and women of our community. There is a responsibility that comes to being successful. We’re part of an ecosystem in which those who are fortunate should be supporting those who are less fortunate.
I support the EHT as a proud Seattleite, a CEO, and a member of humanity, and I hope my fellow business owners will do the same.
Dan Price is the CEO of Gravity Payments, a credit card processing company.