Seattle has spoken, both at the ballot boxes and to pollsters. The city wants its new council, now with a 7-2 progressive majority, (or a 5-4 majority, depending on how you count Andrew Lewis and Dan Strauss), to tax corporations and the wealthy to provide "vital services" to its residents.
But that raises two big questions: Which kinds of taxes should the city pass? And for what?
"We Need to Get Out of This Abusive Relationship"
Before we tick off a long list of progressive taxes the council should pass to fund the city's urgent needs, we should take a moment as a city, as a Slogging community, to think about the consequences of passing even the littlest tiny baby tax on the wealthy and the corporations. Amazon's policy team will likely not be pleased! The Seattle Metro Chamber of Commerce will likely share a similar sentiment!
But even if Amazon inevitably threatens to shut down construction on a building, or take their big old H to a whole other Q, we must remember these heady days, the days directly after the wealthiest people and the biggest businesses in town tried and failed to buy our city council because we didn't want them to. Because what we actually wanted was for them to pay their fair share.
Over the phone, political consultant Riall Johnson said it best. "We need to stop being scared of blowback, or what Amazon’s going to do," he said. "We need to get out of this abusive relationship we’re in with these corporations, where they threaten to leave if we do something. I dare them to leave. I dare them to spend more money leaving than they'd pay in local taxes. Even if they do leave, their buildings won’t stay empty."
"Corporations just need to step it up," Johnson added. "They’ll live in a nicer, cleaner city, and we’ll have better infrastructure and less homelessness. Plus, they're still going to be rich! So I don’t know why they fight this."
In a statement, Seattle Metro Chamber of Commerce president and CEO Marilyn Strickland said that Chamber has supported "a variety of tax increases," though she didn't say the Chamber often supports property and sales taxes. "The key questions for us are: are city leaders using existing resources as effectively as possible, do city leaders agree on a plan for how they would use new resources to make progress on the problem at hand, do they have input from a broad cross-section of stakeholders, and how will they track their progress?”
So there's the Chamber's rubric. Amazon will likely have a stricter one.
We Got A Lot of Good Options Here
In her recent column for Crosscut, Katie Wilson, the general secretary for the Transit Riders Union, offers several solid tax options and lays out a pretty brilliant strategy. She argues the council could bring back a head tax with a higher exemption so that it only hits the city's biggest businesses, restructure the business and occupation tax to shift the burden from small businesses onto larger corporations, or pass Portland's version of a pay ratio tax and levy (at least) a 10% tax on businesses whose CEOs make more than 100 times a regular employee's median wage. Wilson thinks the new revenue could help build shelters, increase our affordable housing stock, or fill in the holes that Tim Eyman's idiotic Initiative 976 created in the transportation projects budget.
All of those sound like good ideas to John Burbank, executive director of the Economic Opportunity Institute. Burbank says the tax on excessive CEO pay, which is expected to raise $2.5 to 3.5 million from around 153 companies in Portland, according to the Oregonian, would "be a good start in terms of discouraging the acceleration of income inequality in our state," which has been rapid and severe.
"Also, frankly," Burbank adds, thinking of all the public funds going into the Denny Substation, "the city has put a lot of money into enabling the growth of Amazon, so it seems to be perfectly acceptable to tax corporations who are taking advantage of the city's investment and infrastructure."
To further balance the scales, the council should also consider adding a city-level estate tax on top of the state-level estate tax, which Burbank says could bring in "probably $60 or $70 million."
Seattle would have the authority to pass all of those taxes, Burbank says, thanks to a recent decision on the Seattle income tax from the Washington State Court of Appeals, which found that "Seattle has the statutory authority to adopt a property tax on income," albeit not a graduated tax. Hopefully the Supreme Court will say otherwise on a graduated tax in the near future, but that's another matter.
Council Member Elect Tammy Morales includes most of the taxes listed above in her progressive revenue platform, a list of six taxes she wants the council to study. Her list also includes a progressive Real Estate Excise Tax, an excess compensation tax, and a tax on people buying their second home. Morales told The Stranger that she wants to propose at least one of these new taxes by the end of her first year.
For political reasons, any of the taxes listed above should align with the most relevant need. Tax the wealthy and the well-housed to ease tax burdens on low-income residents and to build housing for people who don't have it. Tax corporations for the public services their companies rely on. Et cetera.
Former Seattle Mayor Mike McGinn thinks King County could step up and pass a payroll tax, say, to fund free transit, which would give Seattle more options to focus on homelessness services, universal pre-K, or whichever programs it wants to prioritize.
McGinn adds that Mayor Jenny Durkan could present a problem for the council, too: "We know she was elected with significant financial support from Amazon and the Chamber of Commerce, and that she’s generally been their ally. As a result of this election, is she going to double down on defending their prerogatives, or is she going to listen to the very clear direction the voters have given?"
Some Other Big Problems
Considering the sheer size and scope of the problems the city faces, however, Misha Werschkul, executive director of the Washington State Budget and Policy Center, cautions that "the council just doesn't have it in their power to fix" our broken systems, at least not in a way that doesn't rely on regressive property and sales taxes. "We have tools at the federal level—around wealth taxes, for instance—and we have tools at the state level, but we’re a lot more limited locally."
Werschkul adds that shaping public attitude around taxes, the burden of which disproportionally fall on people with low incomes in Washington, is really a matter of state law. "Just raising taxes on people who can afford to pay more is not enough," she said. "We have to take action to reduce taxes on people who are paying more than they should, and we need to do that in a way that’s visible to people. Until low-income people aren’t paying 18% of their income in taxes, there won’t be broad support for revenue in government services." Passing laws such as the Working Families Tax Credit, she said, would work toward that end.
Werschkul is, of course, correct. Even with these progressive taxes, the city does not and will likely never have the ability to raise enough revenue to completely solve the many crises facing us. We need to build 244,000 units of housing in 20 years—and 156,000 of those units yesterday—or else we become San Francisco, according to the Regional Affordable Housing Task Force's 2018 report. King County needs to raise spending on homelessness services to at least $400 million, according to the Chamber's own consultants, to even begin to address the problem. Eyman's initiative will cut out a $32 million chunk from the city budget, according to city officials, barring a legal victory for the City there. And while some of the local taxes proposed above could be used to pay for these desperate needs, they're not going to fully cover them, nor will they make it easier on people who are already paying too much in taxes.
But it's worth remembering that these local problems are partially the result of years of bad state and national governance. For instance, the federal moratorium on building new public housing and drastic cuts to the Housing and Urban Development department over the years gave us this housing crisis. Until that funding comes back, cities will continue to struggle to help put a roof over the heads of people who can't afford one. But even in the rosiest scenario, where Democrats take back the Senate and the White House in 2020, the new regime won't have the political wherewithal to rebuild the administrative state, uphold the promises it made on health care legislation, forgive my student loans, and dedicate enough funding to housing programs across the country.
I have about as much confidence in the Democrats running the legislature in Olympia, who couldn't even pass a capital gains tax with sizable majorities in the House and Senate, and who now have to spend the upcoming session patching up the giant budget holes created by Eyman's—and I cannot stress this enough—breathtakingly dumb Initiative 976.
That leaves the city to raise as much as it can from wealthy people and corporations. Though local efforts won't solve our problems to a satisfactory degree, we can't let state-level timidity and Congressional gridlock stop us from acting. We must accept that something is better than nothing, that raising and spending the money where it's most needed will measurably and meaningfully improve the lives of people sleeping rough, and even just assholes like you and me who rely on speedy bus service to ferry us from our jobs to our overpriced apartments, where we illegally smoke legal weed to kill the pain of next month's inevitable rent hike.
But we should also continue to remain uncomfortable with that reality. And when we see something that pisses us off—a sprawling homelessness encampment, a person in crisis in the middle of the street, a 20% rent hike, an insane property tax bill, a perpetually late bus—we should know the progressive majority can only do so much to fix it. We have to understand these local issues as the state and national issues they really are, and we need to let our representatives in those lawmaking bodies know that it's on them, too.