Lawmakers in Olympia are considering an employer-side head tax! Unfortunately, its dumb.
Lawmakers in Olympia are considering an employer-side payroll tax! Unfortunately, it doesn't raise enough money to solve the homelessness problem. ALEX WONG / GETTY

Wednesday afternoon Democrats in the House dropped a bill that would allow King County to impose a small, employer-side payroll tax (between 0.1% and 0.2%) on businesses who compensate employees more than $150,000 per year.

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Exempt businesses include gas companies and gas stations, places that sell liquor, government agencies, and "comprehensive cancer centers."

The tax would raise $121 million per year, and the county could only spend the money on affordable housing, homeless shelters, and supportive services for people with behavioral health issues.

The proposal requires the county to spend half of the money on people who earn 30% of the area median income and none on people who earn more than 80% of the area median income. (For a family of one, those numbers in King County are $23,250 and $61,800 per year, respectively.)

Seattle Mayor Jenny Durkan and King County Executive Dow Constantine have already issued a statement thanking lawmakers for proposing the bill and urging them to "act with urgency," and the Seattle Times reports that Expedia is backing the bill, so we've got some big tech buy-in, people!

While I'm pleased to see Democrats proposing a tax on big businesses, I would like to express some major policy and political concerns I have about this bill.

King County Councilmember Reagan Dunn is already decrying the legislation as a job-killing zombie head tax (which it is not), and the large technology companies who didn't explicitly sign off on this tax will likely lobby against it as such. Though the bill singles out only King County companies, Republicans and moderate Dems in the legislature will surely claim that the bill will kill jobs all over the state, or at least have statewide impacts, etc., etc., c.f. I-976.

All of those arguments are bad, and Democrats should welcome that fight, but it's smarter to have that fight over a bill that would—and I can't stress this enough—actually raise the amount of money necessary to solve the problem.

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The latest analysis from McKinsey shows that King County needs to raise “an additional $450 million to $1.1 billion per year for the next ten years, above and beyond what is currently being spent" in order to fully address the homelessness crisis. Only in Seattle and King County is raising 10 to 25% of the money necessary to fix a problem considered a good policy solution upon which the legislature must "act with urgency." Excellent work, people. Truly transformational. Can't wait to solve one-tenth of this problem, finally, after five years since declaring a state of emergency on homelessness.

Moreover, though the bill explicitly says big companies can't dip into employee salaries to pay for the tax, the opposition will point to that $150,000 number and claim the Democrats are attacking middle-class jobs, middle-class babies, middle-class small businesses, middle-class vocational schools, middle-class whatever-the-fuck. Democrats could avoid this infinitely avoidable political mistake by taking up the bill Sen. Joe Nguyen introduced last year, which imposes a higher version of this same tax, raises double the money, and only hits companies who pay million-dollar salaries. While that bill's estimated $226 million STILL isn't enough to adequately address the issue, advocating for a millionaire's tax sounds a lot more politically feasible to me.

Finally, passing this bill would likely make it much more difficult to pass other bills or initiatives that could actually raise the amount of money the county—and the rest of the state, for that matter—needs. Unless lawmakers increase the take here—or consider passing multiple progressive tax bills— this measure will just be one more capitulation to the giant businesses who created this problem in the first place.