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What will be the result of Seattle's new tax on companies that make over 20 Million a year?

Their 15 dollar minimum wage pushed small businesses outside the city limits and resulted in workers making less money as their hours were cut. This new tax is a head-tax for every worker the company has that works within the city limits.

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Northwest · M

Their 15 dollar minimum wage pushed small businesses outside the city limits

No. Two studies, done by the U of Washington and UC Berkeley, showed that jobs did not migrate. It's even illogical to suggest this would be the case, as most of these jobs are in the service industry, such as restaurants and retail (clothes, etc.).

Are you suggesting that Canlis restaurant is going to move, from its current location to Bellevue?

and resulted in workers making less money as their hours were cut.

Did you read the studies? They were published in June 2017, showing that the employees who were affected, made 9% less, as some of their hours were cut. That's not the full story though. It turns out that the study did not consider some other factors, like decisions these employers had already made, regarding their labor force, in response to how another major Seattle business, affected their business: specifically Amazon.

This new tax is a head-tax for every worker the company has that works within the city limits.

This issue was discussed a few days ago. The claim was that Amazon shut down construction. I was poo-pooed, when I said that this was a PR move.

The city council voted on a compromise, and the head tax will be about half what was initially proposed. Even before the vote was ratified by the Mayor, Amazon had quietly resumed construction on the building.

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Northwest · M

@SuicideBiProxy2 City shopped for studies? Huh?

Perhaps you can share the names of some of the businesses that moved.

The reason Amazon is looking for another headquarters, is that the area is near max capacity at all levels. Infrastructure, engineers, etc. Amazon has thousands of job openings it cannot fill. Same with Microsoft, Starbucks, Costco....

SuicideBiProxy2 · 36-40, M

@Northwest Indeed. Now with a headcount tax, they will simply fill those positions in other locations and depending on the economic consequences to their bottom line, they will shift people to other locations. To pretend this is going to have no effect is absurd.

The company I recall was a restaurant. Most companies reduced workforce and cut hours.

Northwest · M

@SuicideBiProxy2 This does not answer my question. You said that the city shopped for studies, so what are those studies?

Amazon's statement:

We are disappointed by today’s city council decision to introduce a tax on jobs. While we have resumed construction planning for Block 18, we remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here. City of Seattle revenues have grown dramatically from $2.8 billion in 2010 to $4.2 billion in 2017, and they will be even higher in 2018. This revenue increase far outpaces the Seattle population increase over the same time period. The city does not have a revenue problem — it has a spending efficiency problem. We are highly uncertain whether the city council’s anti-business positions or its spending inefficiency will change for the better.

It's back to the near daily rhetoric between the City and Amazon. "question growth here" is somewhat gratuitous, is not quite the secret is it? they already know there's no more room for growth in Seattle. The entire South Lake Union area is Amazon. This is why they're looking for a 2nd headquarters outside of the Seattle area. Duh.

What the statement does not mention, is the disagreement is over how the city should spend the money on the homeless.

The same with Starbucks, it's not about the tax itself, it's about how the city plans on spending it. The Starbucks statement:

This City continues to spend without reforming and fail without accountability, while ignoring the plight of hundreds of children sleeping outside. If they cannot provide a warm meal and safe bed to a five year-old child, no one believes they will be able to make housing affordable or address opiate addiction. This City pays more attention to the desires of the owners of illegally parked RVs than families seeking emergency shelter

To pretend this is going to have no effect is absurd.

The head tax is but one issue affecting job growth within the city of Seattle. Everything has an effect, and to claim I said it has no effect, is truly absurd, it's just not the effect you claim.

Still waiting for the names of those businesses that moved, solely due to the raise in minimum wage.

sunsporter1649 · 70-79, M

Democrats never met a tax they did not like.

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Northwest · M

@sunsporter1649

I have a bridge I want to sell you....cheap.

I have a better idea for you, try to rent a brain. You currently don't have one.

You're trying to tell me about my hometown company, one that I'm not only familiar with, but also know the people involved. Get a clue.

sunsporter1649 · 70-79, M

@Northwest Gee, I suppose it was just a coincidence that when South Carolina offered to support Boeing's move of manufacturing and administration there that Washington state suddenly decided to reduce the tax burden on Boeing to a manageable level, and gained huge tax breaks from Washington to remain in Washington state in 2013. Funny how things work out.

Northwest · M

@sunsporter1649 OK, you decided to give up on the Chicago storyline.

So, let me school you some more.

That whole "give me incentives, not a reduced rate, else I will move to another state" does not really work for a company like Boeing, but you have no clue how this works.

20 years ago, the Technology Triangle area, was not ready yet, to absorb operations for a company like Boeing. Today, it is.

Today, the Puget Sound area, is getting pretty tight on tech-trained workforce, creating a labor shortage.

So, a well run company, like Boeing, would modify the design of the all models of the 787, to make it possible to benefit from standardized models, allowing Boeing to move production to a single facility, in this case, in S. Carolina.

This frees Boeing's advanced facilities in Everett, to start building the NMA (New Mid-Market Airplane) or the 797, without having to slow down 787 production.

And, that's how it's done, without having to worry about not having enough trained workers to get it done.

School is out for the day.

hunkalove · 61-69, M

I have no sympathy for greed. If you can't pay your employees a livable wage, get out of the way and let someone else try.

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hunkalove · 61-69, M

@SuicideBiProxy2 Business should be a win-win situation. Someone creates a product or service that improves life, doesn't hurt the environment, creates jobs with livable wages, and provides a profit. Greed is a horrible thing, but we live in TrumpLand. Me-me-me is all that matters.

SuicideBiProxy2 · 36-40, M

In a perfect world that would exist. However that world will never exist. It is unrealistic.

sunrisehawk · 61-69, M

@hunkalove Business is a win-win when successful. A needed or desired product or service is provided to the consumer for what the consumer is willing to pay. It becomes a lose-lose situation when people through governments decide to set "livable" wages (whatever that arbitrary number is) or any number of regulations and taxes without regard to economics. Then the business and consumer both lose.

beckyromero · 36-40, F

I have no problem with the minimum wage hike.

But the head tax on top of that is likely to forestall wage increases workers might otherwise have received.

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QuixoticSoul · 41-45, M

I don't much like that initiative. But Washington has a very regressive tax system and needs ways to fund their social services too. This seems like a kludge, however.

Northwest · M

@QuixoticSoul We don't have a state tax, and it's high noon, we deal with the effects the tech industry had on the natives. An 1,800 sq ft house, 40 years old, with no view, on a 1/4 acre lot, in a not so great part of town, goes for $1M now, and they last 1-2 days only on the market.

Retirees are hit hard with real high real estate taxes, and they're forced to sell and move to Arizona and Florida.

Full disclosure: I am part of the tech industry that caused this, and a California transplant (34 years removed), but the tech industry, other than the isolated PR tug of war, is mostly on board, trying to fix the problem.

Doubters can take a peek into signs on Amazon office windows.

It may be a kludge, but it's needed, to fix an urgent problem, aggravated by the current plans to take down HWY 99 between SoDo and Queen Anne, which will cause all the shelters that operate in the area now, to relocate.

Xuan12 · 31-35, M

Not much really. It's getting more press than is really warranted. Bigger news would have been if that tax was being levied on automated labor.

MethDozer · M

They are going to drive all the big names that headquartered there.

QuixoticSoul · 41-45, M

@MethDozer Over $40 mil a year? Doubtful.

But I guess that would help the housing crisis as well 😂

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