by Jesiah Wurtz
Skyrocketing rents, the constant looming threat of displacement, proliferation of luxury apartments, and the rapidly increasing economic segregation plaguing this city are facts of life in Seattle. As a co-owner of a small South End business that has become a hub for artists, organizers, and other community members struggling to hold space in this reality, I see and hear the impact of gentrification daily – and there’s no end in sight. Tech giants like Amazon are driving the cost-of-living to unattainable heights for the poor and working class here, who are already forced to get by under some of the most regressive tax codes in the nation. With Trump handing out giant corporate tax breaks while cutting crucial social service funding, Seattle simply cannot continue allowing profit-driven corporate monoliths and their big business lobbyists to evade their civic responsibilities to the rest of us. If we are to equitably share a city, it is time to hold these companies economically accountable for their impact on the housing market.
The Progressive Revenue Task Force was established by Seattle City Council last November to forge a path towards this goal. I was invited to sit on the task force, along with 16 other small/mid-sized business owners, community members, and other stakeholders. Although the Seattle Metropolitan Chamber of Commerce and other big business leaders were also invited to join, they predictably declined to participate in this truly inclusive process. Disappointed but unabated by their absence, we spent nearly three intense months identifying policies that could equalize the playing field for the most disadvantaged in our city, and mitigate the rampant growth of displacement and houselessness in our communities.
This successfully culminated in a new report, which issues recommendations to City Council for how Seattle can secure and dedicate an additional $150M in progressive tax revenue for housing justice – half of which can be easily funded through an Employee Hours Tax. Such an EHT could collect from $200-$400 per employee per year from companies like Amazon, bringing $75M more in desperately needed resources to serve the most vulnerable in Seattle. The task force recommends that roughly 80% of funds raised be earmarked for the creation of new affordable housing, with the remaining 20% allocated to fund emergency shelter and services.
However before the Progressive Revenue Task Force report even had a chance to fully settle at City Hall, guess who emerged from their silence and non-participation with an AstroTurfy campaign designed to mislead, misinform, and invalidate the prospect of an EHT? Seattle Metropolitan Chamber of Commerce. As of this moment while writing, over 250 business owners have already hastily signed their opposition to a tax policy we still have agency in shaping to benefit local economy. The worst part is, those responsible for this campaign are pretending to be us, donning a facade of concern for “small business” and severely manipulating the facts. Thus, as a South End community member, small business owner, and part of the task force that issued these recommendations, I am gratefully taking the opportunity provided by the Emerald to clear up some facts. Here are the key points about the task force recommendations that must be understood:
- Businesses grossing less than $500k annually would be completely exempt from any EHT or fees
- Businesses making between $500k and an amount TBD by City Council (likely between $5-10M annually) would be exempt from the EHT, but would pay an annual fee of $395. For a business exactly at the $500k threshold, this would only amount to a truly insignificant 0.00079% of annual revenue. This is being referred to as the “skin-in-the-game” fee.
- As a progressive tax, the EHT is fundamentally designed to extract most revenue from large businesses and corporations. As Amazon paid zero dollars in federal income tax on $5.6B in profits in 2017, and many other Seattle-based corporations are similarly benefitting from hyper-regressive local, state and federal tax policies, an EHT would still not affect these corporations’ profitability.
As such, claims made by the Seattle Metropolitan Chamber of Commerce that such a tax “will affect every small business,” are clear falsehoods. It is highly ironic that the Chamber thinks they can speak to the struggle of small business when, in reality, they represent the types of businesses actually paying the bulk of the tax: those such as CenturyLink, Microsoft, Amazon, Bank of America, Alaska Airlines, JP Morgan Chase, Comcast, AT&T, Expedia and more.
Now this same group that intentionally abstained from the Progressive Revenue Taskforce has found legs in a new group, OneTable, galvanized by Mayor Jenny Durkan, that claims to also be concerned with affordability. However, the only suggestion received so far from OneTable is yet another regressive sales tax. Not only would this, again, disproportionately affect the lowest-income members of our community, it would also be grossly insufficient in addressing the current scale of the problem. This isn’t progress, no matter how well you dress it up.
While the Progressive Revenue Taskforce recommendations may not be perfect, they are not meant to be creed. They are meant to be a compass to guide the city into a more equitable, progressive approach to tax revenue through an inclusive, community-centered democratic process.
New taxes, even those designated to fund affordable housing, cause understandable concern. However, there are easy ways to prevent an EHT from contributing to the unaffordability of this city for local residents and the small businesses that serve us. First, I believe it is imperative we get rid of the so-called “skin in the game fee,” which has been immediately rejected by progressives and business owners and associations alike. Second, we must set the exemption threshold at $10 million in annual revenue. While this may seem like a high threshold, the amount of undue tax burden on businesses in this bracket is truly significant, and many familiar local businesses fit into this category. Ultimately, it is not businesses making $10 million or less in revenue that are driving our affordability crisis. Other exemptions to protect businesses that provide cultural space and services for locals must also be examined. However, we cannot let big business interests con us and our community into throwing the baby out with the bathwater.
As a former member of the task force and a small business owner vested in the issue, I’m personally committed to hearing concerns and helping bring the right voices to the table in crafting and advocating for a plan that ensures the EHT is implemented in a way that strengthens a locally-rooted economy. In order to secure an equitable future, we must work together to advocate for fundamental change in the current trajectory.
Please join us this Friday night at the “Housing for All House Party” at Cafe Red for music, speakers, and discussions with community organizers and advocates behind these efforts. Together, we can secure the right to the city for all, and achieve the transparency, honesty, and justice we need for a better Seattle.
More information on the Housing for All House Party this Friday can be found here: https://www.facebook.com/events/201766683750693/
Jesiah Wurtz is co-owner of Cafe Red, board chair of the Martin Luther King Business Association, and member of the Artist Coalition for Equitable Development.
Featured image by Alex Garland