Tax, tax, tax. That seems to be the only solution the State of Washington’s lawmakers can come up with to close their budget deficit. Recently, Governor Bob Ferguson signed the millionaire’s tax into law, which places a 9.9% tax on individuals who make more than $1 million a year. Now, socialist Seattle Mayor Katie Wilson is looking at a wealth tax for businesses in the city, despite the exodus currently happening due to unfavorable laws and taxes in the area.
Another Wealth Tax for Seattle?
New to politics, Wilson is known as having a progressive agenda, with some of her ideas – such as government-run grocery stores – leaving people scratching their heads in confusion. The Emerald City is projected to have a $140 million budget gap in 2027, and Wilson’s solution is to tax businesses. “My team is very hard at work looking for progressive revenue options, taxing the rich, taxing big businesses in a way that we think will be politically viable and practical,” she said. One proposed solution is to expand on the JumpStart tax, which already charges businesses up to 2.4% on each employee who earns more than $150,000.
But the JumpStart tax is just one part of the overall burden. The city also has a Business and Occupation tax that began this year, charging an additional 5% tax on the salaries of people who make more than $1 million. This fund is supposed to help provide financial assistance for housing programs. Gov. Ferguson recently signed legislation that reduces Washington’s estate tax from 35% to 20%, with a $3 million exemption. This reduction came after lawmakers were concerned about wealthy residents leaving for greener pastures. Wilson announced during a press event that she is trying to rein in spending and instructed city departments to prepare scenarios for 5% and 10% budget cuts because of the looming deficit.
Tax the Rich and Homeowners
That hasn’t stopped the mayor, however, from proposing a $410 million tax to fund Seattle libraries for the next seven years. The current levy, approved by voters in 2019, is about to end, and the new one is twice as high.
And how will this be funded? Taxing the homeowners, of course. Residential property owners in Seattle with a median house value of $850,000 would be required to fork out $163 per year from 2027 to 2033. The current amount that expires this month is $85 per year. The funds would go toward keeping the 27 libraries in the city open and functioning, including maintenance, new programs, and staffing. There is also a controversial $2.4 million that would be allocated to pay for an office of inclusion to focus on diversity, equity, inclusion, and accessibility.
“The library levy is a small amount of the more than $8,000 in taxes a Seattle resident with a home assessed at $850,000 pays,” Everett Post reported. “Still, it could affect every resident in the city, whether they have set foot in a Seattle library or not. With the passage of a $410 million library levy, without any additional amendments that would add to the cost, the city would be nearing a state-mandated property tax cap of $3.60 per thousand of assessed valuation.”
But that doesn’t count all the amendments being made with additional funding requests that move the levy tax from $410 million to $468 million. The levy is set to go to voters on August 4, after the city council makes a decision on the amendments.
The proposed library tax means there might not be enough money to fund other priorities that voters will still need to approve, such as roads and pre-school programs, which are set to renew in 2031, City Councilwoman Maritza Rivera said at a committee meeting. “It is fiscally irresponsible to increase the proposal, given the city’s other needs,” Rivera explained, referencing upcoming renewals for other projects, such as transportation and low-income housing.
Leaving Seattle
A wealth tax may seem like a good idea to some, a way to bring in more money for city and resident needs, but the truth of it is seen in the exodus of businesses and the wealthy. Oracle recently laid off 491 of its Seattle-area workers, and Meta is dropping back 168 employees after other cuts made earlier this year. Microsoft and Amazon have let go of more than 20,000 tech employees as well. Some of the bigger corporations are laying off employees while others are moving to other cities and even states – like Starbucks, which is reportedly moving its home office to Nashville, TN.
A recent survey, according to AM radio station 570 KVI, found that 44% of Washington’s business leaders are considering moving their personal residence out of state, with taxes cited as the top concern. And who could blame them? Washington is already an expensive place to live, especially in the Greater Seattle Area. Crime is high, taxes are escalating, the homeless are everywhere, and a new “Economic Report” from the Downtown Seattle Association “found that the 10 most valuable office buildings downtown have had their values decrease by more than 50% since 2021.” In fact, the vacancy rate hit a record high according to that report, with 35% of all office spaces sitting empty. Still, lawmakers think it’s a good idea to keep heaping taxes on businesses and individuals.
