Seattles Big Business Tax, 1 Year Later: Controversial Policy Generates Unexpected Surplus

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Seattle City Council Approves Plan To Defund Police Department Slashes Jobs And Salaries Fox News

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Employers are concerned that in 2020 lawmakers will pass a new payroll tax on Seattle's largest business as part of a long-term effort to raise funds for affordable housing and services for the homeless.

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Now that Seattle's controversial jumpstart pay has been running for nearly a year, some of those claims can be weighed.

Jumpstart earned প্রথম 248.1M in its first year, $ 48.1M more than forecast, or 24%. Proponents of her case have been working to make the actual transcript of this statement available online. It is unknown at this time what he will do after leaving the post.

It is difficult to assess the impact of the new tax on an unprecedented epidemic. But the constituency behind Jumpstart said the tax was necessary to help the city cope with the Covid crisis. And despite the remote work and other obstacles caused by the epidemic, Jumpstart's excessive income proves that the city had the right way to finance essential services when it was most needed.

The city's largest private contractor: Not everyone, including Amazon, is a believer. He spoke openly with the city council about the company's dissatisfaction, its position on the companies, and its efforts to raise funds to select more moderate candidates. Amazon has consistently cited a rocky relationship with the Seattle government as the company expands recruitment to nearby cities.

We spoke with the Seattle government and business to find out how the first year of Jumpstart went, how windfall surplus funds will be used, and whether concerns about tax impacts on public technology are certain.

Seattle is a dead tax throw

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Jumpstart has become an electric bolt in the debate over how Seattle should deal with discrimination, with harmful laws imposing a one percent wage tax on hundreds of companies. This is partly due to the long and arduous process of becoming a jumpstart law.

The policy stems from a year-long fight against the so-called "mind tax" where Seattle progressives opposed employers at Amazon and other cities. Unlike the pay-roll tax, its predecessors required companies to pay a certain amount per worker, which opponents called the "labor tax." The city council passed the tourist tax in 2018, a few weeks later, when it canceled an expensive referendum and tackled its luggage in Seattle with a threat from Amazon.

Many thought it was over, but Council member Teresa Moskeda and her colleagues were able to lift politics out of the ashes and this time she survived.

Unlike tourist taxes, Jumpstart targets wages and not the number of employees. Pay more than $ 150,000 per year for companies with an annual salary cost of $ 7 million or more. Tax rates vary, large companies pay more.

It is not clear how much Amazon paid more than 8 248.1 million. This information is kept secret by the city's finance department.

Employees who spend most of their time in Seattle, at home or in the office are taxed on their pay, no matter where the business is. This means that more than 120 foreign technology companies that set up engineering centers in Seattle were taxed for tapping into the city's technological talent.

A spokesman for Meta and Google, which employs more than 14,000 people in the Seattle area, confirmed to GeekWire that the company paid the jumpstart tax last year.

Seattle began tax collection in January 2021. In March, the city recorded a final year of $ 248.1 million for its first year at Jumpstart, significantly higher than the 200 million expected to be taxable.

A further $ 48.1 million Seattle reserves could be met. Most of Seattle's planned 200 million will be financed by the city's affordable housing projects. About 20% of staff will go on environmental and economic development projects, including training and child care. Overall, the city's total funding for 2021 was $ 110 million more than originally planned, including $ 48.1 million from Jumpstart.

According to the latest forecast released last month, Jumpstart's revenue will exceed $ 277 million by 2022, up $ 43.6 million from November.

"We can accept well-paid jobs and employers that create better conditions for employees, at the same time we evaluate companies that succeed in creating a unique place for everyone to live," Moskeda said in a statement. . GeekWire interview.

Taxation relies heavily on only two industries: information and professional services, and business services account for more than 82% of Jumpstart's tax revenue.

Washington State's latest revenue forecast shows more money than expected for the current budget, with a net surplus of about $ 3 trillion.

Physical location in a digital city

While Jumpstart applies to wages paid to employees living in Seattle, many employers are global in terms of size and reach. This has become a unique challenge for policymakers before the epidemic suddenly forces thousands of workers to work remotely.

The City Council has given employers a chance to overcome this obstacle. They may consider employees living within the city of Seattle and meet the pay threshold, or they may pay taxes based on whether all of their employees earn more than 150,000 a year, regardless of where they live.

"Despite this opportunity, we're working more productively than expected, which I think is a good indication that while some people are working out of town, we're seeing growth in Seattle and seeing growth, especially in technology." Sector …, "said Masjid.

The administrative and logistical challenge of determining where employees spend most of their time has become a headache for employers, according to Grant Shaver Clark Nuber, Nuber's chief accountant. Shaver Jumpstart advises medium-sized businesses on compliance.

“Most of them were very frustrated because many companies do not have the infrastructure to know where and where they work,” he said. "Especially in the Kovid era when people are increasingly working from home."

Amazon tax


As Jumpstart's largest company, Amazon is considered by many to be the benchmark of Seattle's technology industry. But long before the pay-roll tax was written, the tax war with Amazon's own city began.

For the past five years, the political debate over taxing Seattle's largest corporations has been raging. Leftists, led by council member Kshma Savant, have been campaigning for an "Amazon tax" for years, and have been protesting outside the company's headquarters. The homeless camps that share more than 1 1 trillion in business on the streets are seen as a sign that Seattle's tax system needs to be reformed.

Amazon responded with warm rhetoric and political tactics. The company stopped construction of the Seattle office building due to a tax dispute and spent more than $ 1 million to rebuild the failed city.

Jumpstart's approach is more measurable than Savant's big business tax, but it still hits Amazon. In recent years, the company has not expanded its footprint in Seattle and has abandoned plans to occupy the vast Rainier Square Tower leased to other tenants.

Amazon is growing rapidly in cities around Seattle, especially around Bellevue, because it does not have the taxes of large corporations. As of late last year, Amazon had 7,500 employees at Bellevue and is expected to grow to 25,000 – the equivalent of its headquarters in the Washington, D.C. area – or HQ2. Amazon employs 1,400 employees in Redmond, Washington.

Amazon declined to be interviewed for the story, but commented on CEO Andy Jassi during the 2021 Geekware Summit when he described the difficult relationship with the Seattle City Council.

"First of all, we don't think HQ1 is Seattle," Jassi said. “We think it's really Puget Sound. We have a lot of people in Seattle, but we also have a lot of people in Bellevue, and that's where most of us will grow. A


Amazon's plans are part of Bellevue's ongoing technology boom. Meta, TikTok's parent company ByteDance and other tech giants are also taking office in the past. Technology entrepreneurs say it's much easier to find talent at Bellevue because it was a tough place to represent young tech professionals who want to work in Seattle. The Eastern tech scene is undoubtedly growing, but it's not clear if Bellevue's profit is a loss to Seattle.

Shaver said he had already heard rumors of big business with Bellevue's presence moving some posts earlier, but said taxes were not their main concern.

"Perhaps as a result of this tax, some companies will decide to relocate employees earning more than $ 150,000 outside of Seattle to places like Bellevue," he said. "Although this is probably a side issue, especially since companies are trying to decide whether they will force employees to return to office."

Boost or destroy Seattle's economy?

When Jumpstart finally came out, Amazon asked employees what city they wanted to work in outside of Seattle. The survey raises fears that taxes will kill Seattle jobs in times of economic uncertainty. John Scholes, CEO of the Seattle City Center Association, said the survey was "a precautionary measure that Seattle's long-term job tax will have a negative impact on the city's future economic health and revenue. Local taxes to finance basic municipal services."

The Seattle Metropolitan Chamber of Commerce, which represents more than 2,000 local businesses, filed a lawsuit against Jumpstart in late 2020. Could not pay tax. Ability to earn a living. A King County judge dismissed the case last summer and the House of Representatives filed an appeal. An oral argument will be heard in the Washington State Court of Appeal on Friday.

"The biggest concern we hear is that the tax is illegal," said Alicia Till, House Vice President of Public Affairs and Communications. "The complexity of tax administration is a related part and we expect it to increase next year as more people begin to return to their jobs."

As soon as the tax went into effect, Matt McElwain, CEO of Madrona Ventures Group, warned that employers could recommend "identifying their team and operations in Seattle."

"I already know that the leases of many of our holding companies have expired and they have no desire to return to this physical location," he said at the end of 2020. Think second and third. Impact of this order for all small businesses. All around you. "

When GeekWire contacted McElwain for this story, he did not give a specific example of companies leaving Seattle after the jumpstart, but said it was difficult to end the office lease. McElwain said Seattle-based startup Suprari canceled the deal before it was acquired by Microsoft and said Cumulo was considering its options due to downtown crime, according to Geekware in February.

There is very little evidence that Jumpstart is the only company that has given up Seattle or its payroll. Earlier this year, Amazon doubled the base pay for business and technology workers, many of whom were based in Seattle. Today, Amazon employs more than 50,000 people in Seattle.

And the landscape of the region is hotter than ever, with startups now worth about $ 20 billion, or more than $ 1 billion. Nine of these growing groups are based in Seattle.

Taxes have been paid at the center

While employers who tell the story are concerned about Jumpstart, they see a big threat to the long-term effectiveness of Seattle's hub. নিয়োগকর্তারা গত এক বছরে অপরাধের উল্লেখযোগ্য বৃদ্ধির সাথে কাজে ফিরে যাওয়ার তাদের পরিকল্পনার ভারসাম্য বজায় রাখার চেষ্টা করছেন।

শহরের কর্মকর্তারা বলছেন যে 2021 সালে আগ্নেয়াস্ত্রের ঘটনা 40% বৃদ্ধি পেয়েছে এবং সাম্প্রতিক ঘটনাগুলি আমাজনকে একটি ডাউনটাউন অফিস ভবনে নিযুক্ত কর্মীদের জন্য অফিস প্রতিস্থাপনের প্রস্তাব দিতে প্ররোচিত করেছে।

মহামারীজনিত কারণে কাট ক্রমবর্ধমান হওয়ার সাথে সাথে, নিয়োগকর্তারা সিয়াটলকে শহরতলির নিরাপত্তার সমস্যাগুলি সমাধান করার জন্য অনুরোধ করছেন যাতে কর্মীরা আত্মবিশ্বাসী হতে পারে যে তারা কাজে ফিরে যেতে পারে। ব্যবসায়িক সম্প্রদায়ের এই গল্পের জন্য আমরা যাদের সাথে কথা বলেছি তারা সিয়াটেলের কর্মচারীদের ক্ষেত্রে জাম্পস্টার্টের নিরাপত্তার কথা উল্লেখ করেছে।

"আমরা খুব কমই জানি যে এর ফলে একজন নিয়োগকর্তা চাকরি পরিবর্তন করে বা একটি ব্যবসা বন্ধ করে দেয়," টিল বলেন। "ব্যবসা একটি ইকোসিস্টেমে কাজ করে, তাই এমন অনেক সমস্যা রয়েছে যা অবস্থান নির্বাচনকে প্রভাবিত করে, যার মধ্যে জননিরাপত্তা, গৃহহীনতা, পরিবহন এবং বাণিজ্য আলোচনার মতো জীবনমানের সমস্যাগুলি সহ।"

সিয়াটেল সিটি কাউন্সিল ফেব্রুয়ারি 20, 2018

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