Seattle Abruptly Repeals "Head Count" Tax on Employment

June 15, 2018

An annual tax on each employee of large businesses that was passed unanimously by the Seattle City Council less than a month ago was repealed by a 7 to 2 council vote after a referendum to repeal the tax was embraced by Seattleites.

Recognition of reality:  "We don't have the time or resources," said one council member, "to change enough minds to be successful at the polls in November."  The referendum to repeal the tax quickly received more than twice the needed signatures to be added to the November ballot.

The idea to tax jobs has been taken up in Silicon Valley with cities such as Cupertino, Mountain View, East Palo Alto, and San Francisco considering forms of the tax.  It remains to be seen what the fallout of Seattle's rescinding the law will be.

Why it matters:  The tax's proponents zeroed in on the fact that the tax was to be levied exclusively on Amazon and other large companies, and in doing so achieved unanimous city council approval just four weeks ago.  Employers successfully argued that the tax would have an adverse impact on the job market in the Seattle area.