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The real problem is the incentives the tax creates. It's per head, which means every time you hire someone, your taxes go up, and every time you fire someone, y
by mrfredward 8y ago
The real problem is the incentives the tax creates. It's per head, which means every time you hire someone, your taxes go up, and every time you fire someone, your tax bill goes down. It's a tax incentive for destroying jobs, specifically low wage jobs held by the most vulnerable people, since the tax is a drop in the bucket for executives, but much more significant percentage wise when hiring low skilled workers.
It should have been a tax based on revenue, so that it targeted the financial footprint of the company, rather than punishing companies for employing lots of people.
- bthrn 8y agoWouldn’t a company’s taxes/costs go up with each new hire whether there’s a head tax or not though? Social security for example is half paid for by employers.
- kd0amg 8y agoPayroll taxes scale down as the employee's pay rate scales down. This was a flat amount per employee-hour.
- drak0n1c 8y agoExactly, the Seattle tax punishes low-margin employers of blue collar workers much harder than it hits employers of high-salary white collar workers. It's as if it were a carbon tax on labor designed to speed to adoption of automation.
- dexterdog 8y agoI wouldn't call it paid for by employers. It's a tax on your employer to employ you. It goes directly into the cost of your employment along with your salary and your benefits. If it weren't for this tax you could make more money. You are paying it just as much as you are paying "your half" of social security.
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- madeofpalk 8y agoEh, it's just a (relatively small, per employee) flat tax on each employee. That's like saying that having to buy a chair is a disincentive to hiring. In saying that, I tend to dislike 'special' taxes like these.
- lgbr 8y ago> That's like saying that having to buy a chair is a disincentive to hiring. Is that not a bad thing? A chair might be a bad comparison, because a chair is essential to workplace ergonomics and therefore the health of employees, but this tax has no direct benefit to the workplace. If our assumption is that hiring employees is one of the most important functions of our society, then shouldn't the barriers to hiring employees be kept as absolutely low as possible?
- robrenaud 8y ago> but this tax has no direct benefit to the workplace Which taxes do?
- CodeCube 8y agoSure they do ... they (ostensibly) go to paying for the infrastructure that supports that workplace: the roads and mass transit that leads from the worker's home to the workplace, the police and fire brigade that protect's the workplace's capital investments, etc. That's not to say that tax funds are always perfectly allocated ... of course they're not. But they're not worthless either.
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- sidrajaram 8y agoI think the point was that the chair viewed as a per-employee "tax" has benefit to the employer, but this head tax doesn't.
- 8y ago
- Simon_says 8y agoMaybe that was impossible because Washington State's constitution forbids an income tax?
- coldseattle 8y agoThere are specific laws against poll taxes. I suspect they knew they were in for a lengthy legal battle that they’d lose.
- barsonme 8y agoNo, that's just personal income tax. It doesn't affect B&O taxes.
- Simon_says 8y agoThat's kind of weird, right? If you're charging a percentage of wages, it doesn't make a difference if the employer or employee pays it.
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- jeffdavis 8y agoIt's easy to define the number of employees within the city. How do you define the revenue? Or do you mean global revenue?