7 ms·

Call it the ‘boss tax:’ Seattle finally finds a potent way to tax the rich

39 points by wallflower 6y ago

quotz 6y ago
Finally more communism woohoo exciting. It feels great to steal from people
- ViViDboarder 6y ago
  Steal? I feel this differs from stealing fairly significantly. Do you consider Amazon (or others) as having stolen from the public for any tax breaks they got?
  - pmiller2 6y ago
    I don’t think GP is replying in good faith. Taxes are not theft, and taxing wealthy people more than less wealthy people is not communism.
    - effingwewt 6y ago
      I have pretty well off family members, and I hear this rhetoric constantly. Any attempt to tax them is 'theft', any taxes and social programs also fall under 'communism'. I spent years trying to find common ground, bring the discourse to facts instead of emotion, I had to give up after coronavirus. The constant crying and hypocrisy has gotten so bad as of late I've had to completely stop going to that side of my family's functions (pre covid) and remove a lot of them from social media (post covid). Its like any attack against an idea is seen as a personal attack, or becomes one.
- dang 6y ago
  Please don't post unsubstantive and/or flamebait comments to HN. We're trying for a bit better than that here. https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
saltedonion 6y ago
I suspect that the tax will actually be born by the corps. They would still need to pay their employees competitively to attract talent, so the only option this have is to boost pay proportionally to the tax.
- tedunangst 6y ago
  Well, the law specifies it's paid by the corporation and may not be deducted from employee salary...
  - bryan_w 6y ago
    They can say that, but money is fungible. If operating expenses go up, then raises/bonuses go down.
- pmiller2 6y ago
  I’m not entirely sure about that. The highest rate they’re talking about is 2.4%. Would you switch jobs or choose one job over another because of a 2.4% difference in comp, all else being equal?
randyrand 6y ago
I thought Washington has a state law against income taxes? Isn’t this an income tax?
- DaiPlusPlus 6y ago
  It’s complicated. I understand the WA state constitution prohibits non-uniform taxation (i.e. progressive taxation) which is the only real workable basis for income tax. So all attempts to introduce any form of income tax tend to be proposals for a flat 0-2% tax, with those legislative bills failing because they wouldn’t bring sufficient revenue to justify the significant overheads, such as setting up a tax system in the first place, and enforcement. It’s a big problem with local/city-based taxes as Seattle itself is very small (700k people in a few square-miles): it would be no problem for a wannabe tax-avoider to move 10 minutes away to Shoreline, Bellevue, Medina, etc. Even if it was done at the county level, Seattle’s location in King County is too close to the border with Snohimish County. Lots of people and businesses priced out of Seattle are relocating to Everett anyway.
hedora 6y ago
Tl;dr: progressive 2.4% income tax phasing in from $150K-$400K So, not so much a “boss tax” as it is a “rank and file” tax in big tech companies. If this were a boss tax, it would be 24% phased in linearly from $150K to $4M. Also, Washington doesn’t have an income tax, so the top bracket would still be paying less than people that make much less pay in California...
- tedunangst 6y ago
  It doesn't really phase in. It steps in with discrete jumps.
- donavanm 6y ago
  Its not an income tax, its introduced as a business tax on payroll. This is important as the WA state constitution prohibits non uniform taxation. This is what has preempted most of the previous passion based “tax the rich” schemes in Seattle. Edit: A further clarification. A payroll tax, like B&O taxes, are paid directly by the business. They are not paid by the individual. This is a very important distinction because this tax would (presumably) be applied in the same manner to all business operating in the city of Seattle. It would not be a variable tax across individuals themselves.
  - hammock 6y ago
    More W-2 taxes, great... How does this tax the rich again? The idea of calling this "the CEO tax" expresses an ignorance of the type of income making up a majority of CEO pay. Likewise calling it a "pro athlete tax" works for Mariners and Seahawks but no so much for tennis and golf pros. What this tax does is further suppress wage growth for a working class while sidestepping the wealth and income sources of much richer people.
    - floatingatoll 6y ago
      The business is taxed, not the employees. Nothing new would appear on the individual W-2 forms issued by the business.
    - 6y ago
throwawaysea 6y ago
This is yet another illegal tax (in the state of WA) that Seattle’s inept, socialist council is trying to push through. Attempts at enacting this tax have failed before because it is hugely unpopular, especially in the business community. It is primarily the work of Kshama Sawant (not Mosqueda as the article claims, who has basically revised a prior similar plan from Sawant). Sawant is an extremist council member who is part of an organization known as Socialist Alternative. The tax is so blatantly targeted at Amazon through its various rules and exemptions, that Sawant herself calls it “the Amazon tax”. The reason the tax may be pushed through now is because Seattle faces a huge budget shortfall after years of fast growing spending. Instead of trimming the fat, their solution is more taxes. My guess is the council members supporting this hope to invite legal challenge so that an activist judge can rule in their favor despite the state constitution preventing graduated income taxes. My hope is that Amazon just declares all their tech workers remote and moves out of Seattle. If you’re new to how these socialist organizations think, check out their self-avowed plan to infiltrate BLM early and leverage its cause for their own Marxist ends (https://www.socialistalternative.org/marxism-fight-black-freedom/black-lives-matter-marxism/ https://www.socialistalternative.org/marxism-fight-black-fre...). They have a mentality to implement their ideology at its fullest with no compromise, and that is definitely the case with this proposed tax, given its repeated unpopularity here. If you’re curious about Kshama Sawant specifically, check out her tweet from July 4th (https://mobile.twitter.com/cmkshama/status/1279523937844555777 https://mobile.twitter.com/cmkshama/status/12795239378445557...): > "I've no respect for the stars & stripes, or any other flag symbolizing slavery. Triumphant socialism will haul down that flag & every other that symbolizes capitalist class rule & wage slavery. I'm a patriot, but in the sense that I love all countries."
- blahblahblogger 6y ago
  > If you’re new to how these socialist organizations think, check out their self-avowed plan to infiltrate BLM early and leverage its cause for their own Marxist ends... They have a mentality to implement their ideology at its fullest with no compromise They don't need to, they're pretty open about it, see here just today: https://www.reddit.com/r/ActualPublicFreakouts/comments/hlujr9/wtf_yes_communism_is_the_answers/ https://www.reddit.com/r/ActualPublicFreakouts/comments/hluj...
ryanwaggoner 6y ago
So even more tax burden on earned income from the upper middle class, rather than taxing capital gains or wealth from the truly rich.
josephby 6y ago
Credit for creativity but my hunch is the only people who will get money out of this are tax lawyers
supernova87a 6y ago
Two questions (related to each other): 1) Why don't they just make it an even further graduated tax going all the way up the billionaires? Instead of having to spread a 2.4% tax on everyone, why not make it start at 1% and go up to 10% for billionaires, raising the same amount of money? Save us all some tax and boo hoo, the billionaires have to pay a little more. 2) What sets the limit of what % a city can tax? I.e. what would stop a city from imposing a 50% tax on billionaires? Just what the public wants to stomach? Or is there a legal limit?
- deleted 6y ago
  [deleted]
- apsec112 6y ago
  There aren't really legal limits on what taxes a US state can enact; an individual city may or may not be constrained by the state that it's inside of (eg., California cities can't raise taxes without a 2/3rds vote under Prop 13). In this case, the real constraints are Washington state law (prohibiting income taxes), and what voters/residents will stand for. A city that put a 90% tax on billionaires would find that they all left pretty quickly.
  - blahblahblogger 6y ago
    > A city that put a 90% tax on billionaires would find that they all left pretty quickly. That's kind of hyperbole given the OP said "up to 10%". But aside from that, don't a lot of billionaires (steve jobs, bill gates, etc) only pay themselves a $0 salary when they're rich and own their own company where they're paid in stock? So any % of $0 is still 0.
    - donavanm 6y ago
      > they're paid in stock? In the US RSU grants are treated as income. They literally show up on the W2 for the full value of the grant.
      - 6y ago
rayiner 6y ago
How about we actually fix our revenue problems and adopt a VAT? https://www.taxpolicycenter.org/briefing-book/what-vat https://www.taxpolicycenter.org/briefing-book/what-vat > The value-added tax (VAT) is the world’s most common form of consumption tax, in place in more than 160 countries, including every economically advanced nation except the United States. It’s absurd that we faff around trying gimmicks instead of using proven tools in use almost everywhere else.
- donw 6y ago
  First, because VATs are regressive. Imagine Alice has an income of, say, USD 50k. She's going to spend a big chunk of that on goods and services: housing, food, etc. Bob, on the other hand, makes USD 500k. He spends maybe twice as much as Alice does -- nicer house, flash car, all that. Bob can save and invest far more than Alice with a VAT. Second, because our governance problems are not because of a lack of money. The US has horrible schooling, in spite of being the 4th-highest spender on secondary education in the world, yet we rank in the same cohort as Latvia. I promise you they don't spend like we do on education. The US has a cultural problem. Part of which is throwing money at problems without actually fixing them.
  - alejohausner 6y ago
    Canada has federal and provincial VATs. They are not regressive, because low income people get a tax refund, quarterly. VATs are good.
    - donw 6y ago
      If we replaced existing taxes with VATs, and did a prebate (e.g., Yang's proposal), that'd be a lot more palatable. Although I'd be curious what this would do to housing prices -- e.g., if you buy a house, is a VAT applied to your purchase price?
      - tptacek 6y ago
        Countries with VATs seem to tend to exempt residential real estate.
donavanm 6y ago
The linked article is a columnist opinion piece. The same newspaper has an actual article https://www.seattletimes.com/seattle-news/politics/seattle-city-council-votes-in-committee-to-advance-new-tax-on-big-businesses/ https://www.seattletimes.com/seattle-news/politics/seattle-c... from last week. And heres a link to the actual legislation http://seattle.legistar.com/LegislationDetail.aspx?ID=4576785&GUID=B501D452-6F8F-4F78-9376-1F28E713A43B http://seattle.legistar.com/LegislationDetail.aspx?ID=457678...
deleted 6y ago
[deleted]
- deleted 6y ago
  [deleted]
eucryphia 6y ago
Corporations don't pay taxes, people do. A corporate tax is shared between workers, investors and customers, the latter two can just walk away. High marginal tax rates redistributes people, not money.

39 points by wallflower 6y ago

quotz 6y ago

Finally more communism woohoo exciting. It feels great to steal from people

ViViDboarder 6y ago
Steal? I feel this differs from stealing fairly significantly. Do you consider Amazon (or others) as having stolen from the public for any tax breaks they got?
- pmiller2 6y ago
  I don’t think GP is replying in good faith. Taxes are not theft, and taxing wealthy people more than less wealthy people is not communism.
  - effingwewt 6y ago
    I have pretty well off family members, and I hear this rhetoric constantly. Any attempt to tax them is 'theft', any taxes and social programs also fall under 'communism'. I spent years trying to find common ground, bring the discourse to facts instead of emotion, I had to give up after coronavirus. The constant crying and hypocrisy has gotten so bad as of late I've had to completely stop going to that side of my family's functions (pre covid) and remove a lot of them from social media (post covid). Its like any attack against an idea is seen as a personal attack, or becomes one.
dang 6y ago
Please don't post unsubstantive and/or flamebait comments to HN. We're trying for a bit better than that here. https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

saltedonion 6y ago

I suspect that the tax will actually be born by the corps. They would still need to pay their employees competitively to attract talent, so the only option this have is to boost pay proportionally to the tax.

tedunangst 6y ago
Well, the law specifies it's paid by the corporation and may not be deducted from employee salary...
- bryan_w 6y ago
  They can say that, but money is fungible. If operating expenses go up, then raises/bonuses go down.
pmiller2 6y ago
I’m not entirely sure about that. The highest rate they’re talking about is 2.4%. Would you switch jobs or choose one job over another because of a 2.4% difference in comp, all else being equal?

randyrand 6y ago

I thought Washington has a state law against income taxes? Isn’t this an income tax?

DaiPlusPlus 6y ago
It’s complicated. I understand the WA state constitution prohibits non-uniform taxation (i.e. progressive taxation) which is the only real workable basis for income tax. So all attempts to introduce any form of income tax tend to be proposals for a flat 0-2% tax, with those legislative bills failing because they wouldn’t bring sufficient revenue to justify the significant overheads, such as setting up a tax system in the first place, and enforcement. It’s a big problem with local/city-based taxes as Seattle itself is very small (700k people in a few square-miles): it would be no problem for a wannabe tax-avoider to move 10 minutes away to Shoreline, Bellevue, Medina, etc. Even if it was done at the county level, Seattle’s location in King County is too close to the border with Snohimish County. Lots of people and businesses priced out of Seattle are relocating to Everett anyway.

hedora 6y ago

Tl;dr: progressive 2.4% income tax phasing in from $150K-$400K So, not so much a “boss tax” as it is a “rank and file” tax in big tech companies. If this were a boss tax, it would be 24% phased in linearly from $150K to $4M. Also, Washington doesn’t have an income tax, so the top bracket would still be paying less than people that make much less pay in California...

tedunangst 6y ago
It doesn't really phase in. It steps in with discrete jumps.
donavanm 6y ago
Its not an income tax, its introduced as a business tax on payroll. This is important as the WA state constitution prohibits non uniform taxation. This is what has preempted most of the previous passion based “tax the rich” schemes in Seattle. Edit: A further clarification. A payroll tax, like B&O taxes, are paid directly by the business. They are not paid by the individual. This is a very important distinction because this tax would (presumably) be applied in the same manner to all business operating in the city of Seattle. It would not be a variable tax across individuals themselves.
- hammock 6y ago
  More W-2 taxes, great... How does this tax the rich again? The idea of calling this "the CEO tax" expresses an ignorance of the type of income making up a majority of CEO pay. Likewise calling it a "pro athlete tax" works for Mariners and Seahawks but no so much for tennis and golf pros. What this tax does is further suppress wage growth for a working class while sidestepping the wealth and income sources of much richer people.
  - floatingatoll 6y ago
    The business is taxed, not the employees. Nothing new would appear on the individual W-2 forms issued by the business.
  - 6y ago

throwawaysea 6y ago

This is yet another illegal tax (in the state of WA) that Seattle’s inept, socialist council is trying to push through. Attempts at enacting this tax have failed before because it is hugely unpopular, especially in the business community. It is primarily the work of Kshama Sawant (not Mosqueda as the article claims, who has basically revised a prior similar plan from Sawant). Sawant is an extremist council member who is part of an organization known as Socialist Alternative. The tax is so blatantly targeted at Amazon through its various rules and exemptions, that Sawant herself calls it “the Amazon tax”. The reason the tax may be pushed through now is because Seattle faces a huge budget shortfall after years of fast growing spending. Instead of trimming the fat, their solution is more taxes. My guess is the council members supporting this hope to invite legal challenge so that an activist judge can rule in their favor despite the state constitution preventing graduated income taxes. My hope is that Amazon just declares all their tech workers remote and moves out of Seattle. If you’re new to how these socialist organizations think, check out their self-avowed plan to infiltrate BLM early and leverage its cause for their own Marxist ends (https://www.socialistalternative.org/marxism-fight-black-freedom/black-lives-matter-marxism/ https://www.socialistalternative.org/marxism-fight-black-fre...). They have a mentality to implement their ideology at its fullest with no compromise, and that is definitely the case with this proposed tax, given its repeated unpopularity here. If you’re curious about Kshama Sawant specifically, check out her tweet from July 4th (https://mobile.twitter.com/cmkshama/status/1279523937844555777 https://mobile.twitter.com/cmkshama/status/12795239378445557...): > "I've no respect for the stars & stripes, or any other flag symbolizing slavery. Triumphant socialism will haul down that flag & every other that symbolizes capitalist class rule & wage slavery. I'm a patriot, but in the sense that I love all countries."

blahblahblogger 6y ago
> If you’re new to how these socialist organizations think, check out their self-avowed plan to infiltrate BLM early and leverage its cause for their own Marxist ends... They have a mentality to implement their ideology at its fullest with no compromise They don't need to, they're pretty open about it, see here just today: https://www.reddit.com/r/ActualPublicFreakouts/comments/hlujr9/wtf_yes_communism_is_the_answers/ https://www.reddit.com/r/ActualPublicFreakouts/comments/hluj...

ryanwaggoner 6y ago

So even more tax burden on earned income from the upper middle class, rather than taxing capital gains or wealth from the truly rich.

josephby 6y ago

Credit for creativity but my hunch is the only people who will get money out of this are tax lawyers

supernova87a 6y ago

Two questions (related to each other): 1) Why don't they just make it an even further graduated tax going all the way up the billionaires? Instead of having to spread a 2.4% tax on everyone, why not make it start at 1% and go up to 10% for billionaires, raising the same amount of money? Save us all some tax and boo hoo, the billionaires have to pay a little more. 2) What sets the limit of what % a city can tax? I.e. what would stop a city from imposing a 50% tax on billionaires? Just what the public wants to stomach? Or is there a legal limit?

deleted 6y ago
[deleted]
apsec112 6y ago
There aren't really legal limits on what taxes a US state can enact; an individual city may or may not be constrained by the state that it's inside of (eg., California cities can't raise taxes without a 2/3rds vote under Prop 13). In this case, the real constraints are Washington state law (prohibiting income taxes), and what voters/residents will stand for. A city that put a 90% tax on billionaires would find that they all left pretty quickly.
- blahblahblogger 6y ago
  > A city that put a 90% tax on billionaires would find that they all left pretty quickly. That's kind of hyperbole given the OP said "up to 10%". But aside from that, don't a lot of billionaires (steve jobs, bill gates, etc) only pay themselves a $0 salary when they're rich and own their own company where they're paid in stock? So any % of $0 is still 0.
  - donavanm 6y ago
    > they're paid in stock? In the US RSU grants are treated as income. They literally show up on the W2 for the full value of the grant.
    - 6y ago

rayiner 6y ago

How about we actually fix our revenue problems and adopt a VAT? https://www.taxpolicycenter.org/briefing-book/what-vat https://www.taxpolicycenter.org/briefing-book/what-vat > The value-added tax (VAT) is the world’s most common form of consumption tax, in place in more than 160 countries, including every economically advanced nation except the United States. It’s absurd that we faff around trying gimmicks instead of using proven tools in use almost everywhere else.

donw 6y ago
First, because VATs are regressive. Imagine Alice has an income of, say, USD 50k. She's going to spend a big chunk of that on goods and services: housing, food, etc. Bob, on the other hand, makes USD 500k. He spends maybe twice as much as Alice does -- nicer house, flash car, all that. Bob can save and invest far more than Alice with a VAT. Second, because our governance problems are not because of a lack of money. The US has horrible schooling, in spite of being the 4th-highest spender on secondary education in the world, yet we rank in the same cohort as Latvia. I promise you they don't spend like we do on education. The US has a cultural problem. Part of which is throwing money at problems without actually fixing them.
- alejohausner 6y ago
  Canada has federal and provincial VATs. They are not regressive, because low income people get a tax refund, quarterly. VATs are good.
  - donw 6y ago
    If we replaced existing taxes with VATs, and did a prebate (e.g., Yang's proposal), that'd be a lot more palatable. Although I'd be curious what this would do to housing prices -- e.g., if you buy a house, is a VAT applied to your purchase price?
    - tptacek 6y ago
      Countries with VATs seem to tend to exempt residential real estate.

donavanm 6y ago

The linked article is a columnist opinion piece. The same newspaper has an actual article https://www.seattletimes.com/seattle-news/politics/seattle-city-council-votes-in-committee-to-advance-new-tax-on-big-businesses/ https://www.seattletimes.com/seattle-news/politics/seattle-c... from last week. And heres a link to the actual legislation http://seattle.legistar.com/LegislationDetail.aspx?ID=4576785&GUID=B501D452-6F8F-4F78-9376-1F28E713A43B http://seattle.legistar.com/LegislationDetail.aspx?ID=457678...

deleted 6y ago

[deleted]

deleted 6y ago
[deleted]

eucryphia 6y ago

Corporations don't pay taxes, people do. A corporate tax is shared between workers, investors and customers, the latter two can just walk away. High marginal tax rates redistributes people, not money.