5 ms·

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

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.
- donavanm 6y ago
  I have no idea what you're responding to. As Ive stated this is a PAYROLL tax, NOT a personal income tax, so I dont know where a W-2 would come in to it. A payroll tax, like B&O taxes, are paid directly by the business. 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. Secondly you appear to be objecting to the opinions & phrases of a random opinion piece writer who's positioning this as "tax on the rich." That's fine, and the columnists obvious slant is pretty silly IMO, but I dont know why it's relevant to my comment about the distinction between income and payroll.
  - topkai22 6y ago
    The most common payroll taxes (social security and Medicare) are paid jointly by the employer and employee. Just saying “it’s a payroll tax” does not imply it went won’t show up on a W2 or be paid by the employee.
    - donavanm 6y ago
      Fair enough. There is a meaningful difference in taxes based on payroll vs the individuals net income. And that's not exactly germane to this article or thread. I should have been even more explicit in saying this is a payroll expense tax. The authors are very explicit that this is tax on the business and not any sort of tax born by the employee: > 5.45.090.S “Payroll expense” means the compensation paid in Seattle to employees. > 5.38.030.B The amount of the payroll expense tax due shall be the payroll expense of the business ... multiplied by the following rates: > 5.38.030.C The tax imposed by this Chapter 5.38 is levied on businesses. A business may not make any deductions from employees’ compensation to pay for this tax. > 5.38.090 ... taxes shall be levied upon, and collectible from, the person engaging in the business activities herein designated and that such taxes or fees shall constitute a part of the operating overhead or cost of doing business of such persons. And this all matters because as soon as it looks like a non uniform property tax (ie a graduated income tax) it's prempted by WA state constitution Article VII Section 1.
  - hammock 6y ago
    B&O tax is levied on gross receipts; this "boss tax" is a payroll tax, levied on worker's compensation. Whether or not it is shown on a worker's paycheck as a withheld amount or not has little bearing on its general effect of depressing wages that employers are willing and able to pay to employees. My point was that this tax will tend depress real wages - which have been stagnant since the 70's - and which are the primary mode of income for many working classes - while having little effect on a much richer set of people (such as the "CEO" in "CEO tax") who derive their livelihood from business and investment income moreso than wages or compensation.
gentleman11 6y ago
Doesn’t this just make it harder for seats companies to compete with corps in other areas? It will just drive down salaries a bit in general, probably the most in the lower paid employees because they are more replaceable
- donavanm 6y ago
  Yes, that is the general objection to taxes that are directly aligned to workers. "Taxing jobs" leads to those jobs going to other jurisdictions (like Redmond or Bellevue) where possible. I think they're hedging against this by attempting to cover any business in Seattle and levying the payroll tax on any employees who works or lives in Seattle city limits. See section 5.45.090.S. I just skimmed the legislation but two relevant points for you are they've explicitly exempted a few business with classically high revenue and low margins, like grocery stores. The tax itself is also levied on employee payroll expenses starting at $150,000 when hte cities median income is about $65,000 last I looked. See section 5.38.030.
deleted 6y ago
[deleted]
zxcmx 6y ago
Seems to me this is really not as strong as an income tax. The rich do not get their money selling hours to a company. It should be called a "well compensated worker tax".

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.
donavanm 6y ago
I have no idea what you're responding to. As Ive stated this is a PAYROLL tax, NOT a personal income tax, so I dont know where a W-2 would come in to it. A payroll tax, like B&O taxes, are paid directly by the business. 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. Secondly you appear to be objecting to the opinions & phrases of a random opinion piece writer who's positioning this as "tax on the rich." That's fine, and the columnists obvious slant is pretty silly IMO, but I dont know why it's relevant to my comment about the distinction between income and payroll.
- topkai22 6y ago
  The most common payroll taxes (social security and Medicare) are paid jointly by the employer and employee. Just saying “it’s a payroll tax” does not imply it went won’t show up on a W2 or be paid by the employee.
  - donavanm 6y ago
    Fair enough. There is a meaningful difference in taxes based on payroll vs the individuals net income. And that's not exactly germane to this article or thread. I should have been even more explicit in saying this is a payroll expense tax. The authors are very explicit that this is tax on the business and not any sort of tax born by the employee: > 5.45.090.S “Payroll expense” means the compensation paid in Seattle to employees. > 5.38.030.B The amount of the payroll expense tax due shall be the payroll expense of the business ... multiplied by the following rates: > 5.38.030.C The tax imposed by this Chapter 5.38 is levied on businesses. A business may not make any deductions from employees’ compensation to pay for this tax. > 5.38.090 ... taxes shall be levied upon, and collectible from, the person engaging in the business activities herein designated and that such taxes or fees shall constitute a part of the operating overhead or cost of doing business of such persons. And this all matters because as soon as it looks like a non uniform property tax (ie a graduated income tax) it's prempted by WA state constitution Article VII Section 1.
- hammock 6y ago
  B&O tax is levied on gross receipts; this "boss tax" is a payroll tax, levied on worker's compensation. Whether or not it is shown on a worker's paycheck as a withheld amount or not has little bearing on its general effect of depressing wages that employers are willing and able to pay to employees. My point was that this tax will tend depress real wages - which have been stagnant since the 70's - and which are the primary mode of income for many working classes - while having little effect on a much richer set of people (such as the "CEO" in "CEO tax") who derive their livelihood from business and investment income moreso than wages or compensation.

gentleman11 6y ago

Doesn’t this just make it harder for seats companies to compete with corps in other areas? It will just drive down salaries a bit in general, probably the most in the lower paid employees because they are more replaceable

donavanm 6y ago
Yes, that is the general objection to taxes that are directly aligned to workers. "Taxing jobs" leads to those jobs going to other jurisdictions (like Redmond or Bellevue) where possible. I think they're hedging against this by attempting to cover any business in Seattle and levying the payroll tax on any employees who works or lives in Seattle city limits. See section 5.45.090.S. I just skimmed the legislation but two relevant points for you are they've explicitly exempted a few business with classically high revenue and low margins, like grocery stores. The tax itself is also levied on employee payroll expenses starting at $150,000 when hte cities median income is about $65,000 last I looked. See section 5.38.030.

deleted 6y ago

[deleted]

zxcmx 6y ago

Seems to me this is really not as strong as an income tax. The rich do not get their money selling hours to a company. It should be called a "well compensated worker tax".