3 ms·

Seattle City Council passes JumpStart tax on high salaries paid by big business

• loeg 6y ago
  This is sort of a municipal income tax with a zero percent bracket up to $150k (per individual); the analogy breaks down in that spousal income isn't considered at all, and the tax rate on employee income is scaled by +0-0.7% depending on the size of the business' payroll, which is a bit odd. This complicated machination is likely intended to work around Washington state law, which forbids income taxes broadly. Smaller businesses (under $7m payroll) are exempted. Additionally, some employers of highly compensated workers (i.e., Doctors) are exempted. The brackets are: $7-100 million payroll: 0.7% $150-400k; 1.7% 400k+. $100-$1 billion payroll: 0.7% $150-400k; 1.9% 400k+. And >$1 billion payroll: 1.4% $150-400k, 2.4% 400k+. (That's got to be targeted at just Amazon, I think? 5000 heads x $200k gets you to $1B, and 5k is like half the SWEs in Seattle.) I don't yet know if those brackets are set to track inflation at all. It's unclear to me if a company could simply form a bunch of subsidiary LLCs to pay smaller lots of employees to get a lower tax rate.