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Seattle passes smaller ‘head tax’ on big companies after impassioned debate
- rdlecler1 8y agoA $21/month tax on each employee. Feels like Amazon could swallow this and might provide some incentive to hire outside the city core.
- drivingmenuts 8y agoLast I heard, they were shopping around to build a second Fortress of Dar^H^H^H^H^H^H^H^H^H ... ahem ... HQ. Might this be incentive to accelerate things a bit?
- akulbe 8y agoOne question comes to mind... I wonder if this will result in more companies allowing/encouraging remote work. Obviously, it won't work in every case. I just wonder if things like this will push companies more in that general direction.
- koheripbal 8y agoFor a company with multiple locations, they'll just shift jobs to the other locations. Working remotely has become very unfashionable in tech after many studies showed that remote employees are very inefficient.
- frenchie14 8y agoCitations, please :)
- skybrian 8y agoI haven't heard of these studies. Could you point to one of the best ones?
- akulbe 8y agoAs someone who has been working from home for the last 4 years, I couldn't disagree with you more. More real work, far fewer distractions, 5 second commute vs. 45-60 minutes each way. That's just for starters.
- lightedman 8y ago"Working remotely has become very unfashionable in tech after many studies showed that remote employees are very inefficient." Considering there was a story on the HN front page not even the other day showing exactly the opposite of what you're saying.....
- aioprisan 8y agoQuite the opposite: https://hbr.org/2017/11/a-study-of-1100-employees-found-that-remote-workers-feel-shunned-and-left-out https://hbr.org/2017/11/a-study-of-1100-employees-found-that... https://www.inc.com/farmers-insurance/do-these-3-things-to-foster-a-flexible-remote-work.html https://www.inc.com/farmers-insurance/do-these-3-things-to-f...
- taurath 8y agoIt sounds like a win-win to me. Seattle's housing prices come down and there's more prosperity elsewhere. The only reason everyone is so concentrated in Seattle or the Bay is that the companies insist that they must be there for the talent.
- megaman22 8y agoThis seems a little silly - it's an irritation, but it's not big enough to amount to anything really. If anything, it hurts lower-end positions more than any other, since it's a flat head tax. If you're counting the beans closely, it starts to make sense to hire 9 people with the salary you might have allotted to 10, and so forth. All this would really seem to do is piss off Amazon and Microsoft and the other big players, which is kind of cutting off your nose to spite your face.
- brandonbloom 8y ago$275/year comes out to a little more than a dollar per business day. With minimum wage being $15/hr in Seattle, this amounts to less than a 1% salary tax even in the maximal case. Making it vary with salary probably wouldn't have much if any impact.
- Scaevolus 8y agoMost Microsoft employees are in Redmond, which already has employee taxes at $106.90/yr, or $0.056/hr for part-time work: http://psbm.net/licenses-taxes/redmond.html http://psbm.net/licenses-taxes/redmond.html
- deleted 8y ago[deleted]
- rascul 8y agoIt certainly seems negligible, but it's still makes it more expensive to employ people. Seems like this kind of stuff helps raise the unemployment rate.
- chrismcb 8y agoIt only applies to companies that make $20 million a year. At that point, I don't think someone is going to say we won't an extra person because it's the tax. The $15 minimum wage but the companies a lot more. This is essentially thirteen cents an hour tax.
- pteredactyl 8y agoSad to watch SF and SEA be the cause of their own slow-motion downfall.
- akhilcacharya 8y agoWhere exactly do you expect business to go?
- matte_black 8y agoAway
- robrenaud 8y agoSomewhere that they get subsidies rather than taxes.
- beguiledfoil 8y agoMega cap tech companies need subsidies?
- maxerickson 8y agoIt's not a matter of need, it's a matter of them being able to get them.
- taurath 8y agoBut they have to stay in the bay/Seattle for the talent pool, by their own admission. I think the local government has a lot more power than they think. Which is wrong - the liberal livable areas attract talent, so companies flock to them, or the bottom line is more important so they should do it in a cheaper city? Seems like the former is winning by a mile in the past decade.
- darkengine 8y agoIn the case of Seattle, Kirkland and Bellevue are host to quite a few small and large tech companies already. The office space is plentiful and cheap on this side of Lake Washington, and there is less of a worry of being hit with poorly planned taxes and regulations that Seattle is, at this point, infamous for enacting. With the way the housing market is going, and the upcoming King County property tax hike, I wouldn't be surprised if tech workers started creeping out into Snohomish County and favoring jobs on the Eastside instead of Seattle due to traffic.
- matte_black 8y agoHow’re is this tax supposed to fix or ease homelessness? Several years ago, some friends were looking to purchase a starter home in Seattle, maybe for $250k or so. But they had such a killer deal on rent, they opted to wait a few more years, to save up more money. Well, in the next few years that dream quickly slipped through their fingers. Now you have to pay upwards of $500k just to get some as-is teardown that you’re not even allowed to look inside before you buy.
- helianer 8y agoWell, taxing something means you’ll usually get less of it, so I guess it’ll reduce demand on housing (probably not what they want since it hurts the economy in other ways). If the money goes to building for those in need it could help a bit. The only thing that will really help over the long term is building even more apartments.
- propman 8y agoI'm fiscally conservative and I don't mind the tax, it's just very poorly planned. $20M in revenue for businesses is not much. It's a regressive tax, and it is appropriated to homelessness which the city has done a very poor job of dealing with. Money will no doubt be wasted. I do support a more fair tax in Bay Area that goes directly to transportation and infrastructure improvement
- foota 8y agoIt's only regressive if lower-sh income workers are impacted by the changes, and I'm not sure this will be the case since wages are in theory derived from the labor market, and this tax will only affect a minority of jobs.
- NotSammyHagar 8y agoSince we can't do income taxes in washington state, we can't make it a perfect tax, which would be to tax rich software engineers more, and say construction workers and baristas not at all. this tax would be better that way. They try to limit it to people working at big companies. I think they should do something like make it only for people making 100k or something. But would that tip it over into an income based tax, probably? So what's your idea for how to raise money to deal with homeless people. My idea is copy what worked in Utah, which is start with building tons of housing, enough for all the homeless people.
- stuntkite 8y agoI agree that this tax probably won't fix the homelessness problem. Whatever has happened to Seattle is much deeper then just homelessness. Amazon and the like have ravaged the city of it's ability to provide functional housing even to service and support workers. I know this is happening in every city, but it's very pronounced in Seattle. The city shuts down at 9PM because no one lives there and then the homeless spill over into the empty well scrubbed streets. It's soul has been sucked out and been replaced with techno culture. A weird head tax is a reasonable ding for an exasperated set of natives, but someone has to find a way to balance these concerns. Or not... I shudder to think of what the bay, Seattle, Austin, Denver, Boston, etc are going to become without all the people that make up a city that aren't just there to get their next rung up on the way to be CTO for their own gig app.
- seibelj 8y agoBoston has a very active night life scene, as does Austin and SF... not sure why you think these are ghost towns at night
- lovich 8y agoEh, Boston is pretty dead by midnight, but there's not much open other than bars. I lived out in the country and had a 24 hour pharmacy and supermarket right next to each other but I never something like that in Boston proper
- stuntkite 8y agoNot quite what I meant. Sorry, I wasn't clear. I mean places that price out culture for the tech scenes have some complicated issues with growth right now.
- foolfoolz 8y ago> City of Seattle revenues have grown dramatically from $2.8B in 2010 to $4.2B in 2017, and they will be even higher in 2018. This revenue increase far outpaces the Seattle population increase over the same time period. The city does not have a revenue problem – it has a spending efficiency problem
- jwilliams 8y agoThat quote (from Amazon representatives) implies that revenue is non-linear to population -- but that expenses should be linear. I don't buy into that view. Especially in a "boom".
- taurath 8y agoMeanwhile real estate prices have gone up 2-300% in the same timeframe, and they are building light rail to deal with the gridlock.
- adrianpike 8y agoVery slowly for many parts of the city - Ballard is looking at a 2030+ timeline to get a light rail expansion. That said, it's better than nothing!
- chibg10 8y agoThe expense-to-marginal-population curve shouldn't even be linear--it should be logarithmic. As a city grows, you would expect it to get better at accommodating population increases (by reforming regulation and from investment flowing into local infrastructure projects and making the building process more efficient, as well as workers gaining experience in building the projects).
- jwilliams 8y agoAssuming all other variables stay the same -- with such a large revenue increase you'd assume some would be changing substantially.
- ryanmarsh 8y agoShame on Amazon for hiring so many people in the Seattle area with good paying jobs. How dare people blame the poor and beleaguered city government for not solving the city’s mental health problem. Record tax revenues? It’s still not enough. Seriously though, isn’t this the deal? Business brings in good paying jobs and pays taxes, city lays down the infrastructure to support commerce. With record tax revenues the city government isn’t holding up their end of the bargain.
- NotSammyHagar 8y agoJust noting that Seattle has record revenues, is notenough information to understand if Seattle is doing a good job with it's tax revenue. There are more people moving here all the time, so revenue will just go up (like for say sales taxes). It's like saying the government always does a bad job, so the govt. shouldn't do anything - that's just a general statement that doesn't clarify anything. In this case, let's look at the costs and infrastructure the city is facing and the number of people it has to deal with and try to understand if the city's doing a good job or not. I haven't actually read anything that did a good analysis of that.
- deleted 8y ago[deleted]
- mrep 8y agoI'm not really against the tax but its use. Spending more money on the homeless giving them handouts is only going to attract more worsening the problem. I think the homeless problem should be tackled on a federal level since it is easy for them to move states but not countries. Thus, any non-federal government that spends tax revenue to help the homeless will likely just attract more homeless people from other areas worsening the local populations lives through the negative externalities and the costs which only reduce other local governments homeless expenses.
- NotSammyHagar 8y agoIf that were true that we are making it too easy to live here in Seattle, then consider Utah, which basically has provided housing for all homeless people. They have not been swarmed with everyone moving there. I have noticed this has not happened in Seattle :-)
- mc32 8y agoSo let me see if I understand this. Companies hire people, they become successful and make their employeees successful (at least their non warehouse, non call center employees) making the city and population at large successful; growing the economy. For that good they get taxed more? It’s no wonder AMZ for one is looking for an HQ2 location. I know it makes people feel good, but honestly, the only answer to homelessness is a federal approach. Piecemeal approaches tend to attract people to homeless friendly places creating a positive feedback loop. Why not go the whole hog and institute an “automation tax”. Tax companies for every job they automate which leads to an unemployed willing worker, avoiding the creation of a homeless pop. This would be less ridiculous.
- NotSammyHagar 8y agoThere's not a good way to get more revenue to cover the infrastructure needed as companies hire more employees. We don't have income taxes here. If we did, as you hire an employee you'd get more revenue to cover the fractional cost of bus service, etc. A head tax is a way to do that. Are you against income taxes? They could accomplish the same thing.
- whb07 8y agoFlorida and Texas do not have income tax and yet they appear to not suffer from the same ailments that the city of Seattle and SF are suffering from. In a couple of years the city council will move to raise the head tax, stating that their new record tax receipts are not enough to implement their working solution. It is easy to spend money that isn't yours. The city of Seattle has had record tax receipts for the past couple of years and yet they somehow are always "short" on money.
- NotSammyHagar 8y agoSaying Seattle has record revenue is just a completely misleading thing to say, without enough information. Your comment doesn't clarify anything about whether Seattle is spending money poorly or wisely. Seattle's costs have been going up, partly because lots more people have been moving here, and we don't have income taxes, and businesses can hire more people without that leading to increased tax revenue. The city has to build more infrastructure to handle us (roads, transit, bike lanes, tunnels). There's no clear match between infrastructure needs and revenue.
- spacehome 8y agoNote that "help the homeless" and "reduce homelessness" are two different goals and they are often at odds with each other.
- jeffbax 8y agoThe amount of dumb things I hear coming out of Seattle lately blows my mind. Every other city that wears it's "progressive"-ness on its sleeve should take a wait and see approach to what Seattle does, so that when these terrible policies do nothing to fix their problems and exacerbate others (like blaming tech companies for housing shortages in SF) they can hopefully avoid it.
- gremlinsinc 8y agoWhy not tie this to CEO pay... whatever multiplier the CEO earns (including bonuses) above average workers is what they pay, so say it's 400x they'd pay 400 per head, if it's 200 they'd pay 200... Then the company just needs to pay 1 worker less money to keep more for the business itself and shareholders/etc... Or the business could pay workers more to lower that 400:1 ratio.