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  #21  
Old Posted May 15, 2018, 4:53 PM
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Originally Posted by Khantilever View Post
This is a bizarre approach you’re taking. The question is not whether it will wreck the economy. The question is whether it is good public policy. Imposing a flat tax on workers on the basis of their employers’ size is nonsensical. That the local economy is booming doesn’t mean it isn’t a harmful policy; it just means that the negative effects may be masked in the short-term.
It’s also regressive. The tax is a rounding error for highly-paid employees, but companies will look for ways to shift low wage jobs out of the city.
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  #22  
Old Posted May 15, 2018, 4:58 PM
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  #23  
Old Posted May 15, 2018, 5:07 PM
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Originally Posted by Khantilever View Post
This is a bizarre approach you’re taking. The question is not whether it will wreck the economy. The question is whether it is good public policy.
Odd response. The question of whether or not it's good policy is largely answered by the potential economic effects. Given the potential economic effects are likely minimal, it appears, at face value, to make sense from a public policy perspective.
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Originally Posted by Khantilever View Post
Imposing a flat tax on workers on the basis of their employers’ size is nonsensical.
Why? How is it any less arbitrary than any other taxing scheme, and what's your preferred alternative (city and state income taxes aren't allowed in Washington, BTW).

Seattle is booming (and has resulting affordability challenges) largely because of a few large, extremely prosperous employers. Makes sense to look to them first, given that broader schemes like income taxes aren't allowed.
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Originally Posted by Khantilever View Post
T
That the local economy is booming doesn’t mean it isn’t a harmful policy; it just means that the negative effects may be masked in the short-term.
Sounds good to me, then. If the negative effects are masked, that sounds like a pretty ideal taxation scheme, given tax policy is inherently political and someone needs to pay.
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  #24  
Old Posted May 15, 2018, 5:09 PM
mhays mhays is online now
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The cumulative effect of various development fees, employment policies, the head tax, etc., are probably a big part of HQ2 and so on. I'd say the effects are substantial.
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  #25  
Old Posted May 15, 2018, 5:11 PM
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Originally Posted by Sun Belt View Post
According to the Amazon spokesman: Seattle doesn't have a revenue problem. Since 2010, their budget has grown by $1.5 billion to 4.2 billion and higher than that for 2018.
And Amazon made $1.9 Billion in profit in the last 3 months of 2017 alone! I don't want to hear that they 'can't afford' this. I am more sympathetic to smaller businesses, and it does seem like a city income tax would make more sense than a headcount tax.
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  #26  
Old Posted May 15, 2018, 5:24 PM
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They could slightly increase their online selling fees or something.
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  #27  
Old Posted May 15, 2018, 5:39 PM
Vlajos Vlajos is offline
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Originally Posted by 10023 View Post
A direct tax on headcount is asking for trouble. Why not a city income tax like NYC?
Yeah, I agree. Washington has no income tax though. I wonder if the state's constitution would need to be amended to allow Seattle to institute a city wide income tax.

Chicago did away with its downtown head tax when Rahm became Mayor. Downtown employment has exploded to the highest ever on record since then. Not all can be attributed to the elimination of the head tax, but I'm sure it helped.
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  #28  
Old Posted May 15, 2018, 6:11 PM
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Originally Posted by Crawford View Post
Odd response. The question of whether or not it's good policy is largely answered by the potential economic effects. Given the potential economic effects are likely minimal, it appears, at face value, to make sense from a public policy perspective.
How do you know the potential economic costs are minimal relative to the benefits? Considering all of the positive spillover effects associated with employment, any policy that hurts it immediately faces a high bar to pass on the benefit side. And public policy should aim to find the best solution--not the least-worst. Taxing low-income workers to address homelessness is obviously far from the best solution.

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Originally Posted by Crawford View Post
Why? How is it any less arbitrary than any other taxing scheme, and what's your preferred alternative (city and state income taxes aren't allowed in Washington, BTW).
Sales taxes and property taxes, for which there are ways to make them less regressive. Less restrictive zoning to address housing unavailability. Or, if it's legislatively possible, a more targeted head-tax would be preferable--say, one for the number of employees making above a specified amount.

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Originally Posted by Crawford View Post

Seattle is booming (and has resulting affordability challenges) largely because of a few large, extremely prosperous employers. Makes sense to look to them first, given that broader schemes like income taxes aren't allowed.
If you have evidence, theoretical or empirical, that the incidence of such a tax would fall mainly on employers--in contradiction of the overwhelming consensus that it falls on workers--I'd love to hear it. Because if that's the case, we should charge a $1,000 per worker tax on Walmart, a prosperous company; but if you're wrong, that means that Walmart's disproportionately low-skill, low-income workers are going to get soaked.

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Originally Posted by Crawford View Post
Sounds good to me, then. If the negative effects are masked, that sounds like a pretty ideal taxation scheme, given tax policy is inherently political and someone needs to pay.
Masking =/= counteracting. Masking means that it is difficult to distinguish the effect by looking at rough statistics like unemployment rates or aggregate income. For example, it's been argued that the housing bubble masked the extent of manufacturing job losses among low-skill men by providing temporary construction jobs. This boom didn't counteract the problems in that area though; once the bubble burst, we finally recognized the issue--and are dealing with the political consequences today.

Another example is identifying the effects of the minimum wage on unemployment. Minimum wage hikes usually occur during periods of economic growth. That creates an empirical challenge with identifying the effects, since there is the possibility that there exist people who lose their jobs due to the minimum wage but others who find them thanks to the boom. So the debate is not whether a higher minimum wage causes a higher unemployment rate, period; it's about whether it causes higher unemployment holding everything else constant. In other words, what would the unemployment rate be in the absence of such a policy change?

Unfortunately, it is politically easier to implement harmful public policies in good times because it is harder for opponents to point to clear evidence that there's harm--but that doesn't mean there isn't harm to flesh and blood individuals. It's like saying that if aggregate income doesn't change everything is fine. But what consolation is it to a cashier who sees lower take-home pay due to the head tax to learn that some other guy got a raise due to entirely unrelated reasons [a raise he would've gotten anyway]?

The worst aspect of such policies is that they also make it harder to implement better ones. The average resident will sleep better at night believing they got Amazon to pay to solve homelessness. Meanwhile, more effective and sustainable solutions will continue to be ignored. It's not until you have big problems that these weaknesses come into painful relief; it took Chicago a fiscal crisis, after all, to finally eliminate our boneheaded head tax.
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  #29  
Old Posted May 15, 2018, 6:24 PM
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Originally Posted by edale View Post
And Amazon made $1.9 Billion in profit in the last 3 months of 2017 alone! I don't want to hear that they 'can't afford' this. I am more sympathetic to smaller businesses, and it does seem like a city income tax would make more sense than a headcount tax.
The discussion isn't whether Amazon can afford it. They can. But that doesn't mean they will continue to expand operations as planned within Seattle as their tax burden continues to increase when they can shift things around with relative ease compared to those other 500 small businesses in Seattle.

I guess you could say Amazon got Primed by Seattle [a reference for the membership fee of Prime increasing to $119/year this month].

Side note: Amazon's profits aren't really that large for a company of it's size. In comparison, Apple had more profit this quarter $13+billion than Amazon has generated since it's founding at $9.6 billion.
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  #30  
Old Posted May 15, 2018, 7:09 PM
skyscraperpage17 skyscraperpage17 is offline
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Originally Posted by M II A II R II K View Post
Amazon threatens to move jobs out of Seattle over new tax

https://www.theguardian.com/technolo...e-homelessness
That title is click bait-y.

Nowhere in the article does it say Amazon threatens to move jobs out of Seattle.

And even if Amazon creates fewer jobs in Seattle going forward, that could be a good thing as it will help to slow down their rapid growth and give the city some breathing room for their infrastructure to catch up. Strong growth isn't good if poorly managed. The city of Seattle, as a government entity, has a responsibility to make sure its citizens have a high quality of life. If there are those in the city's business community who choose not to be good stewards to this end, despite also benefitting from the amenities and services that citizens in the city of Seattle pay for, then maybe they should reevaluate their relationship with those businesses.

IMO, Seattle should have called Amazon's bluff. The reality is Amazon needs them just as much as they need Seattle (just like Georgia did with Delta, which I didn't agree with BTW). Where else are they going to easily plop 45,000 employees? And then there's also having to deal with the sunken costs from all of the money they've invested. At worst, Amazom may retaliate by simply shifting their HQ on paper to another state (like Boeing did). But that alone won't have much of an impact on Seattle from a functional standpoint.

In any event, the move by Bezos (his playing poker with the vote) was shrewd.
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  #31  
Old Posted May 15, 2018, 7:53 PM
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A company that locates in the urban core where only 1/4 arrive by SOV and pays excellent wages to the local staff, while representing a huge chunk of our tax base...that alone makes them good stewards, even before you get to donations etc.
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  #32  
Old Posted May 15, 2018, 8:58 PM
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Originally Posted by Crawford View Post
Putting aside the fact that that's a very modest city budget for a rich, successful city (NYC budget is around $90 billion),
Apples and oranges. NYC is a city-state whose city budget is equivalent to something like 10 other largest American cities combined, and covers literally everything from education to pensions to jails, with no county government/budget. I think NYC's Education budget alone is bigger than the whole yearly budget of LA...
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who cares what the Amazon spokesperson says? They answer to Bezos, not the people of the Seattle.
The city should certainly take into consideration the biggest employer in town, especially when they say it might effect future expansion.
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  #33  
Old Posted May 15, 2018, 10:25 PM
skyscraper skyscraper is offline
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I'm normally vote yes for all taxes.
That’s asinine. All taxes? You mean to say that no matter what the tax is on, how much it costs the taxpayers, what it goes to pay for, who benefits, who doesn’t, you normally vote for it? Really?
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  #34  
Old Posted May 15, 2018, 10:46 PM
Jonesy55 Jonesy55 is offline
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It probably should be related to income of those employees rather than a flat rate regardless of whether they are on minimum wage or $500k/year imo. And I would hope they spend much of it on better mental healthcare provision rather than just projects to mask the symptoms like cheap housing or food kitchens.
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  #35  
Old Posted May 15, 2018, 11:37 PM
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Quote:
Seattle approves ‘head tax’ on large businesses despite Amazon’s opposition
Well then, the easy way around this, is to chop off the heads of all your employees!

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  #36  
Old Posted May 15, 2018, 11:41 PM
Vlajos Vlajos is offline
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Originally Posted by Jonesy55 View Post
It probably should be related to income of those employees rather than a flat rate regardless of whether they are on minimum wage or $500k/year imo. And I would hope they spend much of it on better mental healthcare provision rather than just projects to mask the symptoms like cheap housing or food kitchens.
I'm almost certain this is something that the business/employer pays the city. So will not directly affect employees until jobs are shifted elsewhere, etc.

I guess the company could take it out of employee pay. That's not what happened in Chicago when there was a head tax. At least there was no deduction from a paycheck for it.
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  #37  
Old Posted May 15, 2018, 11:52 PM
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Originally Posted by James Bond Agent 007 View Post
Well then, the easy way around this, is to chop off the heads of all your employees!

The fake, fat hypocritical king had to be beheaded.
Only the real King rules.
I think it'd be a relief for us all if you finally could admit...
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  #38  
Old Posted May 15, 2018, 11:57 PM
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Yeah, really, seems to me that all this means is that employee pay increases less quickly.

The problem is that Washington does not have a state income tax. If there were a state income tax, then the employees could simply be taxed and the revenue could be distributed to the cities to help with their infrastructure. As it is, the city doesn't have enough money to do what it must on the infrastructure side. Even if they were to rezone in a very sensible way and capture value with development fees and lift charges, you'd still be well short of the sort of money you need to build out the transit system faster than before 2040, etc.
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  #39  
Old Posted May 15, 2018, 11:59 PM
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@ James Bond, excuse me, I read too fast.
I read employers instead of employees...
I'm sorry. I should go to bed, need some sleep.
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  #40  
Old Posted May 16, 2018, 12:03 AM
skyscraperpage17 skyscraperpage17 is offline
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Originally Posted by Vlajos View Post
I'm almost certain this is something that the business/employer pays the city. So will not directly affect employees until jobs are shifted elsewhere, etc.

I guess the company could take it out of employee pay. That's not what happened in Chicago when there was a head tax. At least there was no deduction from a paycheck for it.
It wouldn't show up as a line item deduction on the paycheck. Instead, they can respond by reducing salary bands (for new employees) or reducing/eliminating certain benefits across the board.
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