Taxing Job Creators is Bad for Business

Advocacy Matters The Silicon Valley Organization

Earlier this year, the Seattle City Council introduced a “head tax” ordinance that would levy a $500 per employee tax on businesses that gross more than $20 million/year in revenue. In May, the final ordinance imposed a scaled-back $275 per employee tax. However, less than a month later the Seattle City Council ultimately repealed this ordinance after hearing widespread concern that this policy would amount to a “tax on jobs”.

The SVO applauds the Seattle City Council’s decision to repeal this tax on job creation.

“A tax to punish businesses for providing jobs and hiring employees is not the right approach to ensure long-term economic prosperity,” said Matt Mahood, President & CEO of The Silicon Valley Organization. “The Silicon Valley business community is committed to partnerships that address the most challenging regional issues of our time such as economic development, housing affordability, homelessness, and transportation infrastructure. A tax on jobs would only discourage job growth and create disincentives for employers to continue existing operations and to expand operations in Silicon Valley.”

Technology companies are increasingly becoming targets for new taxes and being blamed for the region’s housing affordability crisis, despite the fact that cities continue to enforce anti-housing policies that have severely restricted housing supply and have driven housing prices sky-high. In order to truly address the systemic issues that drive up housing prices, we must look towards accelerating housing production to provide enough homes for everyone to do business, support their families, and to enjoy a high quality of life in Silicon Valley.

Meanwhile, local cities in Silicon Valley are considering their own versions of the head tax. Mountain View, Cupertino, and Sunnyvale are all considering variations of the head tax that could potentially enact anywhere from a $100 to $400 per employee tax. If these cities move forward with these proposals, the head tax will be a ballot measure that must be approved by voters for the November 2018 election.

As these municipalities are contemplating these un-friendly business legislations and measures, The SVO is doing everything we can to inform and engage our members of these developments.

The Seattle business community were able to defend the city’s largest job creators and brand the initiative as a “Tax on Jobs” through consolidated support. This is a perfect example of what happens when policy and advocacy are aligned to deliver results for our community. When job creators thrive, our community thrives.

This October, ahead of the election, The SVO is traveling to Seattle for our annual Study Mission. Alongside a delegation made up of public sector, private sector and community stakeholders, we aim to analyze how Seattle's business community fought back - and won - so that we can bring home these best practices to ensure we can successfully defend our members as well.

Join us.