State & Local Government Policy, Business and Technology

Will Seattle's Controversial Tax on Big Businesses Stunt Its Economy?

Governing: Seattle's new so-called head tax is far from the first of its kind. But while the per-employee tax on the city's largest employers may not be unique, it may be the most blatant effort yet to grab revenue and is already stirring anger in the business community.

Earlier this month, the Seattle City Council unanimously passed a $275-per-employee tax on companies that gross over $20 million a year, such as Amazon and Starbucks. The city estimates it will generate nearly $50 million per year -- a roughly 3.5 percent increase to its budget -- to address housing affordability and homelessness, which reached emergency levels in recent years. The tax is scheduled to go into effect in 2019 and sunset after five years.

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