Head Tax

THE “HEAD TAX” LAW HAS BEEN REPEALED! On Tuesday, June 12, after reconsidering the recently passed “head tax,” seven members of the Seattle City Council voted in favor of repealing the new tax, and mayor Jenny Durkan agreed. But we still need money to help the homeless and for affordable housing, so now people need to work together to find new, more practical sources of revenue!

Prior to the repeal of the “Head Tax” I prepared the following arguments opposing the tax:

In May the Seattle City Council passed a new law that will tax large corporations in Seattle $275 per year for each employee, in order to provide funding for helping the homeless and for providing affordable housing. The goals are good, but the method of raising funds is likely going to do far more harm than good and make the homelessness situation worse.

The tax will help fund help for the homeless and more affordable housing but what about the downside? The potential benefits of the tax are not enough to offset the damage it can cause!

The concept that businesses are greedy and taking advantage of working people is a Socialist concept and stereotype that is mostly false. It is true that there are some greedy people out there that cheat other people, and some of these people own businesses, but most businesses are run by honest people that only seek a reasonable profit, to take in a reasonable amount of money beyond what they have to pay out in expenses.

A big company brings in billions of dollars a year! But the company pays out almost as many billions of dollars in expenses. What is left over, the profit, may be only millions or a billion or so.

Big corporations make huge amounts of money and the “head taxes” are just a drop in the bucket. Actually, a corporation issues stock in order to raise money. The stock is sold as shares, and each share represents a tiny fraction of the company. Part of the profit is used to improve the company, and the rest is divided up amongst the shares of stock. So a billion-dollar profit may end up as a few cents or dollars per share. Many of these shares are owned by founders and high officials of the company and by rich people, but usually most of the shares are owned by individual people and by pension funds that will be used to pay pensions to ordinary people when they retire.

The tax is likely to add to the number of homeless people! In order to maintain a reasonable profit, businesses may very well lay off people in order to cut back on the total tax they have to pay. They may automate some positions. The may move some (or all) of their jobs out of Seattle in order to avoid paying tax on those employees. Many people, now jobless, will be unable to pay their rents or house payments, and end up homeless.

The amount of taxes collected will be less than expected if there are fewer employees to tax.

Rather than the “head tax” it would be much better to use other taxes to do a better job of raising money to help the homeless and provide more affordble housing, such as a graduated income tax and tax on rents.

Return to Bob Fleming’s Politics Home Page Return to Bob Fleming’s Home Page The Fleming Family Home Page
Contact Me

©2018 Robert M. Fleming Jr.

This page was last updated on 22 June 2018.

We are happy with our web host, 1&1 Internet!

1&1 Internet banner

Valid XHTML 1.0 Transitional