Seattle Executives Join Opposition to New Tax to Fund Housing

Subscribe to Bloomberg | Quint
The Daily Newsletter
News & Stock Alerts

(Bloomberg) -- More than a hundred Seattle executives and investors are joining Amazon.com Inc.’s previous opposition to a proposed city tax on large employers to fund programs addressing homelessness and housing affordability.

In a letter to the city council, the group said the tax is “misguided” because companies would be punished for their job growth. “This is like telling a classroom that the students who do the most homework will be singled out for detention,” they said in the letter released Tuesday.

Alaska Air Group Inc. Chief Executive Officer Brad Tilden, Expedia Group Inc. CEO Mark Okerstrom, Tableau Software Inc. CEO Adam Selipsky, and Madrona Venture Group Managing Director Matt McIlwain are among the letter signers. Others include the founders of startups in the city that aren’t yet big enough to be covered by the tax.

The city council is considering a “head tax” of about $500 per employee each year for roughly 500 of the city’s largest employers. The estimated $75 million in additional revenue would fund new affordable housing construction and additional services for Seattle’s growing homeless population.

Washington state law prohibits income taxes, so the city is more hamstrung than other municipalities in raising revenue. The business leaders didn’t propose a specific alternative, but said the council should consider “an optimal mix of taxes” to raise money, better prioritize spending, and consider changes such as zoning to reduce housing costs.

Amazon, which has more than 40,000 employees at its Seattle headquarters, said last week it was pausing its expansion plans in the city pending the outcome of the vote.

Zillow Group Inc. CEO Spencer Rascoff spoke during an investor call earlier Tuesday about the tax plan.

“This is a tricky one for us,” Rascoff said, because the company understands the tough affordability of the city’s housing market, but the proposal is “too blunt an instrument” and could cause the company to expand elsewhere. Other prominent local employers, including Starbucks Corp., Nordstrom Inc., and Redfin Corp., haven’t commented publicly on the tax.

©2018 Bloomberg L.P.

Bloomberg
Stay Updated With Business News News On BloombergQuint
Subscribe to Bloomberg | Quint
The Daily Newsletter
News & Stock Alerts