Head Tax Repealed

By Erica C. Barnett November 12, 2009

Also this morning, the city council voted to repeal the employee hours tax, a $25-per-employee tax, paid by employers, that exempts employees who don't drive to work alone. The tax pays for transportation projects; businesses and council members like Tim Burgess opposed it because, they said, it's incredibly complicated to administer (not true) and sends a message to businesses that they aren't wanted in Seattle (doubtful: Russell Investments brought its 1,100 employees to Seattle while the tax was still in effect).

Friends of Seattle sent a last-minute letter to the council earlier this week, pleading with council members to either vote against the repeal or to amend the law to merely suspend the tax temporarily and to track the economic impact of the repeal for a year.

The vote to repeal the tax was 8-1. Budget committee chair Jean Godden "held her nose" and voted for it, according to her office, in the interest of supporting a budget that the entire council worked together to pass. McIver, playing the crotchety realist until the end (his replacement, Mike O'Brien, starts in January) was the only vote against repeal.

McIver says he supports the tax because "it raises $4.5 million a year, we've got a $72 million deficit and we could use the income we already have. To be getting rid of income while we have a budget deficit is just digging a deeper hole. That just doesn't make a lot of sense to me."

Mayor-elect Mike McGinn has not yet returned a call for comment on the repeal, which he (along with  Mike O'Brien) opposed.

Technically, the repeal won't be law until the full council passes the budget on November 23; it will go into effect on January 1, 2010.

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