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Seattle Transit Blog: How About a Payroll Tax?
Local environmentalist Roger Valdez, writing for Seattle Transit Blog, suggests one way transit advocates might move forward in the wake of the defeat of the $60 car-tab fee (earlier this month) and the so-called head tax (in 2009).
One reason the $60 fee lost was because it was regressive; that is, the fee would have been the same whether a driver owned a clunker or a Mercedes. Unlike the flat car-tab fee, Valdez argues, a payroll tax is progressive---the more you make, the more you pay. The head tax, meanwhile, died because businesses opposed it, arguing that it would discourage businesses from locating or expanding in Seattle.
The payroll tax would get around both those problems. It's progressive (the more you make, the more you pay); and it's paid by employees, not employers so businesses would have less reason to oppose it.
Ideally, of course, the city would simply reinstate the employee hour tax (AKA the "head tax"), a $25-per-employee annual tax on employers that exempts employees who don't drive to work alone. Given that the council voted 8-1 to repeal the tax two years ago, though (and given that only one current council member, Mike O'Brien, supports the head tax), any effort to resurrect the head tax seems dead on arrival.
One reason the $60 fee lost was because it was regressive; that is, the fee would have been the same whether a driver owned a clunker or a Mercedes. Unlike the flat car-tab fee, Valdez argues, a payroll tax is progressive---the more you make, the more you pay. The head tax, meanwhile, died because businesses opposed it, arguing that it would discourage businesses from locating or expanding in Seattle.
The payroll tax would get around both those problems. It's progressive (the more you make, the more you pay); and it's paid by employees, not employers so businesses would have less reason to oppose it.
True, imposing a payroll tax to fund street car operation or other transit related infrastructure would take a vote of the people. But unlike $60 car tabs this tax couldn’t be called regressive. And the funds could be used “any purpose relating to planning, construction, and operation of high capacity transportation systems and commuter rail systems, personal rapid transit, bus ways, bus sets, and entrained and linked buses." ...
I know imposing new taxes isn’t an easy step politically. But as long as the Council is going down a rabbit hole with ideas like an income tax, something that won’t pass legal muster, why not take a stab at something that would: a payroll tax. After all, our sustainable sister to the south, Portland, uses a payroll tax to fund TriMet. That’s an idea I can wrap my head around.
Ideally, of course, the city would simply reinstate the employee hour tax (AKA the "head tax"), a $25-per-employee annual tax on employers that exempts employees who don't drive to work alone. Given that the council voted 8-1 to repeal the tax two years ago, though (and given that only one current council member, Mike O'Brien, supports the head tax), any effort to resurrect the head tax seems dead on arrival.
