First public hearing on WA's statewide proposal to tax high salaries
Statewide payroll tax proposal draws support, opposition in Olympia, WA
A proposed statewide payroll tax on salaries above $125,000 drew testimony in Olympia this week, with supporters saying it would generate new revenue for state services and opponents warning it could hurt hiring and raise consumer costs. House Bill 2100, sponsored by Rep. Shaun Scott of Seattle, would levy a 5% tax and is modeled after Seattle’s existing payroll tax. Backers argued the Seattle program has produced growing revenue, while business groups said a statewide version could reach beyond large corporations and affect employers across multiple industries.
OLYMPIA, Wash. - A statewide payroll tax was debated in Olympia this week. The goal is to impose a 5% excise tax on salaries that are higher than $125,000.
The backstory:
Rep. Shaun Scott from Seattle is the main sponsor of HB 2100 and he is advocating for what he calls a moderate tax on large companies. He testified in front of the House Finance Committee, saying federal cuts was one reason to pass the measure.
The statewide proposal is inspired by a similar payroll tax that is already in effect in Seattle.
"Year over year, ever since the payroll tax in Seattle was assessed, the amount of revenues that it has yielded has increased, the amount of high-earning jobs that have been subject to the payroll tax has increased and the amount of major employers in that space of time has also increased in the last five years," Rep. Scott said.
Rep. Shaun Scott, main sponsor of HB 2100, speaks in support of his bill during a House Finance Committee meeting. (TVW)
What they're saying:
Many supporters testified lobbying lawmakers to advance the proposal out of committee, including Manousos Jacobsen with the Democratic Socialists of America.
"I work at Spokane Community College, most of my students rely on FAFSA grants and loans, Medicaid and SNAP, the same program my family relied on growing up. HB 2100 raises revenue by taxing only the biggest companies and uses those funds to protect the programs working families rely on," Jacobsen said.
The group Tech 4 Taxes is also pushing for the tax.
"The Well Washington Fund creates a source of revenue that our social programs desperately need by taxing the corporations in our state that can afford it the most," said Fatema Boxwala with Tech 4 Taxes.
The head of Washington’s public school system showed up in front of lawmakers and also pushed for the payroll tax.
"This is on businesses. I think they can handle the gap, I think it’s inevitable that at a federal level we are going to see social security have to be saved, quite frankly, by moving the cap, so this is a progressive way to fund your biggest responsibility," Superintendent of Public Instruction Chris Reykdal said.
Superintendent of Public Instruction Chris Reykdal testifies in support of HB 2100. (TVW)
The other side:
Opponents say Seattle’s payroll tax is contributing to the commercial vacancy rates and Seattle employers left for cities like Bellevue. If the payroll tax is expanded statewide, critics say it will be a job killer in the long term and businesses that do stay will be forced to pass on higher prices to consumers.
Opponents include groups like the Seattle Chamber of Commerce, with Joe Nguyen speaking on its behalf.
"This bill in the summary does say it’s a tax on large companies, I think it sounds like the definitions are influx, but even at the $215 and $500 million in receipts, that stretches well beyond just wealthy corporations. You are going to be able to capture grocery stores, which would make cost for food a lot higher, you are going to touch upon healthcare providers, which will make healthcare costs higher as well," Nguyen said.
Joe Nguyen with the Seattle Chamber of Commerce testifies against HB 2100. (TVW)
Representatives from the Washington Technology Industry Association and the Association of Washington Business also testified.
"While the state may see short-term revenue, the long-term risk is losing jobs, investments and competitiveness," Amy Harris with WTIA said.
"The fact that we are even debating a tax on good jobs sends the wrong message here and out of state," said Kris Johnson with the Association of Washington Business.
As of Friday, HB 2100 did not have another scheduled meeting, but FOX 13 will continue to track this bill if it advances out of the House Finance Committee.
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The Source: Information in this story came from the Washington State Legislature and FOX 13 Seattle reporting.