Theresa Mosqueda's JumpStart Initiative levies a payroll tax on big business in order to fund Covid-19 relief, supportive housing for the chronically homeless, and also funds building electrification for low income residents.
A payroll tax is paid by the business, based on how much money the business pays their employees. From a conceptual point of view, a payroll tax is like an income tax, but its paid by the employer instead of the employee, and it applies only to the money you earn from your job. In Seattle, businesses with an annual payroll of $7 million or more will be taxed .7% to 2.4% on salaries and wages for Seattle employees who make at least $150,000 per year, with the percentage increasing with the income. Small businesses are exempt, and there is no tax due for employees who make less than $150K.
The new tax goes into effect in 2021 and is expected to raise $200 million per year. In 2021, this money will be split between replenishing the city's emergency funds, and preventing budget cuts on city services. In 2022, the money will be spent on affordable housing, community-led development projects, and 9% ( a little under $20 million) will go to Green New Deal.
In the Media
The Urbanist: JumpStart Seattle Passes 7-2
Here's an article on payroll taxes: What makes a business tax progressive? Seattle offers a case study