Seattle is a taxing place

The Seattle City Council’s Affordable Housing, Neighborhoods, and Finance Committee will meet tomorrow to possibly vote on the proposed pop tax (technically “a tax on engaging in the business of distributing sweetened beverages”) and to discuss an income tax for the city. (See today's post from Opportunity Washington on the income tax idea.)

Emily Parkhurst of the Puget Sound Business Journal (PSBJ) writes about the pop tax:

For restaurants, this exacerbates a growing problem — regulations, wage increases, taxes and rising real estate prices are driving up costs in what is already a low-margin business. Selling food in Seattle has become an incredibly expensive proposition and we keep making it worse by piling on new regulations.

And to what end? As Kevin Schofield at Seattle City Council Insight notes, proponents can’t agree on the reason they want to tax pop. Schofield has another post on the pop tax that includes an interesting discussion about how the tax on pop could end up making a business itself unprofitable: “Soda is a high-margin, high-volume moneymaker that carries the burden for other unprofitable but necessary items on the menu.”

It’s not just food businesses that are feeling the weight of Seattle’s regulations. Ashley Stewart had a good, in-depth story in the PSBJ earlier this month about the “chasm between City Hall and business.” She writes that an

increasing disconnect between City Hall and businesses has the potential to derail the city’s growth. New regulations aimed at tackling income inequality threaten to hurt the people they seek to help by increasing employers’ labor costs, sometimes leading to job cuts. The city has also increased its budget as new legislation increasingly draws legal challenges.

Just today, according to the Seattle Times, the Rental Housing Association of Washington is planning to sue over the Seattle ordinance enacted in December that limits move-in fees and allows renters to pay deposits in installments. The association argues “that the limits conflict with the state’s ban on rent control, violate their free speech and due process rights, and amount to an illegal taking of private property under the state constitution.”

Any one regulation or any one tax probably won’t break a business. But as they add up (as they have been in Seattle), their cumulative impacts can.

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