Seattle mayor reveals $47 MILLION payroll tax deficit as companies flee the Emerald City

The $47 million payroll tax deficit adds to a $260 million budget deficit Seattle was already facing from out-of-control spending.

On Tuesday, Mayor Bruce Harrell said in a joint statement with Councilmember Dan Strauss, “Today’s announcement that [payroll expense tax] revenues collected in 2024 were $47 million lower than projected requires action to ensure our budget remains balanced.”

The statement continued, “We also know this news only adds to significant negative impacts for future years when combined with President Trump’s actions to rescind grants to our city, implement harmful tariffs, and focus on failed economic policies that prioritize the wealthy over working families.” President Trump has threatened to defund so-called "sanctuary cities" like Seattle that fail to cooperate with federal immigration authorities.

In 2018, the city council, led by Marxist Councilmember Kshama Sawant, passed the so-called “Head Tax” on the payrolls of large companies to fund affordable housing. After businesses, including Amazon, threatened to leave the city, the council relented. However, in 2020, the tax was rebranded the “Jump Start” tax and passed by the council. At the time, Sawant said the “Amazon Tax” was the beginning of ending “racist gentrification” in Seattle and credited “the thousands of working people, unions, socialists” for passing the measure.

Councilmembers estimated the tax would bring in about $250 million a year, and though the projection was surpassed the last 2 years, businesses, including Amazon, began moving to other nearby cities, including Bellevue. Last month, Expedia announced it would cut 1,500 jobs after a year of layoffs.

Harrell admitted in the statement that businesses are fleeing his progressive city, adding in the statement, “We know this decrease in revenue is aligned with recent reports of major employers moving thousands of high-paying jobs out of Seattle to other cities in our region.” Yet, he still supported the tax, claiming, “Large corporations should pay their fair share, and we should be wary when they use job placements to avoid paying funding that our communities rely on, but we also must recognize businesses will make choices based on their bottom line. We need to design our tax policies with the full context of our economy and a comprehensive view that ensures we raise the revenue needed to support all of our residents in a progressive way, aligned with our values.”

Now, Democrats in the Washington Legislature are considering enacting their own version of the tax to reduce their own $15 billion budget deficit. Many fear the new tax will chase corporations out of the Evergreen State, and average citizens will be left holding the bag for the Legislature’s out-of-control spending.