By Erica C. Barnett
Our guest on Seattle Nice this week isn’t a politician—he’s a former politician-turned-Seattle Chamber leader, and he says he sees no contradiction between his past as an pro-tax progressive legislator and his present job as the head of the city’s anti-tax business lobby group.
Joe Nguyen, the former state senator from West Seattle, defeated his opponent Shannon Braddock in 2019 by emphasizing his progressive bona fides, exemplified by a commitment to take no corporate contributions. Elected on that anti-corporate agenda, Nguyen went on to propose or support a payroll expense tax on big businesses, an excise fee on businesses that pay executives more than $1 million a year, and the statewide capital gains tax. “Tax the rich,” he wrote in the Stranger, which lauded him (pretty excessively, even at the time) as the “AOC of Washington state.”
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As head of the Chamber, Nguyen leads an institution historically opposed to business and capital gains taxes, and he talks like it, too—telling Seattle Nice that while he thinks “we need to have a more equitable tax structure in the United States, in Washington State, I worry that we’re putting all of our eggs in one basket” by taxing big tech businesses over and over. Already, Nguyen said, businesses have started to move jobs from Seattle to Bellevue because of the JumpStart tax, a payroll tax on Seattle’s biggest companies that the city now relies on to backfill its annual general fund shortfalls.
“Politically, it is very popular to say, ‘Tax the rich.’ Politically is very popular to say, ‘Go after the large companies.’ But the hard part that we’re going to put ourselves in is: If you want to tax the rich, you got to have rich people to tax,” Nguyen said.
“I was the architect and then sponsor of a lot of these policies,” Nguyen continued. “However, you’re concentrating a lot of that [taxation] into one specific area. And when you start to get some of this volatility, like you mentioned in your in your post [about social housing revenues] the other day, that’s the worry that I have.”
Listen to a preview of our conversation‚ in which David and I rant about the money pit that is the new downtown Convention Center, and subscribe to Seattle Nice to hear the full episode.
Editor’s note: During our interview, I said the Chamber has supported moving oversight of some parts of the homelessness system to the city’s Human Services Department. The Chamber has not taken a position on this issue.
It is more effective to tax at the state level, as Seattle is part of a much larger metro area where business activity moves seamlessly across the lake and north of Seattle. It is much harder and less attractive to move businesses out of state and away from the tech infrastructure that most of these businesses need to thrive.
It would be interesting to see if Bellevue, Kirkland, Redmond, Bothell, Woodinville, Shoreline, Lynwood, Mill Creek, Mukilteo, and Everett raised taxes in concert with Seattle would businesses move to Renton, Tukwila, Kent and other south-of-Seattle destinations where people of color are moving due to the high cost of housing in Seattle. Sometimes that tax argument is merely a pretext for people running these businesses to move where they already want to move, and if the tax advantage favored areas where they did not want to move to, they would stay put.
Taxes are ONE of many factors in deciding where to move a business, and the other factors are NOT equal for all potential locations. I personally think the light-rail link to the Eastside will cause many businesses to re-think their decision to leave Seattle, as it makes it easier for many of their employees to work in the city.