


The mayor of Seattle announced this week that the Washington city collected $47 million less in payroll taxes last year on top of an already existing deficit, coinciding with a growing trend of large corporations leaving the blue stronghold.
The nearly $50 million payroll tax deficit adds to a $260 million budget deficit, further stressing Seattle’s economic health. The mayor and Seattle City Council expected the tax to generate more than $400 million in revenue, according to the Seattle Times. Instead, the city brought in only $360 million in 2024 and $315 million the previous year.
“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,” Mayor Bruce Harrell said in a statement on Tuesday, right before criticizing the Trump administration.
“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.”
In 2020, the city council started levying the tax on Amazon and other big businesses as a means to fund affordable housing and jobs in the metro area. At the time, lawmakers believed it would bring in about $250 million a year. Although that projection has been surpassed in the past two years, lawmakers overestimated when drafting this year’s budget.
Former councilwoman Kshama Sawant, a self-described socialist and Marxist, said at the time that the “Amazon Tax” was the beginning of ending “racist gentrification” in Seattle, crediting “the thousands of working people, unions, socialists” for the measure.
Amazon and Expedia are two of the hardest hit corporations. Amazon has been relocating workers and shifting much of its operations to a nearby city, Bellevue. Meanwhile, Expedia announced last month it would cut 1,500 jobs after undergoing a year of layoffs.
KKTH Radio host Jason Rantz believes the rising trend of businesses leaving the city is intrinsically connected to the payroll tax.
“What people haven’t realized yet — but soon will — is that the sharp drop in payroll expense tax revenue means jobs are leaving Seattle. The whole point of the PET was to squeeze ‘free’ money out of businesses because the city arrogantly assumed it held all the cards,” Rantz posted on X.
“But what did PET actually do? It pushed Amazon jobs to Bellevue, kept employees working from home (and out of Seattle), and helped fuel layoffs at companies hit hardest by the tax — like Expedia.”
Even Harrell acknowledged the fact that businesses are increasingly leaving Seattle.
“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,” the mayor said.
Yet he still doubled down on taxing the companies.
“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,” Harrell said. “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.”
The city’s payroll tax could potentially be adopted across Washington, as Democratic state lawmakers are considering enacting their own version of the tax to reduce their budget deficits. Responding to the news in Seattle, Republican state representative Chris Corry posted, “Paging literally everyone in Olympia.”