By Paul Guppy | washingtonpolicy.org
As the Seattle City Council enters budget-writing season it’s apparent some councilmembers don’t think the city’s regressive tax burden is high enough.
Recently the City Council heard a staff presentation about how to impose a regressive tax on app-based delivery services. The idea is pitched as a tax on companies, but in reality it will be paid by customers of Door-Dash, Uber Eats, GrubHub, Postmates and other popular door-to-door services.
The proposal is cleverly misnamed a “Network Company Tax” supposedly to impose a “tax on network companies that operate in Seattle.” In another crafty move backers sometimes call it a “fee.” In practice it is a tax and would be added to the cost of each order, on top of current sales taxes. Prepared meals and retail items would be covered, but groceries would be exempt.
If enacted the delivery tax would take effect starting January 1st and would apply to an estimated 30 million delivery orders per year. Of course the tax would not really be on “network companies” – it would be paid by their customers.
Not surprisingly this idea is unpopular. People in Seattle already bear the highest tax burden in the state, and it would strain the memory of even the oldest residents to think of a time when Seattle officials ever reduced a general tax.