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Christine Gregoire talks about Seattle’s economic competitiveness at MOHAI’s Innovation Breakfast. (GeekWire Photo / Monica Nickelsburg)

Christine Gregoire didn’t mince words when asked about Seattle’s controversial new head tax at the Museum of History and Industry’s Innovation Breakfast on Thursday. The former governor of Washington and CEO of Challenge Seattle said she is categorically against the legislation, passed by the Seattle City Council and signed into law this week.

“I object to the policy of a head tax,” Gregoire said during an on-stage discussion with MOHAI Executive Director Leonard Garfield. “I firmly believe it is a tax on jobs. I firmly believe it undermines our international and national reputation.”

Gregoire spends a lot of time thinking about Seattle’s competitiveness in the global economy at the helm of Challenge Seattle. The organization aims to solve regional challenges in areas such as transportation and education with the help of government, the University of Washington, and 17 leaders from some of the region’s largest and most successful companies.

Those companies, Gregoire said, “want to be good citizens. They wouldn’t be doing Challenge Seattle if they didn’t.” But she is concerned that Seattle’s new tax of $275 per employee, each year, on businesses with more than $20 million in annual revenue, sends the wrong message. The city arrived at $275 in compromise with Mayor Jenny Durkan, who threatened to veto the original tax of $500 per employee, per year. That would have raised about $75 million annually. The legislation that made it across the finish line will raise around $48 million.

The tax hits Amazon hardest and the e-commerce giant was at the center of a fierce debate that raged over the past few weeks. After the tax passed, Amazon said the city’s “hostile” attitude forces the company to question its growth in Seattle.

But not everyone in the tech industry opposes the tax, which will go toward deeply affordable housing and homeless services. Take Rachael Ludwick, a software developer for Glowforge and activist with Seattle Tech 4 Housing.

“One thing getting lost is that the income inequality in Seattle is not just about Amazon or Bezos or other executives,” she said in an email. “The reality is that the highest paid employees are clustered in certain industries (like tech) and at the larger employers. I think of the head tax as an imperfect proxy for the income tax the city can’t impose.”

Continue reading for Gregoire’s full comments from MOHAI’s breakfast and see all of GeekWire’s head tax coverage here.

I object to the policy of a head tax. I firmly believe it is a tax on jobs. I firmly believe it undermines our international and national reputation. Now, having said that … Seattle is the process capital of the world and yet on this there was no process. No process. How did we arrive at $75 million? I don’t know. I really don’t. Why did we decide to demonize a major employer in our backyard providing good jobs to the people of our community? When asked what is the plan for how to spend the money, what is it? When asked of what money you’ve already spent, what has been successful? And no answer was given there. Thank goodness for the mayor stepping in and doing something to reduce the amount and working in partnership. I fundamentally believe the companies that I work with want to be good citizens. They wouldn’t be doing Challenge Seattle if they didn’t.

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