Seattle passes a smaller version of the 'Amazon tax'

Sean Reid
May 15, 2018

The tax, which has been unofficially nicknamed the "Amazon Tax", - named after the online retailer which is headquartered in Seattle - will affect businesses that generate annual revenue of $20 million or more, the Seattle Times reported.

But the proposal itself had actually been reduced, with the initial pitch putting the tax at $500 per head, in order to pick up enough votes to pass and avoid a mayoral veto.

Sponsors of the tax said Seattle's biggest-earning businesses should bear some burden for easing a shortage in low-priced housing that they helped create by driving up real estate prices to the point where the working poor and many middle-class families can no longer afford to live in the city.

"A tax on jobs at any level is bad economic policy and will negatively impact Seattle's economy and city tax revenues", Downtown Seattle Association spokesperson James Sido wrote in a statement.

"We remain very apprehensive about the future created by the council's hostile approach and rhetoric toward larger businesses, which forces us to question our growth here", Herdener said. Union construction workers marched on city call to protest the tax, which also drew opposition from business interests. Free for 14 days - no credit card required!

Council member Lorena González, a co-sponsor of the bill, said in a hearing before the vote, "It is regrettable we weren't able to find a path amongst our colleagues and the mayor that they would be able to support a higher taxation rate".

The head tax has ignited something of an existential debate for Seattle over its monumental growth. But she said she was proud the plan for a new tax had "evolved more towards progressivity" and would do things like protect the city's small businesses.

Proponents of the head tax say companies such as Amazon have contributed to homelessness because their highly-paid employees have driven up rents and home prices.

The head tax approved on Monday is not the first. Representatives of businesses warned that the tax would drive employers out of town, while others speakers questioned whether Seattle's city government could be trusted to spend the additional tax revenue wisely.

Herdener then turned the tables, suggesting the people holding the city's purse strings are the problem. "The city does not have a revenue problem - it has a spending efficiency problem".

About 3 percent of Seattle businesses will be affected and the tax will raise about $47 million per year, according to the council.

Before the vote, she said the city "has an obligation to take care of the people who are surviving and suffering on our city streets".

"If they can not provide a warm meal and safe bed to a 5-year-old child, no one believes they will be able to make housing affordable or address opiate addiction", Starbucks' John Kelly said in a statement. The tax would end after five years unless renewed by the city. Separately, the company has committed more than $40 million to two groups: the Mary's Place shelters for homeless families, including space in company buildings; and the FareStart non-profit organization for homeless and disadvantaged men, women, and kids, including space and equipment for FareStart restaurants.

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