Seattle City Council approves controversial head tax on large businesses

Donna Miller
May 16, 2018

The initial proposal - $500 per employee - met aggressive opposition from Amazon. The city council would need to review the tax, which kicks in next year, after five years if the city wants to extend it. Amazon, the city's largest employer with 45,000 workers, would take the biggest hit. The amendment is the result of a compromise reached between Mayor Jenny Durkan and several sponsors of the originally proposed tax over the weekend.

Whether Amazon will accept the new $275 per-employee cost remains to be seen.

For her part, Durkan said the limited tax would "address our homelessness crisis without jeopardizing critical jobs".

As Next City has reported in the past, Seattle is the only city in the country to have one of the top five highest tax burdens for people earning $25,000 or less while also having one of the lowest tax burdens for people earning more than $150,000.

A survey taken a year ago showed Seattle has around 11,600 homeless on its streets and that one in 16 schoolchildren are without permanent shelter. The Council's spending plan allocates 60-70 percent for affordable housing and the remaining funds will go toward shelters and other homeless services. "So you're either well-off and hungry or homeless and well fed".

Council members were working on the deal past midnight Sunday, they said.

"We have community members who are dying", Council Member Teresa Mosqueda said before the 9-0 vote, the Times reports. One state Republican leader said he would seek legislation next year to make clear that a city tax on employees, wages, or hours is illegal. It found that a lack of coordination between Seattle, surrounding cities, and the county creates inefficiency in the region's homeless response.

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"The spending keeps going up and we're not seeing results".

The councilmember said Bezos becomes $275 million richer every day.

The big retailers aren't the only ones raising concerns and questioning Seattle's ability to address the city's homeless problems thus far. Two areas considered favorites by analysts for the second Amazon headquarters, Boston and Washington, D.C., have experienced their own surges.

The plan approved by the council represents a compromise from the original version which would have taxed companies $500 per employee and raised $75 million a year. That figure could quickly rise when the funding mechanism would transition to a payroll tax. 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.

"It seems to me this debate is about the anger or fear at what the city is becoming", said Council President Bruce Harrell, who had to warn members of the crowd after repeated yelling and chanting during the proceedings.

Almost 600 large employers making at least $20 million in gross revenue would pay the tax that would begin in 2019.

Proponents say people are dying on the streets, and while city-funded programs found homes for 3,400 people previous year, the problem deepens.

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