February 17, 2019

City council passes scaled-down head tax

15 May 2018, 09:35 | Joann Bryant

The Latest: Seattle approves business tax for homelessness

Seattle approves 'head tax' on large businesses despite Amazon's opposition

Seattle's city council voted unanimously to approve a new tax on the largest employers in the city, despite strong opposition by Amazon and other affected companies.

The mayor of Seattle may make the final call on whether to risk furthering Amazon's wrath by imposing a tax on the city's biggest employers to help pay for the city's efforts to confront homelessness.

While the idea that a company would simply abandon a multi-million-dollar investment halfway isn't really credible, changes to its scheduling, budget and usage plan would certainly affect local contractors - which is why numerous latter showed up to oppose the tax on Amazon's behalf.

Businesses and others who say the tax is misguided and potentially harmful question whether the city is effectively using the tens of millions of dollars it already spends on homelessness each year.

Amazon raised the stakes when it announced it would halt construction planning on a 17-story tower near its hometown headquarters pending the outcome of the tax vote.

As a result of the scaled back head tax, Amazon would see its potential bill fall from an estimated $20 million a year to $12.4 million, given that it employs about 45,000 people in the Seattle area. "They're not seeing the kind of change even with the money we're spending now", said Bruce Harrell, president of the Seattle City Council.

Teresa Mosqueda, who also supported the $500 head tax, says the compromise is a "step forward".

If council members vote as they did to advance the tax, the mayor would then have to decide on whether to sign it into law, let it become law or veto it.

The company's threat to pause its growth in Seattle comes as 20 cities vie to lure the company's second headquarters and as it expands its workforce in Boston and Vancouver, British Columbia. After rejecting the alternative, council members at a committee meeting voted 5-4 to put the tax on the full council agenda scheduled for later in the day. However, a tax on jobs at any level is bad economic policy and will negatively impact Seattle's economy and city tax revenues. King County, which includes Seattle, recorded a record 169 homeless deaths a year ago.

"I live in a little shed, but it's better than living in a tent or in a sleeping bag on the street", she said as she stood in line an hour before Monday's meeting began. A count past year found King County's homeless population to have reached more than 11,000, and a pro bono report issued last week by McKinsey & Co. for the Seattle Chamber of Commerce found that it would cost about $400 million to address the shortage of affordable housing in the area.

John Boufford with the International Union of Painters and Allied Trades said he didn't understand rhetoric against Amazon, which he noted provides good jobs for thousands of people.

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