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Seattle Council OKs Lower $50M Annual Head Tax On Big Biz

15 May 2018
Seattle Council OKs Lower $50M Annual Head Tax On Big Biz

'We are demanding council to not backslide on $75 million dollar tax, ' said city council-member Kshama Sawant, who organized the protest along with the Affordable Housing Alliance. If passed it would add a $520 tax per person, per year on every large company in the city.

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

The city councilors who sponsored the new tax said it was time for the company to pay its fair share. That original compromise was voted down Friday.

Seattle city council members will propose a smaller head tax plan this afternoon, reflecting a compromise with Mayor Jenny Durkan in the first major policy debate of her administration. The "Bezos Boom" has proved a mixed blessing, though, as middle-income residents have been priced out of Seattle.

It is not known if Amazon will accept the $275 per worker proposal. The company did not comment on the new compromise when GeekWire asked ahead of Monday's meeting. For Amazon, which is the city's largest employer, that would mean an additional $20 million per year.

González said the adjusted spending plan for the $275 head tax will align more closely with the 60-40 split.

"It seems only fair that as so many struggle to make their way through a tax system that's rigged in favor of large corporations, that we ask those same corporations to financially contribute to the public health and housing solutions created to address those consequences", they wrote. "If we had a weaker movement, we could have won less or even nothing".

Now the mayor and City Council have to decide whether to take this threat seriously. The e-commerce giant paused construction on one of its office towers and said it is reconsidering occupying another. The halt put 7,000 jobs on the line. Amazon's plans in Seattle after today's vote are not clear. Other cities have also struggled with taxing employers.

"When we start talking about changing that system that benefits some to make it more fair, there's a lot of resistance", Councilmember Mike O'Brien said during Monday's meeting. And when Amazon has that much power over you, we have a very serious systemic problem.

The city's homeless population is growing, behind only NY and Los Angeles. United Way of King County spent around $6.5 million in 2017.

Starbucks spokespersron John Kelly, Starbucks' senior vice president of global public affairs and social impact, said the city hasn't been accountable enough to prove it can use the money wisely.

But the city says homelessness is a moving target. A year ago the city spent $68 million on homeless services. A count previous 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.

It would only impact businesses with over $20 million a year in gross revenue.

Outside of Seattle, King County's 2018 budget for homelessness spending was $66.9 million, which includes funding for emergency shelter, prevention, supportive housing, rapid re-housing, transitional housing, and other homeless housing programs and supportive services.