Seattle may now kill the 'Amazon tax' it just passed

Marco Green
June 13, 2018

After a brief, tumultuous existence, the Seattle City Council voted this afternoon to bump off the very tax on business they'd heralded last month.

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

The head tax would have imposed a $275 per employee on businesses that bring in $20 million or more annually, affecting about 3 percent or 585 of the city's companies. It comes as a group formed by funding from numerous city's largest employers and business groups including the downtown chamber opposing the employee hour tax announced over the weekend it had collected more than the needed signatures required to put a repeal initiative on the ballot.

In a matter of weeks after the tax passed, the business community raised more than $280,000 for the repeal campaign, dubbed No Tax on Jobs, including a $25,000 donation from Amazon.

Several council members, including three who sponsored the legislation, lamented the about-face even as they supported repealing the tax.

"People who say we are bowing to political pressure - nothing could be further from the truth", Herbold said.

The council voted 7-2 after supporters and opponents packed a meeting with signs saying, "Tax Amazon, housing for all" and "No tax on jobs", with some shouting for more time to discuss the issue.

Newly elected Councilmember Teresa Mosqueda also said she would not vote to repeal the ordinance without a replacement revenue source for homelessness funding.

Council members originally proposed a larger head tax of $500 per employee, but cut it almost in half a compromise with Mayor Durkan. The message gained traction with some homeowners, frustrated by the city's response to homelessness, in particular tents and RVs moving into residential neighborhoods. The Northwest Grocery Association and Washington Food Industry Association donated $50,000 and $30,000, respectively.

The other thing was the campaign to repeal to the head tax by placing it on the ballot in November.

Sawant characterized the repeal as a "cowardly betrayal" of working class Seattleites and a "capitulation" to business interests.

"I think this is problematic enough and Amazon has shown enough troubling behavior that I would drop out" of the running for HQ2, Richard Florida, an urban expert at the University of Toronto's Martin Prosperity Institute, told The Hill. "This is exactly the onslaught of lies and misinformation that came at us on the $15 now campaign".

The council will now be looking at alternative measures to tackle the homeless crisis. "Without progressive revenue options at hand, we are asking families to pay more in property and sales taxes". "I don't care if you're with business or labor", she said. "I will work with anybody to find solutions to make sure that not one more person or one more family goes onto the streets and is living outside and dies out there". "Where will that money come from if we don't have the courage to take it?" said Tim Harris.

An analysis by the consulting firm McKinsey and Company, written in partnership with the Seattle Metropolitan Chamber of Commerce, found that King County needs an additional 14,000 units, at a cost of an additional $200 million, to meet the affordable housing needs in the region.

Other reports by Click Lancashire

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