Published: Tue, May 15, 2018
Business | By Kate Woods

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

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

The Seattle City Council voted 9-0 to impose a new tax on large employers to raise nearly $50 million in funding for affordable housing construction and homeless services.

Durkan (D) is expected to sign the measure, which passed unanimously and will impose an annual tax of $275 on each employee at businesses making at least $20 million a year in revenue.

Under the new law, companies bringing in more than $20 million in revenue a year would be required to pay $275 per employee every year.

The compromise approval - even without a ban on so-called "sweeps" and far from the originally proposed $500 per employee mark, let alone Sawant's bid for $1,000 - also yielded a major victory to the Socialist Alternative leader and activists calling for large companies to do more to address social issues in the cities in which they do business.

Roughly 60% of the revenue raised would go to building affordable housing, and 40% will be put toward emergency services for the homeless, Councilmember Lorena Gonz-lez said in the Council's public meeting Monday.

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Amazon had led private-sector opposition to the plan, saying earlier this month it was freezing expansion planning for Seattle pending the outcome of Monday's action.

Boeing, Costco Wholesalers and Microsoft, which are each among Seattle's largest employers, declined to comment on the matter.

"The City of Seattle has an obligation to take care of those people who are suffering on our city's streets", Gonzalez said prior to Monday's vote.

Other cities have implemented similar taxes, but critics say Seattle's tax could threaten the booming local economy and drive away jobs. The number of homeless students in the city's public schools has tripled, to almost 4,300 last school year.

We appreciate Mayor Durkan's efforts to significantly modify the City Council's ill-conceived proposal to tax jobs in Seattle. And, they made noises about looking at other cities for it's second corporate headquarters site and other operations as well.

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Shannon Brown, 55, who has been living a tiny home at a south Seattle homeless encampment, said there's simply not enough housing for the city's poorest people.

The plan that advanced out of committee on a 5-4 vote Friday would tax large businesses such as Amazon and Starbucks about $500 a year per worker.

Proponents say people are dying on the streets, and while city-funded programs found homes for 3,400 people previous year, the problem deepens. "I don't understand why businesses think it's wrong to help". 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.

"As a union rep, we meet with our employers to discuss our problems and come up with solutions jointly", Bufford said.

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