Seattle Passes Tax on Big Business to Fight Homelessness

SEATTLE (CN) – The Seattle City Council voted Monday to fund homeless services with a $275-per-employee tax on the city’s largest businesses, including Amazon.

City Council members worked over the weekend to reach a compromise with Seattle Mayor Jenny Durkan, who threatened to veto the original suggestion of $500 per employee, proposing her own plan calling for half that amount.

The plan rankled Amazon, one of Seattle’s largest employers, even causing the company to pause construction of a downtown office tower.

“I can confirm that pending the outcome of the head-tax vote by City Council, Amazon has paused all construction planning on our Block 18 project in downtown Seattle and is evaluating options to sub-lease all space in our recently leased Rainer Square building,” Amazon spokesman Drew Herdener said in a statement when the original plan was announced.

Councilmember Kshama Sawant said Amazon was attempting to “blackmail” the city.

Construction worker unions came out against the proposal, fearing loss of jobs, and shouted down Sawant at a recent public appearance.

Other unions, including the Service Employees International Union, supported the tax.

“This was never a proposal targeting one company, but Amazon made the conversation about them when they expressed their intentions to pause construction on their new office tower pending a vote on our Progressive Tax on Business.

“The company recently reported record-breaking profits of nearly $2 billion dollars in one quarter,” according to a statement by Lorena González, Lisa Herbold, Teresa Mosqueda and Mike O’Brien, the councilmembers who proposed the tax.

King County Executive Dow Constantine opposed the higher head tax and praised Durkan’s compromise proposal.

“I commend Mayor Durkan for engaging with leaders across the community and creating a workable compromise. This is the kind of collaborative approach we need. The mayor’s plan for investing the funds is a better balance of addressing both immediate and long-term needs,” Constantine said in a statement.

The tax passed today by the council will raise $48 million a year and will be revisited in five years. Another vote will be required to continue the tax after 2023.

Under the ordinance, for-profit companies that gross at least $20 million in Seattle will pay the tax.

Sawant was the only member to initially oppose the compromise, but voted for it in the end.

“There is no way this tax will be a burden on big business in Seattle,” she said before the vote.

After the vote, Amazon said in a statement that it was “disappointed,” and “very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.”

Durkan said she will sign the measure into law.

"This legislation will help us address our homelessness crisis without jeopardizing critical jobs," she said.

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