Seattle backs ‘head tax’ on large companies like Amazon to help homeless

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Officials in Seattle have unanimously approved a tax on large businesses such as Amazon and Starbucks to fund the fight against homelessness after weeks of heated debate and raucous hearings.

The city council backed a compromise plan that will charge large businesses about 275 US dollars per full-time worker each year less than the 500 US dollars per worker initially proposed.

Amazon Seattle Tax
Members of the public at the meeting where Seattle City Council backed a ‘head tax’ on large companies to raise money to fight homelessness (Elaine Thompson/AP)

The debate over who should pay to solve a housing crisis exacerbated by Seattle’s rapid economic growth comes amid rocketing housing prices and rising homelessness.

The Seattle region had the third-highest number of homeless people in the US and saw 169 homeless deaths last year.

Council members who sponsored the initial proposal said 48 million dollars a year was not enough to address the city’s urgent housing needs but conceded they could not get the six votes needed for a larger tax and to override a potential veto by the mayor, who favoured a lower rate and faced intense pressure from businesses.

Amazon Seattle Tax
People fill the hallway before the Seattle City Council meeting (Elaine Thompson/AP)

Amazon vice president Drew Herdener said in an emailed statement that the company was disappointed by the council’s decision to introduce “a tax on jobs”.

While Amazon has resumed construction planning on the downtown building, he said the company is “apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here”.

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.

Supporters insist that Amazon and others that have benefited from Seattle’s prosperity and contributed to growing income inequality should pay.

Amazon Seattle Tax
Ami Huntley speaks in favour of the proposed ‘head tax’ (Elaine Thompson/AP)

“People are dying on the doorsteps of prosperity. This is the richest city in the state and in a state that has the most regressive tax system in the country,” said council member Teresa Mosqueda, who supported a larger tax but called the plan “a down payment” to build housing the city needs.

They voted as people packed the meeting, holding signs saying “People before profits” and chanting “Housing is a human right”.

Amazon Seattle Tax
Seattle City Council member Debora Juarez, right, speaks as council members Kshama Sawant, left, and Teresa Mosqueda listen before the vote to approve the tax (Elaine Thompson/AP)

Nearly 600 large for-profit employers – about 3% – making at least 20 million dollars in gross revenue would pay the tax, which would begin in 2019.

Amazon, the city’s largest employer with 45,000 workers, would take the biggest hit.

The tax would end after five years with a review in the last year to determine whether or not it should continue.

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.

Amazon Seattle Tax
People pack the Seattle City Council meeting (Elaine Thompson/AP)

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

“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 queued for an hour before Monday’s meeting began.

“There’s no way I can afford to live in Seattle. I don’t understand why businesses think it’s wrong to help.”

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

“They’re driving this economic engine,” he said. “I’m confused about why the city of Seattle is fostering an adversarial relationship with businesses in this city.”

The city spent 68 million dollars on homelessness last year, and some said they wanted to see the city prioritise its money better.

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