Thursday, 16 August, 2018

Seattle City Council approves controversial head tax on large businesses

Protesters attend the Seattle City Council finance committee meeting Friday May 11. The committee voted 5-4 to reject Mayor Jenny Durkan’s proposal of a more modest tax on large employers to address the city’s homelessness crisis.(Steve Ringman  The Seattle approves tax on companies like Starbucks, Amazon to fight homelessness
Cristina Norman | 15 May, 2018, 22:37

Seattle's largest businesses, including Amazon and Starbucks, must pay a corporate tax that will raise money to reduce homelessness, under a plan approved Monday.

The head tax is a $275 tax per employee for larger companies with more than $20 million in annual revenue.

But the proposal itself had actually been reduced, with the initial pitch putting the tax at $500 per head, in order to pick up enough votes to pass and avoid a mayoral veto. Seattle has long struggled with its homelessness issue, declaring a state of emergency because of it in 2015.

As Common Dreams reported earlier this month, Amazon paused construction of a major expansion of its headquarters in Seattle pending the outcome of the tax vote and has repeatedly threatened to leave the city if it dares to demand more in taxes to fund badly needed affordable housing projects.

However, he added, "We remain 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". At that time the city will evaluate whether or not to renew the tax. Free for 14 days - no credit card required!

"We are disappointed by today's City Council decision to introduce a tax on jobs", Amazon Vice President Drew Herdener said in a statement.

Head taxes are extremely rare in the US and the ones in place are a fraction of Seattle's proposal. One state Republican leader said he would seek legislation next year to make clear that a city tax on employees, wages, or hours is illegal.

Supporters of the tax say that large companies such as Starbucks and Amazon have contributed to Seattle's homelessness by driving up rent and home prices.

The head tax approved on Monday is not the first. Almost 600 employers - about 3 percent of all Seattle businesses - would pay the tax starting in 2019.

"This was a tough debate in our city", she said. "If they can not provide a warm meal and safe bed to a five-year-old, no one believes they will be able to make housing affordable address or opiate addiction". In 2017, the city counted 8,522 homeless people.

Both businesses have come out strongly against the tax questioning the city's ability to use tax dollars efficiently and responsibly.

He noted that city revenues have grown dramatically and that the city "does not have a revenue problem - it has a spending efficiency problem". Those on the smaller end of that scale say they fear they will feel the brunt of it.

The Seattle City Council unanimously passed a smaller version of the controversial "head tax" on Amazon and other top-grossing businesses that has sent shockwaves through the tech industry and municipal government over the past few weeks.

Overall, around three percent of Seattle businesses will be hit by the tax, which is set to last for five years. Separately, the company has committed more than $40 million to two groups: the Mary's Place shelters for homeless families, including space in company buildings; and the FareStart non-profit organization for homeless and disadvantaged men, women, and kids, including space and equipment for FareStart restaurants.

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