Amazon strikes back at Seattle business tax aimed to combat homelessness

Seattle's attempt to find a balance between affordable housing and protecting jobs sparked a push back from Amazon and other major corporations, causing the city to rethink its business tax and showing the powerful sway of the online retail giant.

Elaine Thompson/AP
A homeless man sleeps on the sidewalk as people behind wait in line at a fast food restaurant in Seattle on May 24, 2018. Seattle's business tax that was initially meant to help fund solutions to homelessness has received harsh criticism from affected corporations such as Amazon, causing the city to rethink its business tax.

Amazon balked and Seattle is backing down.

City leaders said they plan to repeal a tax on large companies such as Amazon and Starbucks as they face mounting pressure from businesses, an about-face just a month after unanimously approving the measure to help pay for efforts to combat a growing homelessness crisis.

The quick surrender showed the power of Amazon to help rally opposition and aggressively push back on taxes at all levels of government, even in its affluent home city where the income gap is ever widening and lower-income workers are being priced out of housing. It has resulted in one of the highest homelessness rates in the United States.

Amazon and other businesses had sharply criticized the tax, and the online retailer even temporarily halted construction planning on a new high-rise building near its Seattle headquarters in protest.

Mayor Jenny Durkan and seven of nine City Council members said Monday they worked with a range of groups to pass a measure last month that would strike a balance between protecting jobs and supporting affordable housing.

But a coalition of businesses is working to get a referendum on the November ballot to overturn the tax.

In a statement Mr. Durkan and the council members said "it is clear that the ordinance will lead to a prolonged, expensive political fight over the next five months that will do nothing to tackle our urgent housing and homelessness crisis."

They said they would move forward to repeal the so-called head tax. A special council meeting is scheduled Tuesday, where a vote is expected. They didn't provide a backup funding plan.

It marks the latest Amazon move against city, state, and national taxes.

The company recently said it would block Australians from purchases on its international websites after the nation planned to impose a 10 percent consumption tax on online retailers for goods shipped to Australia.

The tax debate comes as 20 cities vie to lure the company's second headquarters and as it expands its workforce in Boston and Vancouver, British Columbia.

Cities have offered lavish tax breaks and incentives to lure the company and its promise of adding tens of thousands of high-paying jobs. Critics have said it is wrong for a profitable company to push for public money, especially considering the added costs to infrastructure and services the new headquarters would bring.

Seattle's tax would charge companies about $275 per full-time worker each year and raise roughly $48 million a year for affordable housing and homeless services. It would target businesses making at least $20 million in gross revenue and take effect in January.

The liberal city spent $68 million on homelessness in 2017 and plans to spend $78 million this year.

Just days after Durkan signed the ordinance into law, the No Tax On Jobs campaign, a coalition of businesses, announced it would gather signatures to put a repeal referendum on the November ballot.

The campaign has raised about $285,000 in cash contributions, with more employers, including Amazon and Starbucks, pledging nearly $200,000 in additional support.

The coalition is glad the "Seattle City Council has heard the voices of the people loud and clear and are now reconsidering this ill-conceived tax," said John Murray, a spokesman with the No Tax on Jobs campaign.

Councilwoman Teresa Mosqueda, one of four sponsors of the tax, said she could not support repealing the tax without "a replacement strategy to house and shelter our neighbors experiencing homelessness."

"We cannot wait months or until next year for another proposal or process while people are sleeping in our parks and on our streets," she said in a statement.

Councilwoman Kshama Sawant said on Twitter that the repeal "is a capitulation to bullying by Amazon" and other big business" and called it a "backroom betrayal" that didn't involve her office.

The clash over who should pay to solve a housing crisis exacerbated by Seattle's rapid economic growth was marked by weeks of raucous meetings and tense exchanges that didn't abate after the tax was approved.

Opponents called the Seattle measure a tax on jobs and questioned whether city officials are spending current resources effectively. Others praised the tax as a step toward building badly needed affordable housing.

The Seattle region had the third-highest number of homeless people in the US and saw 169 homeless deaths in 2017.

This story was reported by the Associated Press.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Amazon strikes back at Seattle business tax aimed to combat homelessness
Read this article in
https://www.csmonitor.com/USA/2018/0612/Amazon-strikes-back-at-Seattle-business-tax-aimed-to-combat-homelessness
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe