Starbucks, Amazon Blast Seattle's Tax Plan Targeting Large Employers

16 May, 2018, 07:57 | Author: Terri Saunders
  • King County Executive Dow Constantine delivers the 2017 State of the County address in Auburn

A divided Seattle City Council is expected to vote Monday on a proposal to tax large businesses to fight homelessness. The tax, on companies with more than $20 million in receipts, will amount to about $275 per employee and is intended for use in improving conditions for the city's homeless. Leading up to the vote, it campaigned vigorously against the measure, temporarily halting planning for a 17-story office building in the city and saying it might sublease - rather than occupy - a skyscraper already under construction. For her part, Mayor Durkan had originally proposed a goal of collecting $40 million annually.

Durkan should have consulted a fellow former appointee of President Obama, Chicago Mayor Rahm Emanuel. The mayor instead proposed a tax of $250 per employee. Kshama Sawant was the sole non-sponsor.

When a council vote is 5 to 4 and a veto hangs in the balance, talk inevitably turns to "swing votes"-that is, who can be swayed to join the council majority to make the bill veto-proof?" Under the approved ordinance, there will be no payroll tax.

Without naming Sawant, Juarez offered a retort.

The modified tax should generate some $50 million, much of which will be dedicated to "deeply affordable" housing in the city to be made available to people below the poverty line, with some going to emergency shelters and other social services.

It has been watched closely by other cities amid a highly publicized search for a second North American headquarters by Amazon, the world's largest online retailer with first-quarter revenues of almost $50 billion.

"I've been really struggling with how I feel about this compromise because I've been really, really focused on the spending plan and the dire needs of our communities", co-sponsor of the original legislation Lisa Herbold said before the vote.

There's nothing quite like Seattle's "head tax" on the horizon in Boston, but city officials are considering raising affordable housing requirements for new buildings. About $2 million would fund rental subsidies for people making between 0 to 30 percent of the area median income.

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The battle between Amazon and head tax supporters may also be watched closely by cities in North America that have been courting the company for its second headquarters. Well, by taxing businesses of course.

González said she had hoped to be voting "on a different package" with more money, but "I'm glad to be able to finally move this forward".

The coffee giant is just one of an estimated 585 Seattle-based employers that will be hit by the so-called 'head tax.' Those companies represent about 3% of all Seattle businesses, according to Council estimates, with each bringing in annual revenue of $20 million or more in the city.

"Will Amazon unpause Block 18 if $275 passes?"

"They're driving this economic engine", he said.

"It seems only fair that as so many struggle to make their way through a tax system that's rigged in favor of large corporations, that we ask those same corporations to financially contribute to the public health and housing solutions created to address those consequences", they wrote.

"When we start talking about changing that system that benefits some to make it more fair, there's a lot of resistance", Councilmember Mike O'Brien said during Monday's meeting.

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