June 15, 2018
A few weeks after enacting a “head tax” on the city’s major businesses, Seattle’s City Council has repealed it. The tax, which would have taken effect Jan. 1, 2019, drew especially vocal opposition from Amazon.
The e-commerce giant had threatened to shelve plans to build an additional office tower at its headquarters campus when a per-employee tax of $500 per year was initially proposed. Even after the tax on Seattle businesses grossing more than $20 million per year was scaled back to about $275 per employee per year, Amazon warned, “the council’s hostile approach and rhetoric toward larger businesses… forces us to question our growth here.”
After Tuesday’s vote by the City Council, Amazon VP Drew Herdener applauded the repeal as “the right decision for the region’s economic prosperity.” In the interim, Amazon had contributed $25,000 to a campaign organized by the Downtown Seattle Association, as did Starbucks, also headquartered there. The campaign also collected about 46,000 signatures, or more than twice the 17,000 needed to put a repeal to a vote.
Proponents of the “head tax” saw the levy as a means of raising funds to combat the city’s homelessness. The Seattle metro area contains the nation’s third-largest concentration of homeless people.
Furthermore, advocates see Seattle’s homeless issue as an extension of its affordability crisis. Median home prices in Seattle have increased to $820,000, and 41% of the city’s renters pay out one-third or more of their income to cover housing costs.
The enactment of the “head tax” and its aftermath also drew attention from outside the region. Reuters reported that in May, about 40 elected officials from across the country, some from local governments that are on Amazon’s shortlist to host its second headquarters, published an open letter to Seattle supporting the head tax, and expressing concern that Amazon opposed the measure.
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