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

16 May, 2018, 07:55 | Author: Samuel Sharp
  • Seattle City Councilmembers debate dueling head-tax proposals on Friday May 11

To tackle the problem of homelessness in the city, the Seattle city council has plans to increase taxes on big businesses and in talks to put this to an initial vote on Friday.

The tax plan applies to firms in the United States city who have an income of over $20 million and amounts to an extra 14 cents in tax per hour worked by each employee under the companies who are large enough to be eligible - around 500 in total. "If they can not provide a warm meal and safe bed to a five year-old child, no one believes they will be able to make housing affordable or address opiate addiction", Kelly said.

Could this tax drive businesses out of Seattle or hinder growth?

Tax proponents have said too many people are suffering on the streets and that the problem is deepening even though city-funded programs found homes for 3,400 people past year.

Amazon criticized the new tax in a blistering statement from vice president Drew Herdener. Sponsors of the tax say the large corporations in the city are causing real estate prices to rise to a point where working poor and middle class families can't afford to live in town.

The vote was passed unanimously, with several council members saying they were voting reluctantly in favour of the lower rate for the tax after Seattle's mayor, Jenny Durkan, threatened to veto a higher rate.

"This progressive revenue stream balances the needs of our small business community, while ensuring we have the funding we need to provide critical housing and health services", said Councilmember Teresa Mosqueda in a statement accompanying the vote.

That's down from the $75 million a year the original proposal would have generated by imposing a $540 head tax per employee for the next few years, after which it would be converted to a 0.7% payroll tax. Seattle should be a place for businesses to come, but the council seems content with passing laws that will shun this city from economic opportunities.

While the city has been adding about 10,000 new apartments a year, a high number compared to Silicon Valley, it is still not enough to house all the new employees coming there to work at Amazon or work in businesses that service the company and its workers. Over 100 Seattle-area businesses, including Alaska Airlines, Expedia and Tableau, have spoken out against the head tax.

As Ed pointed out earlier this month, the battle over the tax is being waged between one of the nation's largest companies and one of the nation's most socialist city councils.

The so-called "head tax" has been hotly debated in recent weeks at raucous meetings and rallies.

The tax is projected to bring the city about $45 million of new annual revenue, according to a spending plan prepared by council staff. And Amazon's hardball politics in Seattle has further soured some local leaders.

The city has the third-largest number of homeless people anywhere in the United States, with 169 people dying out on the streets in the previous year alone. People in the crowd held up signs: "Don't vote our jobs away" or "Tax the rich".

Some residents demanded more accountability and shouted their frustration over what they see is the city's failure to address crime, drug use, camping on sidewalks and in parks, and other problems associated with unauthorized homeless encampments.


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