Seattle Passes Tax on Big Business to Fight Homelessness

Gladys Abbott
May 15, 2018

Amazon (AMZN) unexpectedly halted a large expansion in Seattle earlier this month, when the e-commerce giant said it would hold off until the outcome of a proposed tax that would affect it and about 600 businesses was known. The measure is expected to raise an average of $47 million annually to help house and serve homeless residents, as opposed to $75 million under the initial proposal.

When the city council was considering a head tax a year ago, councilmembers were unable to agree on an employee-hours tax of 6.4 cents per employee per hour, which would have generated about $25 million annually.

The head-tax debate has been extremely divisive, with opposition questioning the need for more revenue for housing and homeless services, saying the city should do a better job of spending the funds it already has.

If council members vote as they did to advance the tax, the mayor would then have to decide on whether to sign it into law, let it become law or veto it.

Councilmember Teresa Mosqueda said she also doesn't support sweeps, but didn't feel the amendment supported the unified message they had sent with their vote on the tax.

"As a union rep, we meet with our employers to discuss our problems and come up with solutions jointly", Bufford said.

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The councilmember said Bezos becomes $275 million richer every day. After that, it would have risen to an estimated $39 million a year.

The collected revenue would be used to address the civil state of emergency over homelessness that the city has been in since 2015. A point-in-time count previous year tallied more than 11,600 homeless people in King County. Seattle home prices are rising faster there than anywhere else in the country. This revenue increase far outpaces the Seattle population increase over the same time period. Two areas considered favorites by analysts for the second Amazon headquarters, Boston and Washington, D.C., have experienced their own surges. A count past year found King County's homeless population to have reached more than 11,000, and a pro bono report issued last week by McKinsey & Co. for the Seattle Chamber of Commerce found that it would cost about $400 million to address the shortage of affordable housing in the area.

"It seems to me this debate is about the anger or fear at what the city is becoming", said Council President Bruce Harrell, who had to warn members of the crowd after repeated yelling and chanting during the proceedings.

For her part, Durkan said the limited tax would "address our homelessness crisis without jeopardizing critical jobs". Denver has enacted a similar tax, and Chicago had one but repealed it. Seattle itself had a head tax in effect from 2006 to 2009 but it was repealed to help businesses in the midst of the recession.

Scruggs reported from Seattle.

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