Arthur J. Villasanta – Fourth Estate Contributor
Seattle, WA, United States (4E) – Led by Amazon CEO Jeff Bezos, big business has succeeded in bullying Seattle into slashing by a half a new tax measure that would have funded homeless services in the city.
The Seattle City Council passed a contentious new “per job tax” on big businesses on May 14 to help address the city’s growing homelessness problem. Seattle Mayor Jenny A. Durkan (D) will sign the compromise measure, which passed unanimously. The measure will impose an annual tax of $275 on each employee at businesses making at least $20 million a year in revenue. The compromise tax will end after five years, unlike the initial proposal, which had no end date.
The initial proposal, which called for a $500 per employee tax, was met with vociferous opposition from Amazon and many businesses in Seattle. To emphasize its distaste for the new tax, Amazon took the unusual step of halting construction plans on its expansion. It also halted work at a development site in the northern end of downtown Seattle and promised it will forgo additional leased space if the council approved the tax.
Under the original proposal, Amazon would have paid an estimated $20 million to $25 million in the first year of the tax. That figure would have risen when the funding mechanism transitioned to a payroll tax. The company made about 80 times that, $1.6 billion, in net first-quarter profits.
Mayor Durkan expressed reservations about the effect the $500 per job tax might have on the city’s economy. She also threatened a veto and vowed to work toward a compromise, leading to the $275 rate. The measure is expected to raise some $47 million annually to help house and serve homeless residents, as opposed to $75 million under the initial proposal.
Seattle and King County declared a state of emergency over homelessness in 2015, but cost-of-living pressures have worsened since that time. The number of homeless students in the city’s public schools has tripled to nearly 4,300 students last school year. Seattle home prices are rising faster there than anywhere else in the country. The median price for a house is now $777,000.
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