After Seattle City Council had unanimously voted to pass a ‘head tax’ on big businesses in the city in early May to help address Seattle’s problem with homelessness, the tax has been repealed.
The head tax, which was initially passed on May 10th by the City Council, targeted big businesses in Seattle – namely those making $20 million a year. Each of these businesses, which constitute only 3 percent of all businesses in Seattle, were required to pay $500 per employee in ‘head tax’. Big businesses like Amazon and Starbucks, however, were not pleased.
After the bill was announced in March, Amazon halted construction of a skyscraper in downtown Seattle, threatening to instead lease another building. In response, the City Council agreed to lower the head tax from $500 per employee to $275, bringing the projected tax revenue down from $75 million to $40 million per year.
In response to the bill, both Amazon and Starbucks spearheaded an anti-tax campaign, promising groups supporting the anti-tax campaign some $25,000 each.
When Seattle’s city council initially announced the head tax, it had suggested the tax revenue would be funneled into services and housing for the city’s homeless, which Seattle has already spent $68 million on to little avail.
Seattle Mayor Jenny Durkan was quick to reel back on the bill and engaging in a political feud with the Council and big business. Instead she said she wants to “[focus] on building real partnerships that align our strategies from business, advocates, philanthropy.”
President & CEO of Seattle’s Metro Chamber of Commerce, Marilyn Strickl, also got behind repealing the head tax, saying in a statement, “From day one, the Seattle Metro Chamber has been clear that a tax on jobs is not the way to address the regional homelessness crisis.”
Amazon is currently Seattle’s biggest employer, responsible for 45,000 employees. In a tweet, Vice President of Amazon, Drew Hardener, expressed his delight in the repeal of of the “tax on job creation” and emphasized Amazon was deeply committed to “[ending] homelessness in Seattle.”
Business owners in Seattle have also voiced their frustration with city leadership’s lack of transparency in regard to city spending. But the reality of the matter is that while the city had intended for the head tax to serve Seattle’s homeless, some are saying the proposed tax revenue was just to plug another hole in the city’s budget.
According to KUOW, Seattle has already been spending money earned from construction in the city on addressing its problem with homelessness. With dwindling funds, the city needs money just to stay afloat. The head tax could have been that lifeline while alienating Amazon and potentially hurting growth in the city.
And although accountability and transparency remains a necessary characteristic of effective city leadership, some Seattleites are drawing attention to the influence of big business on public and urban policy in the city.
Council members Teresa Mosqueda and Kshama Sawan both voted against the repeal. Sawant called it a “cowardly betrayal of the needs of working people,” saying it was “capitulation and it’s a betrayal.
“We have to understand that the logic of bowing to big business points only in one direction, to a race to the bottom for the rest of us,” she said. “It is also a kowtowing to corporate politicians like Jenny Durkan.”
Amazon is currently heading a campaign to find a city to host its second headquarters dubbed “HQ2,” sending cities across the United States in a frenzy. Many, however, are worried about the future impact a second headquarter can have on a city elsewhere in the U.S.