Seattle City Council passes $275 employee tax

Lloyd Doyle
May 16, 2018

Given that there is hot competition from other American cities to become home to Amazon's second headquarters, this stated apprehension about the Seattle's business climate, should give Seattle's City Council pause. Tensions are still high. Sponsors of the tax said Seattle's biggest-earning businesses should bear some burden for easing a shortage in low-priced housing that they helped create by driving up real estate prices to the point where the working poor and many middle-class families can no longer afford to live in the city. "I'm pleased my council colleagues also agreed to exempt hospitals and non-profits from this tax, recognizing the vital work they do in our community serving those on Medicare, Medicaid, and other vulnerable populations".

The tax also would hit such Seattle-based stalwarts as coffee retailer Starbucks and department store chain Nordstrom, as well as California-based tech giants like Apple, Google and Facebook that have enough of a presence in Seattle that they would be subject to the new levy.

After getting moved to a vote by the city's Finance and Neighborhoods Committee (passed narrowly 5-4), Seattle Mayor Jenny Durkan released a statement that she could not support the tax. The measure would generate an estimated $47 million annually.

While the politics may be fractious, the gravity of Seattle's housing crisis is well understood.

Matt Dubin, attorney and candidate for State Representative in the 36 district, said the tax proposal will do little to solve the homelessness problem but would further divide the community. The Institute for Children, Poverty & Homelessness found that in the 2015-2016 school year, one in 16 children in Seattle were homeless.

"Today's action creates more affordable housing, addresses immediate needs of those living unsheltered and has a five-year sunset so we can effectively measure our efforts". On Monday the city slapped large companies with a new employee head tax to address the city's homelessness problem.

Encouraging endeavors such as Mary's Place might be a better, non-coercive way to enlist companies to help with the city's homelessness.

The tax has been dubbed the "Amazon Tax" by locals.

Sawant would be wiser to regard Amazon's response not as extortion but as a harbinger of things to come, if the anti-business climate persists.

The result is a new tax of $275 per employee per year on companies grossing at least $20 million per year. Other prominent firms that are affected include Starbucks, The Seattle Times, and longtime, family-owned supermarket Uwajimaya. The city spent $68 million on homelessness last year and plans to spend even more this year. This week on Decrypted, Bloomberg Technology's Karen Weise and Brad Stone explore this showdown between one of the world's largest companies and a city that has experienced both the benefits and drawbacks of Amazon's meteoric growth.

Amazon criticized the new tax in a blistering statement from vice president Drew Herdener. Starbucks, which had fourth-quarter profits past year of $788.5 million, was also loud in its opposition.

Supporters cite data showing Seattle's median home prices have soared to $820,000, and more than 41 per cent of renters in the city ranked as "rent-burdened", meaning they pay at least 30 per cent of their income on housing.

"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", says Starbucks' John Kelly, a top public-affairs executive. Denver is one of the 20 cities still in the running for Amazon's second headquarters.

Seattle's rapid economic growth has led to increasing prices and a housing crisis, as rent prices are going up leading more and more people to not being able to afford them, making it the third region with the highest number of homeless people in he U.S.

Other reports by Iphone Fresh

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