Starbucks joins Amazon, lambasting Seattle's new head tax on top-grossing companies

15 May, 2018, 22:38 | Author: Shannon Aguilar
  • King County Executive Dow Constantine delivers the 2017 State of the County address in Auburn

On Monday, the Seattle City Council passed a "head tax", which starting in 2019 will be imposed on the city's largest employers, including Amazon, which CNNMoney reports is Seattle's largest private-sector employer.

The head tax is a $275 tax per employee for larger companies with more than $20 million in annual revenue. That "head tax" is estimated to raise about $48 million - which authorities are marking for housing and homeless services. The council also included a sunset provision that would require the tax to be reauthorized in five years.

Amazon, Starbucks, and business groups sharply criticized the council's decision after Monday's vote. But its most vocal critic may have been Amazon, which threatened to stop construction on new facilities in the city and put 7,000 jobs on hold over the tax proposal.

She had offered an amendment to essentially cut the original $75 million tax proposal in half, but her proposal was rejected last Friday.

Seattle-based Starbucks had harsh words for its hometown leaders. "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".

But worker and church groups and others cheered the tax as a step toward building badly needed affordable housing in an affluent city where the income gap continues to widen and lower-income workers are being priced out.

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 a year ago alone.

However, with Mayor Jenny Durkan threatening to veto the tax because she was concerned about its impact on employment, the measure had to be watered down to pass.

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Proponents of the tax say too many people are suffering on the streets, and while city-funded programs found homes for 3,400 people past year, the problem deepens. King County, which includes Seattle, recorded a record 169 homeless deaths a year ago. A point-in-time count past year tallied more than 11,600 homeless people in King County.

"This legislation will help us address our homelessness crisis without jeopardizing critical jobs", Ms. Durkan said in a statement. Representatives of businesses warned that the tax would drive employers out of town, while others speakers questioned whether Seattle's city government could be trusted to spend the additional tax revenue wisely.

The unanimous vote in favor of the amended tax proposal occurred at a raucous public meeting at which advocates for the homeless and affordable housing - some holding placards saying "Tax Amazon" - argued in favor of a stiffer tax on the company and other businesses.

"We remain very apprehensive about the future created by the council's hostile approach and rhetoric toward larger businesses, which forces us to question our growth here", Herdener said.

"City of Seattle revenues have grown dramatically from $2.8B in 2010 to $4.2B in 2017, and they will be even higher in 2018".

But he said Herdener then went on to suggest Amazon's expansion in the city may be curtailed.

The city's homeless population is growing, behind only NY and Los Angeles.

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