Seattle is preparing to pass a literal tax on jobs.
On May 14, City Council is scheduled to vote on an “employee head tax,” which would impose a 26 cent levy on every hour worked by an employee at companies making more than $ 20 million a year. The tax would hit between 500 and 600 businesses; it is supposed to raise about $ 75 million a year for homelessness and affordable housing services.
Versions of this proposal have been circulating for a while. They’ve been nicknamed the “Amazon tax”—of that $ 75 million in revenue, $ 20 million is expected come from the online retailer.
Amazon isn’t taking the tax lying down. On Tuesday the company announced that it is pausing construction planning for a 17-story building intended to serve as office space for some 7,000 Amazon employees. Amazon is being uncharacteristically explicit about the reasons for the stall.
“I can confirm that pending the outcome of the head-tax vote by City Council, Amazon has paused all construction planning on our Block 18 project in downtown Seattle and is evaluating options to sublease all space in our recently leased Rainier Square building,” company spokesperson Drew Herdener said in a statement.
Supporters of the tax were incensed at this unintended yet totally predictable consequence of their policy.
“If Amazon generally wants to engage about how they can be part of the solution, we welcome that conversation,” Councilmember Mike O’Brien said Wednesday, according to The Seattle Times. “But we need companies that are profitable and making billions of dollars every year to help with the folks that are being forced out of housing and ending up on the street.”
Councilmember Kshama Sawant—a self-proclaimed socialist who has endorsed the nationalization of another Seattle-area corporate titan, Boeing—was less subtle. Sawant calls Amazon’s refusal to passively accept the taxation “blackmail,” and she organized a Thursday rally outside Amazon’s headquarters.
Despite these protestations, support for the tax is starting to flag.
Business groups have been opposed to the idea from the get-go, arguing that the city should do a better job spending the record revenue it is already raking in before it asks for more.
The goal of the new tax is “simply to raise more money instead of truly solving the homelessness facing our region,” write the heads of the Seattle Chamber of Commerce, the Downtown Association, and the Greater Seattle Business Association (an LGBT business group) in a Seattle Times op-ed, noting that in the past two years the city has increased spending on housing and homelessness by 50 percent only to see a 37 rise in the homeless population.
“It is time to ask: What is behind the dramatic increase in city spending, and what is there to show for it?” they conclude.
These business groups have been joined in their opposition by trade unions.
“To reduce the jobs only increases the possibility of additional homelessness,” Chris McClain of Iron Workers Local 86 tells the Times. His union organized a counterprotest at Sawant’s Amazon demonstration, shouting down pro-tax speakers with chants of “No head tax, no head tax!”
This is not the first time capital and labor have joined hands to fight some of the ideas coming out of Seattle City Hall. Teamsters and retailers both fought in vain to stop the city’s sweetened beverage tax last year.
Vocal opposition from so many corners is encouraging some Seattle politicians to backpedal. Mayor Jenny Durkhan has thrown some shade on the idea of head tax in recent public statements. Some city councilmembers have suggested delaying the scheduled May 14 vote.
Whether this will all be enough to kill the tax plan remains to be seen. But the fight demonstrates a growing weariness among workers and businesses owners when it comes to handing over more tax dollars to a city government that has proven less than adept at putting the money to good use.