Seattle Council OKs Lower $50M Annual Head Tax On Big Biz

Protesters attend the Seattle City Council finance committee meeting Friday May 11. The committee voted 5-4 to reject Mayor Jenny Durkan’s proposal of a more modest tax on large employers to address the city’s homelessness crisis.(Steve Ringman  The

Seattle To Vote on Controversial Head Tax on Amazon, Others

The tax will amount to $275 a year per full-time employee in Seattle.

After the council began considering the tax earlier this month, Amazon took the unusual step of halting construction plans on its expansion, putting the brakes on a development site in the northern end of the city's downtown and vowing that it would forgo additional leased space if the council moved forward. And, they made noises about looking at other cities for it's second corporate headquarters site and other operations as well.

The compromise approval - even without a ban on so-called "sweeps" and far from the originally proposed $500 per employee mark, let alone Sawant's bid for $1,000 - also yielded a major victory to the Socialist Alternative leader and activists calling for large companies to do more to address social issues in the cities in which they do business.

They voted as people packed the meeting, holding signs saying "People before profits" and chanting "housing is a human right".

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

Amazon has the backing of the Seattle Times editorial board, which has called the proposed tax a "symbolic "eat the rich" gesture", that it contends would harm workers.

"The city does not have a revenue problem - it has a spending efficiency problem", Herdener said. "So you're either well-off and hungry or homeless and well fed".

Other unions, including the Service Employees International Union, supported the tax.

"People are dying on the doorsteps of prosperity", Councilmember Teresa Mosqueda said in the meeting.

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"As a union rep, we meet with our employers to discuss our problems and come up with solutions jointly", Bufford said.

Councilmember Kshama Sawant cast the only "no" vote Monday on an amendment that reduced the size of the tax.

Some opponents of the measure called for greater accountability on how funds addressing homelessness are spent.

In recent years the city has experienced an economic boom, but in tandem with that also an acute affordable housing and homelessness problem.

"The spending keeps going up and we're not seeing results". A count a year ago found King County's homeless population to have reached more than 11,000, and a pro bono report issued last week by McKinsey & Co. for the Seattle Chamber of Commerce found that it would cost about $400 million to address the shortage of affordable housing in the area. The Seattle region had the third-highest number of homeless people in the US and saw 169 homeless deaths a year ago. The median price for a house is now $777,000. It found that a lack of coordination between Seattle, surrounding cities, and the county creates inefficiency in the region's homeless response.

That's down from the $75 million a year the original proposal would have generated by imposing a $540 head tax per employee for the next few years, after which it would be converted to a 0.7% payroll tax. Healthcare companies are exempt, as are non-profits.

On Friday, city council members approved a proposal to charge the large employers in the city $500-per-employee.

He said he was anxious about the effect the larger tax would have had on jobs in part because of concern over how the money would be spent.

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