Starbucks, Amazon tee off on Seattle's new head tax

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

After copious meetings and negotiations, the Seattle City Council on May 14 reached a compromise for an employee-hours tax for affordable housing development and homeless services.

The City Council unanimously passed a compromise plan Monday that taxes businesses making at least $20 million in gross revenues about $275 per full-time worker each year - lower than the $500 per worker initially proposed.

Mayor Jenny Durkan said that Seattle now spends about $70 million in annual direct investments to programs that fight homelessness in her first State of the City address.

As Common Dreams reported earlier this month, Amazon paused construction of a major expansion of its headquarters in Seattle pending the outcome of the tax vote and has repeatedly threatened to leave the city if it dares to demand more in taxes to fund badly needed affordable housing projects.

Even though the company made a decision to resume one of its building projects, Drew Herdener, an Amazon vice president, said in a statement, "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". They called it a tax on jobs and questioned whether city officials were spending current resources effectively.

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"We have community members who are dying", Councilmember Teresa Mosqueda before the 9-0 vote.

Proponents of the head tax say companies such as Amazon have contributed to homelessness because their highly-paid employees have driven up rents and home prices.

District 3 Councilmember Kshama Sawant had been rallying for a head tax that would raise the full $150 million, but was never able to garner enough support from fellow councilmembers.

Marilyn Strickland, president and CEO of the Seattle Metro Chamber, voiced business leaders' opposition to the tax.

Herdener then turned the tables, suggesting the people holding the city's purse strings are the problem. "This City pays more attention to the desires of the owners of illegally parked RVs than families seeking emergency shelter", John Kelly, senior vice president, Global Public Affairs & Social Impact at Starbucks, said in a statement.

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The city councilors who sponsored the new tax said it was time for the company to pay its fair share. "If they can not provide a warm meal and safe bed to a 5-year-old child, no one believes they will be able to make housing affordable or address opiate addiction".

"This was a tough debate in our city", she said.

"They're driving this economic engine", he said. The tax would end after five years unless renewed by the city.

"While we have resumed construction planning for Block 18, 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", part of the statement reads, Herdener adding that the city "does not have a revenue problem - it has a spending efficiency problem". Today, it has workers in more than 40 buildings and occupies one-fifth of Seattle's first-class office space, totaling more than 10 million square feet.

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