Published: Tue, May 15, 2018
Finance | By Gustavo Carr

Amazon questions its Seattle future after head tax passes

Amazon questions its Seattle future after head tax passes

Overcoming weeks of extortionist threats and other forms of "corporate bullying" from the world's largest retailer, Seattle's City Council on Monday unanimously approved a new tax on Amazon-which paid nothing in federal income taxes last year-and other major companies in an effort to provide essential services for the homeless and combat the local housing crisis.

Two of Seattle's top employers are taking the gloves off and pulling no punches in the wake of a newly passed tax on companies making more than $20 million a year in the city.

The plan approved by the council represents a compromise from the original version which would have taxed companies $500 per employee and raised $75 million a year. It would raise about $48 million a year to pay for affordable housing and homeless services. Under the amended tax, Amazon will be on the hook for about $11 million annually, rather than the $20 million that the original proposal would have levied.

The collected revenue would be used to address the civil state of emergency over homelessness that the city has been in since 2015. The head tax is the largest in US history.

"Big businesses like Amazon have many tactics to avoid paying their fair share of taxes, and it has required true dedication and sacrifice from hundreds of us to bring us to this point". In Denver, there is a $50-per-year tax for a full-time employee, while Chicago Mayor Rahm Emanuel scrapped the Windy City's tax after calling it a job killer.

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.

"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". She said she ultimately supported the compromise because it creates "a significant new revenue stream" to build more affordable housing. After that, it would have risen to an estimated $39 million a year.

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Shannon Brown, who has been living a tiny home at a south Seattle homeless encampment, said there's simply not enough housing for the city's poorest people.

The tax is expected to be borne by about 500 companies, accounting for 3 percent of the city's private sector.

The city spent $68 million on homelessness a year ago, according to NBC.

González said she had hoped to be voting "on a different package" with more money, but "I'm glad to be able to finally move this forward".

"We are disappointed by today's City Council decision to introduce a tax on jobs", Amazon commented via statement.

Even though the company chose 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".

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