Council passes reduced employee-hours tax

Mayor Jenny Durkan attends the Washington Women in Trades job fair at Seattle Center on Friday

After intense lobbying by local businesses and a bold threat by Amazon to curtail development in its hometown, the Seattle City Council on Monday approved a smaller and more limited tax on big companies than originally envisioned.

The ordinance will impose a $275-per-employee tax on for-profit companies in Seattle that make $20 million or more.

"We could not find the votes we needed", he told The Seattle Times.

The council has been debating the so-called head tax for months, and had been considering a higher tax of $500 per employee that would have raised $75 million a year, largely to build about 1,000 new affordable housing units.

The Downtown Seattle Association said in a statement it appreciated Durkan's efforts to modify the original head tax proposal.

Seattle has been in a civil state of emergency over homelessness since late 2015. The head tax is the largest in USA history. 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 tax would end after five years unless renewed by the city. 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.

Following the change, Amazon has said it will now continue construction on the new building but is still considering whether to lease space in a second tower.

"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". Bernie Sanders (I-Vt.), called Monday's vote a "huge victory" and noted that yearly revenue from the new tax on Amazon will be roughly equivalent to what Bezos makes in an hour. It found that a lack of coordination between Seattle, surrounding cities, and the county creates inefficiency in the region's homeless response.

For Seattle's liberal City Council, the discussion Monday centered not so much on whether there should be a head tax but how big it should be. The report states it would take "between $360 million and $410 million a year to tackle current levels of homelessness-that's twice today's spending". The Seattle region had the third-highest number of homeless people in the USA and saw 169 homeless deaths in 2017.

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.

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

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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