Seattle's 'Tax on Jobs' Draws Outrage From Amazon, Starbucks

Amazon warehouse
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May 15, 2018

The Seattle city council approved a new tax on large employers Monday, drawing the ire of the city’s business juggernauts Starbucks and Amazon.

The council unanimously approved a tax that amounts to a yearly tax of about $275 per full-time employee, which came as a compromise after a $500 tax per worker encountered fierce pushback, the Associated Press reported. The tax is intended to combat homelessness and respond to what officials call a housing crisis, one in which rents have risen substantially in recent years.

Amazon threatened to stop work on a 17-story building if the $500 per-employee tax passed, and while the company is not pulling back activity right now, it issued a statement criticizing the "tax on jobs" and saying it may seek to grow elsewhere.

"We are disappointed by today’s City Council decision to introduce a tax on jobs," Amazon Vice President Drew Herdener said in a statement. "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."

Amazon has been considering different cities as the cite of its new headquarters, leading many lawmakers to offer deals to attract the tech giant to their cities. For now, it will continue the construction of a 17-story tower near its hometown headquarters and will continue to lease new office spaced in Seattle.

As Seattle’s homelessness problem has grown and new taxes and spending have been proposed, corporate leaders argue the city’s government is not competent to solve the problems. Herdener blasted the city for its failure to spend money efficiently as tax revenue has climbed.

"City of Seattle revenues have grown dramatically from $2.8 billion in 2010 to $4.2 billion in 2017, and they will be even higher in 2018. This revenue increase far outpaces the Seattle population increase over the same time period," he said. "The city does not have a revenue problem – it has a spending efficiency problem. We are highly uncertain whether the city council’s anti-business positions or its spending inefficiency will change for the better."

Starbucks public affairs chief John Kelley said Seattle "continues to spend without reforming and fail without accountability, while ignoring the plight of hundreds of children sleeping outside."

"If they cannot provide a warm meal and safe bed to a five year-old child, no one believes they will be able to make housing affordable or address opiate addiction," Kelley said.

It is not just the leaders of major companies who question the wisdom of the new tax. John Boufford with the International Union of Painters and Allied Trades said it was confusing Seattle would be "fostering an adversarial relationship with businesses in this city."

"They're driving this economic engine," he said.

But city council members argue corporations have benefitted from the city’s economic growth as others have been left behind. Council member Teresa Mosqueda said the new tax is a "down payment" on the work that must be done in the future.

"People are dying on the doorsteps of prosperity," Mosqueda said. "This is the richest city in the state and in a state that has the most regressive tax system in the country."

The council received vocal support from many in the city who packed its Monday meeting and carried signs reading, "People before profits."

Published under: Amazon , Taxes