Seattle OKs taxing companies like Amazon to aid the homeless

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 OKs taxing companies like Amazon to aid the homeless

Starbucks and Amazon are now blasting the decision to slap a new "head tax" on businesses to pay for homeless services and affordable housing - saying the government's own lack of efficiency is to blame for the city's woes.

The tax, which has been unofficially nicknamed the "Amazon Tax", - named after the online retailer which is headquartered in Seattle - will affect businesses that generate annual revenue of $20 million or more, the Seattle Times reported.

"Our goal is to have a successful and vibrant business community - one of the best in the country - and at the same time, assist our most vulnerable and strategically invest in affordable housing", Council President Bruce Harrell said in a statement.

Republican State Senator Mark Schoesler says he will be taking action against the tax, introducing legislation that says it is an unauthorized tax unless approved by legislature, which "reinforces current law". The funds from the so-called "head tax" will go toward affordable housing and homeless services.

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City coffers are expected to receive around $48million per year under the new proposal, down from $80million under the original.

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 has ignited something of an existential debate for Seattle over its monumental growth.

Almost 600 large employers - roughly 3 percent - would pay the tax starting in 2019.

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González said she was pleased to have the support of nearly every councilmember - Sawant did not support the amendment, but ended up voting in favor of the tax - but disappointed she couldn't find support for more. The 17-story building, which will have 1 million square feet of office space, is meant to house between 7,000 and 8,000 new employees.

Overall, around three percent of Seattle businesses will be hit by the tax, which is set to last for five years. Four bill sponsors initially pitched a tax of $500 per full-time employee a year but a compromise proposal emerged over weekend after they couldn't muster the six votes needed to override a potential veto by Mayor Jenny Durkan. 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. The Seattle region had the third-highest number of homeless people in the United States and saw 169 homeless deaths past year.

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". A point-in-time count past year tallied more than 11,600 homeless people in King County.

Supporters of the tax say that large companies such as Starbucks and Amazon have contributed to Seattle's homelessness by driving up rent and home prices.

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While Amazon has resumed construction planning on the downtown building, he said "we remain 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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