Less than a month after passing a plan to raise taxes on large companies based in the city—in order to increase funding for services aimed at the city’s growing homeless population—the Seattle city government scuttled the tax, cowing to pressure from Amazon and Starbucks.
The plan would have taxed companies that made more than $20 million in annual revenue roughly $275 per employee. The so-called “head tax” would have raised $75 million for the city to spend on affordable housing and homeless services.
From the Seattle Times (emphasis added):
The announcement of the proposed repeal comes two weeks after King County’s annual homeless count revealed a 4 percent increase, with a steep rise in people living in their vehicles.
Some service providers, who were anticipating a surge in city homelessness funding from the head tax, lamented the aggressive campaign against the tax.
“The onus is very much on those who fought so hard against this solution to identify a better one, or admit they’re OK with the city having shanty towns and favelas in our public spaces indefinitely,” said Lisa Daugaard, a member of a city task force whose recommendations formed the basis for the head-tax proposal.
In a statement, Seattle Mayor Jenny Durkan said the Seattle City Council abandoned the tax raise after concluding it would lead to a “prolonged, expensive political fight,” but maintained that the city “remains committed to building solutions that bring businesses, labor, philanthropy, neighborhoods and communities to the table.”
That “political fight” starts and ends with Amazon and Starbucks, which both pledged $25,000 to campaign against the head tax. Amazon even threatened to stop construction on its new high-rise office building in downtown Seattle in retaliation. (Both Amazon CEO Jeff Bezos and Starbucks’ outgoing CEO Howard Schultz, are being floated as potential Democratic presidential candidates in 2020.)
King County—which contains the Seattle metro area—has the third-largest homeless population in the country. The concentration of homeless people living in Seattle outpaces larger cities like New York and Los Angeles. Three years ago, local officials declared a state of emergency for homelessness in the city and surrounding area.
Since then, housing inequality in the area has only become more exacerbated, in large part due to well-paid, college-educated workers moving into the area to work for companies like Amazon, which employs roughly 40,000 people in Seattle. (Some math: 40,000 employees * $275 per employee = an $11 million tax increase. Amazon made $1.6 billion in profit in the first three months of 2018 alone. $11 million is 0.68% of $1.6 billion.)
Bezos is the wealthiest man on the planet, but has yet to start his own major philanthropic effort. Unlike his fellow billionaires, Bezos does not have his own charitable foundation to direct giving (his parents, Mike and Jackie Bezos, created their own Bezos Family Foundation, to which their son has given in the past.)
Last year, Bezos sent out this tweet asking his followers to recommend charitable causes he should donate to:
Hey, here’s an idea: How about you agree to pay a little extra in taxes, so that the city your company is based in can provide more services to the people your company helped displace?