Thursday, 21 June, 2018

Seattle to decide on business tax to fight homelessness

Mayor Jenny Durkan attends the Washington Women in Trades job fair at Seattle Center on Friday Mayor Jenny Durkan attends the Washington Women in Trades job fair at Seattle Center on Friday
Nellie Chapman | 15 May, 2018, 09:34

A divided Seattle City Council is expected to vote Monday on a proposal to tax large businesses to fight homelessness. The new tax will take effect in 2019.

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Businesses and others who say the tax is misguided and potentially harmful question whether the city is effectively using the tens of millions of dollars it already spends on homelessness each year.

Companies that gross $20 million or more a year will now face an annual tax of $275 per employee.

Councilmember Lorena Gonzalez says she has negotiated with Mayor Jenny Durkan and her staff on a new amendment. However, a tax on jobs at any level is bad economic policy and will negatively impact Seattle's economy and city tax revenues.

The mayor has expressed concern about the potential ramifications on workers in the building and retail industries if Amazon permanently pulls the plug on its planned construction in Seattle.

In response to the plan, internet giant Amazon threatened to stop work on a 17-story tower it was building near its South Lake Union district corporate headquarters.

Seattle Council member Kshama Sawant has repeatedly called Bezos a "bully" who attempted to extort the city by halting its construction plans. The city council would need to review the tax, which kicks in next year, after five years if the city wants to extend it. Past year 169 homeless people died in the city where winter temperatures can fall to minus 7 degrees.

Nevertheless, the company is "disappointed by today's City Council decision to introduce a tax on jobs", Amazon Vice President Drew Herdener said in a statement.

Council member Lisa Herbold, one of the tax's sponsors, said she grappled with the compromise package given how many people are struggling but that it was the "strongest proposal" they could bring forward.

"By threatening Seattle over this tax, Amazon is sending a message to all of our cities: we play by our own rules", the letter said.

Over the weekend, reports the Seattle Times, the major worked with city council members to create a revised proposal that would charge the $275.

Almost 600 employers with gross revenues of more than $20 million - including Starbucks and Amazon - will be expected to pay the charge in Seattle from next year onwards.

Underscoring Amazon's battle with its hometown is the company's search for a second headquarters in another North American city.

The Seattle metropolitan area also is home to the third-largest concentrations of homeless people, nearly 12,000 counted in a January U.S. government survey, and almost half of them were living on the streets or otherwise unsheltered. Previous year the city spent $68 million on homeless services.

John Boufford with the International Union of Painters and Allied Trades said he didn't understand rhetoric against Amazon, which he noted provides good jobs for thousands of people.