Ama­zon flexes mus­cles, Seat­tle backs down on busi­ness tax

The Myanmar Times - - International / Business -

CITY lead­ers said they plan to re­peal a tax on large com­pa­nies such as Ama­zon and Star­bucks as they face mount­ing pres­sure from busi­nesses, an about-face just a month af­ter unan­i­mously ap­prov­ing the mea­sure to help pay for ef­forts to com­bat a grow­ing home­less­ness crisis.

The quick sur­ren­der showed the power of Ama­zon to help rally op­po­si­tion and ag­gres­sively push back on taxes at all lev­els of govern­ment, even in its af­flu­ent home city where the in­come gap is ever widen­ing and lower-in­come work­ers are be­ing priced out of hous­ing. It has re­sulted in one of the high­est home­less­ness rates in the U.S.

Ama­zon and other busi­nesses had sharply crit­i­cized the tax, and the on­line re­tailer even tem­po­rar­ily halted con­struc­tion plan­ning on a new high­rise build­ing near its Seat­tle head­quar­ters in protest.

Mayor Jenny Durkan and seven of nine City Coun­cil mem­bers said Mon­day they worked with a range of groups to pass a mea­sure last month that would strike a bal­ance be­tween pro­tect­ing jobs and sup­port­ing af­ford­able hous­ing.

But a coali­tion of busi­nesses is work­ing to get a ref­er­en­dum on the Novem­ber bal­lot to over­turn the tax.

In a state­ment Durkan and the coun­cil mem­bers said “it is clear that the or­di­nance will lead to a pro­longed, ex­pen­sive po­lit­i­cal fight over the next five months that will do noth­ing to tackle our ur­gent hous­ing and home­less­ness crisis.”

They said they would move for­ward to re­peal the so-called head tax. A spe­cial coun­cil meet­ing is sched­uled Tues­day, where a vote is ex­pected. They didn’t pro­vide a backup fund­ing plan.

It marks the lat­est Ama­zon move against city, state and na­tional taxes.

The com­pany re­cently said it would block Aus­tralians from pur­chases on its in­ter­na­tional web­sites af­ter the na­tion planned to im­pose a 10 per­cent con­sump­tion tax on on­line re­tail­ers for goods shipped to Aus­tralia.

The tax de­bate comes as 20 cities vie to lure the com­pany’s sec­ond head­quar­ters and as it ex­pands its work­force in Bos­ton and Van­cou­ver, Bri­tish Columbia.

Cities have of­fered lav­ish tax breaks and in­cen­tives to lure the com­pany and its prom­ise of adding tens of thou­sands of high-pay­ing jobs. Crit­ics have said it is wrong for prof­itable com­pany to push for pub­lic money, es­pe­cially con­sid­er­ing the added costs to in­fra­struc­ture and ser­vices the new head­quar­ters would bring.

Seat­tle’s tax would charge com­pa­nies about $275 per full-time worker each year and raise roughly $48 mil­lion a year for af­ford­able hous­ing and home­less ser­vices. It would tar­get busi­nesses mak­ing at least $20 mil­lion in gross rev­enue and take effect in Jan­uary.

The lib­eral city spent $68 mil­lion on home­less­ness in 2017 and plans to spend $78 mil­lion this year.

Just days af­ter Durkan signed the or­di­nance into law, the No Tax On Jobs cam­paign, a coali­tion of busi­nesses, an­nounced it would gather sig­na­tures to put a re­peal ref­er­en­dum on the Novem­ber bal­lot.

The cam­paign has raised about $285,000 in cash con­tri­bu­tions, with more em­ploy­ers, in­clud­ing Ama­zon and Star­bucks, pledg­ing nearly $200,000 in ad­di­tional sup­port.

The coali­tion is glad the “Seat­tle City Coun­cil has heard the voices of the peo­ple loud and clear and are now re­con­sid­er­ing this ill-con­ceived tax,” said John Mur­ray, a spokesman with the No Tax on Jobs cam­paign.

Coun­cil­woman Teresa Mosqueda, one of four spon­sors of the tax, said she could not sup­port re­peal­ing the tax with­out “a re­place­ment strat­egy to house and shel­ter our neigh­bors ex­pe­ri­enc­ing home­less­ness.”

“We can­not wait months or un­til next year for an­other pro­posal or process while peo­ple are sleep­ing in our parks and on our streets,” she said in a state­ment.

Coun­cil­woman Kshama Sawant said on Twit­ter that the re­peal “is a ca­pit­u­la­tion to bul­ly­ing by Ama­zon” and other big busi­ness” and called it a “back­room be­trayal” that didn’t in­volve her of­fice.

The clash over who should pay to solve a hous­ing crisis ex­ac­er­bated by Seat­tle’s rapid eco­nomic growth was marked by weeks of rau­cous meet­ings and tense ex­changes that didn’t abate af­ter the tax was ap­proved.

Op­po­nents called the Seat­tle mea­sure a tax on jobs and ques­tioned whether city of­fi­cials are spend­ing cur­rent re­sources ef­fec­tively. Oth­ers praised the tax as a step to­ward build­ing badly needed af­ford­able hous­ing.

The Seat­tle re­gion had the third­high­est num­ber of home­less peo­ple in the U.S. and saw 169 home­less deaths in 2017.

‘It's no longer a ques­tion of just Syria. It has a lot to do with his per­sonal cred­i­bil­ity.’ Aaron David Miller For­mer Mid­dle East

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