Following backlash, Seattle nixes corporate tax
Levy on big companies meant to help homeless
SEATTLE — Seattle leaders on Tuesday repealed a tax on large companies such as Amazon and Starbucks after a backlash from businesses, a stark reversal from a month ago when the City Council unanimously approved the effort to combat a growing homelessness crisis.
A divided crowd chanted, jeered and booed at the council meeting, drowning out the leaders as they cast a 7-2 vote. People shouted, “Stop the repeal,” as others unfurled a large red banner that read, “Tax Amazon.” An opposing group held “No tax on jobs” signs.
The tax was proposed as a progressive revenue source aimed at tackling one of the nation’s highest homelessness numbers.
Businesses and residents demanded more accountability on how Seattle funds homelessness and housing and said the city should take a regional approach to the problem. Many worried that Amazon and others would leave the city.
The online retailer even temporarily halted construction planning on a new high-rise building near its Seattle headquarters in protest.
The company is “deeply committed to being part of the solution to end homelessness in Seattle,” Drew Herdener, an Amazon vice president, said in a statement.
City leaders underestimated the frustration and anger from residents, businesses and others over not just a tax increase but also a growing sense that homelessness appears to have gotten worse.
It poured $68 million into the effort last year and plans to spend more this year. The tax would have raised roughly $48 million annually.
But a one-night count in January found more than 12,000 homeless people in Seattle and the surrounding region, a 4 percent increase from the previous year.
Many supporters called the repeal a betrayal and said the tax was a step toward building badly needed affordable housing.
Several leaders, including three who sponsored the legislation but voted to repeal it, lamented the reversal and conceded they didn’t have the resources to fight the referendum.
Councilwoman Lisa Herbold said it “was truly our best option” and that she repealed it with a heavy heart. She lashed out at business interests for blaming the problems on government inefficiencies.
Councilwoman Teresa Mosqueda voted against the repeal, saying the lack of a replacement strategy would mean more months of inaction.
Denise Moriguchi, chief financial officer at Asian grocery store chain Uwajimaya, told the council that she doesn’t like seeing people living in tents but that the tax would hurt small businesses.
Seattle’s so-called head tax would have charged companies about
$275 per full-time worker each year to fund affordable housing and homeless services. It targeted nearly 600 businesses making at least
$20 million in gross revenue and would have taken effect next year.