Starbucks, Amazon Blast Seattle’s Tax Plan Targeting Large Employers

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People fill a hallway before the Seattle City Council approved a head tax on May 14.

Friday, a council committee approved a veto-vulnerable $500/employee version of the tax.

“When I looked at this new revenue tax stream, I think we have to convince the public that we are using it wisely and strategically, and I think we’ve failed in that regard as a city”, he said. People recognize Seattle as the hub of this area. That’s driven the cost of housing up. And homelessness has exploded. It was publicly opposed by Amazon – the city’s largest private sector employer – and 131 other businesses.

Democratic socialist Councilor Kshama Sawant was the sole vote against the amendment to reduce the tax from $500 to $275 per employee. And a so-called millionaires tax – which would raise state taxes on income above $1 million – could go before voters in November, though the Massachusetts High Tech Council and other business groups are suing to keep it off the ballot. And what’s blown things up here is the threat to jobs. But even if the tax passes tomorrow and Seattle doesn’t leave town, it’s possible that other companies will. Amazon, with 45,000 workers, would take the biggest hit.

The senator believes he can prove the head tax is illegal.

That’s down from the original $500 per employee proposed by Councilors Lorena Gonzalez, Lisa Herbold, Teresa Mosqueda, and Mike O’Brien, which drew Amazon and Durkan’s ire. “I will not impugn the integrity or the motives of any of my colleagues because you are my colleagues”, Juarez said.

UNIDENTIFIED PROTESTER: (Yelling) No head tax. A point-in-time count a year ago tallied more than 11,600 homeless people in King County. Especially as more companies look elsewhere for talent, cities need to remember that building an attractive place for businesses is a marathon, not a sprint.

Jeff Bezos-owned Amazon joined Starbucks in criticizing the tax proposal.

UNIDENTIFIED PERSON: They can’t be the only company that’s thinking about leaving. He stressed one of his city’s key pillars, “Bellevue is open for business” but expressed concern over the message the tax sends about the broader Seattle metropolitan region. It’s way too expensive.

Under the original proposal, the city would have switched from a head tax to a 0.7 percent payroll tax in 2021 – a change to help low-margin businesses with many modestly paid workers, such as supermarkets. They also rejected the mayor’s proposal to cut the tax in half. That task force recommended $75 million through a tax on employers. In Denver, there is a $50-per-year tax for a full-time employee, while Chicago Mayor Rahm Emanuel scrapped the Windy City’s tax after calling it a job killer. Philadelphia has a tax on wages that is the foundation of the city’s budget.

Seattle-based Starbucks had harsh words for its hometown leaders. She said she ultimately supported the compromise because it creates “a significant new revenue stream” to build more affordable housing.

King County Executive Dow Constantine delivers the 2017 State of the County address in Auburn