Seattle City Council passes tax on big businesses

Over Amazon's threats Seattle passes tax on big business to fund affordable housing. Amazon's Spheres just one of many recent headquarter expansions in Seattle

Seattle head tax passes committee vote, faces possible veto

The tax that was passed Monday was actually a compromise negotiated between Councilmember Lorena Gonzalez and Mayor Jenny Durkan over the weekend.

Amazon was the main target of the campaign for establishing an employee head tax in Seattle. So far, mayors in other cities competing for HQ2, as the project is sometimes called, have taken a wait-and-see approach. At community meetings, he's supported a proposed $75 million tax on big employers in Seattle.

"The private sector will respond in a negative way to the new head tax, in this case with less hiring and modestly reduced wages", Chris Edwards, director of tax policy studies at the Cato Institute and editor of, told FOX Business. The funds from the so-called "head tax" will go toward affordable housing and homeless services.

The mayor issued a statement and held a press conference following the council's passage of the employee-hours tax, stating her intent to sign the legislation.

The Seattle City Council unanimously passed the tax that has earned Starbucks and Amazon's ire Monday afternoon.

There's nothing quite like Seattle's "head tax" on the horizon in Boston, but city officials are considering raising affordable housing requirements for new buildings. It will raise $48 million to pay for services combating the city's homelessness problem. "So you're either well-off and hungry or homeless and well fed".

Pressure from Amazon and other big employers, including Starbucks and Expedia, had forced councillors to reduce the tax from an initial proposal of $500 per worker.

"The company recently reported record-breaking profits of almost $2 billion dollars in one quarter", according to a statement by Lorena González, Lisa Herbold, Teresa Mosqueda and Mike O'Brien, the councilmembers who proposed the tax. "But we have to find ways to come together to take action on our toughest problems".

"The spending keeps going up and we're not seeing results".

The councilmember said Bezos becomes $275 million richer every day.

The city declared a state of emergency over homelessness in 2015. "Taxing jobs will not fix our region's housing and homelessness problems", she said. The median price for a house is now $777,000. Seattle a year ago had the nation's third-largest homeless population. But now Philadelphia is shortlisted for Amazon's second headquarters. Amazon, individually, will have to pay about $10 million.

Boston already charges a higher property tax rate on commercial real estate than residential, and voters recently approved an additional levy on businesses for housing, parks, and historic preservation. Healthcare companies are exempt, as are non-profits. City Council members want the money for affordable housing and to address homelessness. "Absolutely", the Transit Riders Union said in an email to supporters, according to the Seattle Times.

Amazon on Monday evening said it was "disappointed" in the "tax on jobs".

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