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Seattle passes a smaller version of the 'Amazon tax'

15 May 2018

Seattle leaders on Monday unanimously approved a tax on large businesses such as Amazon and Starbucks to fund the fight against homelessness after weeks of heated debate and raucous hearings.

Other cities have implemented similar taxes, but critics say Seattle's tax could threaten the booming local economy and drive away jobs. The company did not comment on the new compromise when GeekWire asked ahead of Monday's meeting.

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. "The city does not have a revenue problem - it has a spending efficiency problem". With more than 40,000 employees and counting, Amazon is at the center of the conversation and the explicit target of Sawant, who has called the proposal "Tax Amazon Legislation".

"I can confirm that pending the outcome of the head-tax vote by City Council, Amazon has paused all construction planning on our Block 18 project in downtown Seattle and is evaluating options to sub-lease all space in our recently leased Rainer Square building", Amazon spokesman Drew Herdener said in a statement when the original plan was announced. "If they can not provide a warm meal and safe bed to a 5-year-old child, no one believes they will be able to make housing affordable or address opiate addiction".

"There is no way this tax will be a burden on big business in Seattle", she said before the vote.

Mayor Jenny Durkan, who expressed concern that the original proposal would lead to an economic backlash, said she would sign the new tax ordinance into law. "We have a lot more work to do".

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Currently, the city had 39 providers and 155 contracts in the Homeless Division. A recent audit of King County's response to the crisis gives weight to that view. The Seattle region had the third-highest number of homeless people in the United States in 2017.

But the city says homelessness is a moving target. At a meeting with Capitol Hill business representatives last week, the duo said that data and expert reports plus their own experiences seeing the streets of the city convinced them that more needs to be invested in addressing Seattle's housing and homelessness problems.

The city spent $68 million on homelessness a year ago, and some said they wanted to see the city prioritize its money better.

It would only impact businesses with over $20 million a year in gross revenue. Although more than 12,000 affordable units have been built, far more are necessary to house the growing population of people displaced by rising housing costs, which are bid up by an influx of well-paid tech workers and exacerbated by widespread single-family zoning. The company made about 80 times that, $1.6 billion, in net first-quarter profits.

Outside of Seattle, King County's 2018 budget for homelessness spending was $66.9 million, which includes funding for emergency shelter, prevention, supportive housing, rapid re-housing, transitional housing, and other homeless housing programs and supportive services.

Seattle passes a smaller version of the 'Amazon tax'