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The Seattle City Council voted yesterday to impose a new tax on for-profit companies that gross at least $20 million a year in the city - a “head tax” of $275 per employee, per year, which the city says will be used to address Seattle’s homeless problem.

The Seattle Times reports that roughly three percent of the city’s businesses will be impacted by the head tax, which will raise about $47 million a year. More than 20 percent of that tax revenue will come from one company, Amazon, which is said to be facing a head tax bill of about $10 million a year.

“Other companies set to be taxed include Starbucks and longtime, family-owned supermarket Uwajimaya,” the Times writes.

The council originally had been considering a $500 per employee tax.

The Times writes that “Seattle has been in a civil state of emergency over homelessness since late 2015. A point-in-time count last year tallied more than 11,600 homeless people in King County.

“Proponents of the head tax say companies such as Amazon have contributed to homelessness because their highly-paid employees have driven up rents and home prices.

“Along with the tax Monday, the council approved a non-binding resolution that calls for spending 66 percent of the new money on affordable housing, 32 percent on emergency shelter, trash pickup, raises for service workers and other needs and 2 percent on administration.”
KC's View:
Not being a resident of Seattle, nor a close follower of its politics and governance, it is hard for me to pass judgement on this one way or the other. I do know, from having spent a lot of time there, that the homeless problem is serious, just as it is in Portland, three hours to the south.

My sense - and I could be wrong about this - is that part of the problem has been the lack of a nuanced strategic approach to growth … problems have bene exacerbated by rampant growth, and it sometimes seems as if the wounds on the city’s epidermis are being treated with band-aids.

I’m not saying that Amazon is all right or all wrong about this, but I do have to wonder about the political wisdom of attacking the company at a time when it is looking for a second North American headquarters city. Companies like Amazon and Starbucks, which have redefined both retailing and Seattle, ought to be treated like respected partners, not like piggy banks.

There is another Seattle Times piece worth reading here that looks at exactly how geographically expansive Amazon has been.

An excerpt:

“Amazon’s 17 largest satellite offices in the U.S. and Canada collectively employ about 17,500 people — more than the combined workforce of Airbnb, Netflix, Twitter and Zillow. Just in the last year, the company announced plans to add 10,000 more, most recently with leases in Boston and Vancouver, B.C.

“The scale highlights the breadth of Amazon’s ambitions in a wide range of areas. It includes engineers and salespeople working on cloud computing in suburban Washington, D.C., television producers near Los Angeles, and machine-learning researchers in Pittsburgh.

“The proliferation of offices adds another layer to Amazon’s profile in the United States. A company that grew into a major employer nationally with blue-collar warehouse jobs is, increasingly, a major regional employer of technologists and corporate salespeople, too.”

Sounds like it has options. And, as we’ve noted here before, Amazon seems intent on not repeating mistakes that it made in Seattle as it expands and builds elsewhere.