Despite protests from hundreds of Seattle business leaders and voters, the Seattle City Council is ready to pass a "head tax" that may stymie business growth, negatively impact low income communities, and kill new jobs, all while funneling money into the Council coffers to take on homelessness. The ideologically-driven tax blames big business for Seattle’s worsening homelessness problem, when the actual culprits are the Progressive councilmembers.
Under the leadership of Socialist City Councilwoman Kshama Sawant, with Amazon.com the main target, the Council will institute a so-called "head tax," which adds a tax of $0.26042 per hour, per employee (roughly $500 per employee) at businesses grossing (not netting) in excess of $20 million a year. This would add a $20 million dollar annual tax burden to Amazon. In total, the tax is expected to raise $75 million from the targeted business and will go towards affordable housing to address the city’s homelessness problem, though the actual plan of how the money is spent and tracked remains murky — and Sawant said she’d like to tax Amazon at four times that rate.
The business response to this tax is like nothing Seattle has seen in recent memory. Generally, businesses cater to the Seattle progressives and aim to stay out of politics, even when they know the Council’s politics will hurt their business. But this time they're fighting back, as this impacts about 500 already overburdened businesses.
Over 100 business leaders — representing Alaska Airlines and Real Networks to Expedia and Reach Now — penned an open letter slamming the “misguided” tax. Zillow’s CEO explained they may take jobs out of Seattle. Representatives of the legendary Dick’s Drive-In said the company would happily help tackle homelessness, but don’t want to give the City of Seattle the funds because they’ve been ineffective. Indeed, in 2017, Seattle spent nearly $54 million on homelessness, but the problem has gotten worse. They also don’t seem to understand the issue. Councilmember Mike O’Brien repeatedly says there are no shelter beds available, though the nonprofits on the ground say there are.
Amazon, which paid $250 million in local taxes last year, paused a construction project in Downtown Seattle, and is evaluating options to sublease space in a recently leased building pending the outcome of this tax. Union ironworkers have sided with Amazon, shouting down Councilmember Sawant for the first ten minutes during a recent anti-Amazon press conference. Consequently, Sawant and union front group Working Washington claimed Amazon should be prosecuted for “intimidating a public servant.” In other words, if you speak out against a policy position supported by Sawant and Big Labor, you’re threatened with prosecution. Former Washington State Attorney General Rob McKenna called this “irresponsible” and “ludicrous” on my Seattle talk show on KTTH 770 AM (also home to the Ben Shapiro Show).
And as the Council aims to bleed businesses dry, Councilmember Sally Bagshaw had the audacity to criticize businesses for not coming to her to help solve homelessness. First of all, you want to steal tens of millions from businesses and you don’t have the courtesy of arranging a meeting with them yourself? You expect Jeff Bezos to hop down to a public comment section of a meeting at 9:30 a.m., next to some dude with a Socialist Alternative face tattoo, making his case in the 60-second comment limit? And second of all, it’s not up to the business community to fix a problem they didn’t even cause.
How will the next few days unfold? The expectation is that the Council passes the tax on May 14, then have it vetoed by Mayor Jenny Durkan. As of now, the Council doesn’t have the votes to overturn the veto. But between Durkan’s weak leadership and petty Trump attacks, it’s unclear where she truly stands on the tax.
But perhaps it doesn’t matter because we’re seeing a level of anger I can’t remember seeing in the past. There’s finally a shift that appears to be happening with voters. For too long, they’ve given latitude to an out-of-control Council because they are at least in political alignment with a good chunk of the population. But now, folks are starting to realize that everything the Council touches turns into a dumpster fire.
Their plan to address homelessness has been a disaster. The Council hits developers with costly taxes and fees, which get passed on to renters, while capping how high developers can build, which keeps the city from creating enough supply to meet the demands of a growing city. They’re spending $12 million a mile on protected bike lanes, when they originally claimed they'd cost around $800,000. They bought a failed bike share system that they’d end up scrapping. This list of problems this Council has caused is seemingly endless. The head tax may be the death knell.
The Seattle City Council is willingly running this city into the ground, all because they hate capitalism and want to pretend they have all the answers. But given their track record, it seems they’re delusional. And perhaps Amazon should just leave the city to protect it from itself.
Jason Rantz is the host of the Jason Rantz Show on KTTH 770 AM in Seattle/Tacoma. His podcast is available on iTunes.