Seattle approves ‘head tax’ on large businesses despite Amazon’s opposition

[Sun Belt]

Seattle approves ‘head tax’ on large businesses despite Amazon’s opposition
5/14/18 By Thomas Barrabi
Fox Business

The Seattle City Council on Monday approved a pared-down version of the “head tax” on the metro area’s largest employers to fund efforts to battle homelessness despite public criticism from local businesses, including e-commerce giant Amazon.

Approved by a vote of 8-1 on the amended version, the measure will go into effect in January 2019 and tax companies that earn $20 million or more in annual sales 14 cents per employee hour, or $275 per employee annually. The tax is expected to raise roughly $50 million per year toward outreach efforts for the homeless, including affordable housing and emergency shelter.

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In the days ahead of the vote, Amazon said it had halted planning on a new 17-story office tower pending the city council’s decision. The Seattle-based e-commerce company employs more than 40,000 workers in Seattle, with plans for further expansion.

Amazon vice president and spokesman Drew Herdener said the company is "disappointed" with the Seattle City Council's decision to impose the tax.

“While we have resumed construction planning for Block 18, we remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here,” Herdener said. “City of Seattle revenues have grown dramatically from $2.8B in 2010 to $4.2B in 2017, and they will be even higher in 2018.”

https://www.foxbusiness.com/politics...ons-opposition

I heard this on the radio when driving home yesterday, it touches on 3 topics often discussed here: the homeless problem, Amazon and pizza. [Actually it doesn't mention pizza at all.]

I would've posted it in the Amazon discussion thread, but it's still locked.

[Crawford]

Good for Seattle. The head tax is extremely modest, and Washington doesn't have state or local income taxes. You have to raise money somewhere.

[Sun Belt]

Originally Posted by Crawford

Good for Seattle. The head tax is extremely modest, and Washington doesn't have state or local income taxes. You have to raise money somewhere.

According to the Amazon spokesman: Seattle doesn't have a revenue problem. Since 2010, their budget has grown by $1.5 billion to 4.2 billion and higher than that for 2018.

[Crawford]

Originally Posted by Sun Belt

According to the Amazon spokesman: Seattle doesn't have a revenue problem. Since 2010, their budget has grown by $1.5 billion to 4.2 billion and higher than that for 2018.

Putting aside the fact that that's a very modest city budget for a rich, successful city (NYC budget is around $90 billion), who cares what the Amazon spokesperson says? They answer to Bezos, not the people of the Seattle.

Amazon has zero interest in whether or not Seattle has a "revenue problem", whatever that means. They just don't want to contribute anything to the public good.

[Sun Belt]

Originally Posted by Crawford

Putting aside the fact that that's a very modest city budget for a rich, successful city (NYC budget is around $90 billion), who cares what the Amazon spokesperson says? They answer to Bezos, not the people of the Seattle.

Amazon has zero interest in whether or not Seattle has a "revenue problem", whatever that means. They just don't want to contribute anything to the public good.

The only people that should care what the spokesman says or relays from Bezos are the people of Seattle when Amazon is literally saying this move by Seattle "forces us to question our growth here”.

This is great news for HQ2 candidate cities.

Seattle revenue has grown by 150% in 7 years. It's not like they have stagnant or falling revenues and need to find a new revenue stream.

E) Seattle already has the 4th highest money spent per resident and is of similar size to Boston, yet their budget far exceeds that of Boston -- FY2018 $3.15 billion.

[toddguy]

Originally Posted by Crawford

Good for Seattle. The head tax is extremely modest, and Washington doesn't have state or local income taxes. You have to raise money somewhere.

I agree. This is not a good look for Amazon. It really makes the company look cheap, petty, and greedy. At least the other companies against this had the good sense to not make a spectacle of themselves.

This reinforces my belief that Amazon really only cares about the bottom line and what it can get from a city for the H2Q, and the "cultural fit" and all is really lower on the list than many people think.

This is a good sign for cities like Atlanta.

I am kinda glad my city really has no chance.

[The North One]

Good, fuck Amazon.

[Sun Belt]

It's not just Amazon that has spoken out against it.

"If they cannot 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"
John Kelly
Starbucks's senior vice president of global public affairs

[toddguy]

Originally Posted by Sun Belt

It's not just Amazon that has spoken out against it.

"If they cannot 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"
John Kelly
Starbucks's senior vice president of global public affairs

Still nothing compared to Amazon.

[mhays]

I'm normally vote yes for all taxes. But we sure are piling on on the corporate side. Every new office tower pays many millions in fees...the exact opposite the subsidies other cities offer. We also charge sales tax, which is tens of millions more. I haven't done the math but I'd guess a major Amazon tower pays north of $50,000,000 in fees and taxes that many other cities don't charge.

The real hit is lower-wage companies and anyone hourly. Between family leave, schedule certainty, the $15 minimum wage, and the head tax, the cost to employ someone at a supermarket for example is a a double-digit percentage higher even before the minimum wage is figured. Lots of well-intentioned ideas that are wreaking havoc on businesses. There are a lot of gray areas of course...an independent store is often under the various size threshholds for compliance with these measures.

[pip]

Originally Posted by Sun Belt

The only people that should care what the spokesman says or relays from Bezos are the people of Seattle when Amazon is literally saying this move by Seattle "forces us to question our growth here”.

This is great news for HQ2 candidate cities.

Seattle revenue has grown by 150% in 7 years. It's not like they have stagnant or falling revenues and need to find a new revenue stream.

E) Seattle already has the 4th highest money spent per resident and is of similar size to Boston, yet their budget far exceeds that of Boston -- FY2018 $3.15 billion.

Budgets between cities cannot be compared directly. Often some things are covered by county and state that aren't in others. Also some cities the schools are on the budget and others aren't.

[Sun Belt]

Originally Posted by mhays

I haven't done the math but I'd guess a major Amazon tower pays north of $50,000,000 in fees and taxes that many other cities don't charge.

A preliminary analysis is that relocating 7,000 Amazon jobs—assuming 3,000 software engineers and 4,000 business support employees—from Seattle to other regions could result in an annualized loss of $3.5 billion
in total economic output for the Seattle metro region. The loss of jobs and economic productivity will also have large impact on government tax collections used to fund public services.

https://www.seattlechamber.com/docs/...rsn=e5d1a422_2

Originally Posted by mhays

The real hit is lower-wage companies and anyone hourly. Between family leave, schedule certainty, the $15 minimum wage, and the head tax, the cost to employ someone at a supermarket for example is a a double-digit percentage higher even before the minimum wage is figured. Lots of well-intentioned ideas that are wreaking havoc on businesses. There are a lot of gray areas of course...an independent store is often under the various size threshholds for compliance with these measures.

The head tax will reach 585 Seattle businesses like family-owned grocer Uwajimaya that employs 250 people. The owner says her profit margins are less than 10 cents for every dollar they sell, meaning they will have to cut back on bonuses and employee benefits to make up that added cost.
https://www.seattletimes.com/busines...-tax-proposal/

[mhays]

Originally Posted by Sun Belt

Seattle revenue has grown by 150% in 7 years. It's not like they have stagnant or falling revenues and need to find a new revenue stream.

You mean 50%. Or quite a bit less when adjusted for inflation.

[Khantilever]

The incidence, or burden, of a tax does not necessarily fall where it is collected. The burden of a head tax does not fall on employers; it falls on employees in the form of lower wages and employment. The closest example is the social security employer match which is widely understood to be almost entirely borne by workers.

You might think that’s not a big deal for Amazon tech workers. But this head tax is based on the size of the employer’s revenues, so it includes companies like supermarkets who employ low-skill workers. This is a tax on those workers.

[Crawford]

Originally Posted by Khantilever

The incidence, or burden, of a tax does not necessarily fall where it is collected. The burden of a head tax does not fall on employers; it falls on employees in the form of lower wages and employment.

Seattle is very desirable and has high wages and nearly full employment.

It's economy is extremely robust. It can manage such a modest tax as well as any city.

[10023]

A direct tax on headcount is asking for trouble. Why not a city income tax like NYC?

[mhays]

As a builder of both offices and housing in Seattle, I suspect this might influence development tilting a little more into the housing column. Bellevue and Redmond, which will have light rail in 2023, could get a larger percentage of office growth.

[WhipperSnapper]

Originally Posted by Sun Belt

The head tax will reach 585 Seattle businesses like family-owned grocer Uwajimaya that employs 250 people. The owner says her profit margins are less than 10 cents for every dollar they sell, meaning they will have to cut back on bonuses and employee benefits to make up that added cost.
https://www.seattletimes.com/busines...-tax-proposal/

LOL. Most grocers margins are in the 3 to 6% range. They make it up in volume. She's swimming if she's making less than 10%. Your bleeding heart for her situation is just wasting blood. Perspective. Very important.

Amazon, Starbucks? Boohoo

[Khantilever]

Originally Posted by Crawford

Seattle is very desirable and has high wages and nearly full employment.

It's economy is extremely robust. It can manage such a modest tax as well as any city.

This is a bizarre approach you’re taking. The question is not whether it will wreck the economy. The question is whether it is good public policy. Imposing a flat tax on workers on the basis of their employers’ size is nonsensical. That the local economy is booming doesn’t mean it isn’t a harmful policy; it just means that the negative effects may be masked in the short-term.

[M II A II R II K]

Amazon threatens to move jobs out of Seattle over new tax

https://www.theguardian.com/technolo...e-homelessness

.....

- The world’s second-biggest company has warned that the “hostile” tax, which will charge firm’s $275 per worker a year to fund homelessness outreach services and affordable housing, “forces us to question our growth here”.

.....