Seattle's new 'head tax' blasted by city's mega-corporations

Seattle's new 'head tax' blasted by city's mega-corporations

The city councilors who sponsored the new tax said it was time for the company to pay its fair share.

After months of debate, the Seattle City Council unanimously approved a $275-per-employee tax on for-profit companies that make more than $20 million a year. Top-grossing Seattle businesses will be taxed $275 per employee, per hour worked - down from $500 previously - each year for five years.

Council member Lorena González, a co-sponsor of the bill, said in a hearing before the vote, "It is regrettable we weren't able to find a path amongst our colleagues and the mayor that they would be able to support a higher taxation rate".

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.

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Several members of the nine-person City Council said they were reluctantly voting in favor of the smaller tax because there were not enough votes to override a mayoral veto of the larger tax plan.

After the Seattle City Council vote on Monday, the Transit Riders Union, which is affiliated with the Housing for All Coalition, said the new tax would begin alleviating the city's housing crisis.

Head taxes are extremely rare in the US and the ones in place are a fraction of Seattle's proposal. Representatives of businesses warned that the tax would drive employers out of town, while others speakers questioned whether Seattle's city government could be trusted to spend the additional tax revenue wisely. In Denver, there is a $50-per-year tax for a full-time employee, while Chicago Mayor Rahm Emanuel scrapped the Windy City's tax after calling it a job killer. After that, it would have risen to an estimated $39 million a year. The 17-story building, which will have 1 million square feet of office space, is meant to house between 7,000 and 8,000 new employees.

We are disappointed by today's City Council decision to introduce a tax on jobs.

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Many other Seattle technology leaders opposed the tax as well, but in this case, the old adage "You can't fight city hall" wound up winning out.

Seattle Mayor Jenny Durkan, who had threatened to veto an earlier proposal that would have taxed companies $540 per employee, indicated she'll sign the new compromise deal into law. It found that a lack of coordination between Seattle, surrounding cities, and the county creates inefficiency in the region's homeless response.

The Associated Press reports that the Seattle region had the third-highest number of homeless people in the USA, despite the city spending $68 million on combating homelessness previous year.

"While we have resumed construction planning for Block 18, we remain very apprehensive about the hostile approach and rhetoric towards larger businesses, which forces us to question our growth here", company vice president Drew Herdener said.

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Amazon says it has contributed a cumulative total of $40 million to Seattle's affordable housing fund through fees associated with its real estate development in the city.

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