Amazon Pushes Back Against The Proposed Seattle Head Tax

The amount of local and state taxes that Amazon pays in its home state of Washington amounted to $250 million. This disclosure comes amidst a pushback by the online retail giant against a proposal by the Seattle City Council which aims to tax large corporations based on the number of employees. Last week Amazon threatened to halt expansion plans in the city should the proposal be passed. Amazon went on to halt the planning of a 17-story tower as well as suggesting that it would sublease a skyscraper currently under construction which it has been intending to occupy.

The proposal by Seattle City Council aims to raise $75 million and these funds will be used to address the homelessness problem. In 2015 a state of emergency was declared over the homelessness problem by Seattle as well as King County. However the problem has only deteriorated with the number of homeless students attending public schools in the city tripling to close to 4,300 in the last school year.

High housing costs

Additionally households in Seattle estimated to be around 23,000 are also at risk of becoming homeless since more than 50% of their incomes are spent on housing expenses. In the last 18 months, the prices of homes in Seattle have appreciated at a faster rate than any other place in the United States. Currently the median price is now $777,000 for a house.

According to a member of the Seattle Council, Kshama Sawant, there is a shortage of affordable housing and skyrocketing rents. Per Sawant Amazon is not solely to blame for the problem of homelessness in the city though it has employed hardball tactics.

“This is a message to the working people of America from Amazon saying that if you dare to fight us, we will threaten you with taking away jobs. It’s really about billionaires … making sure people understand the balance of power,” Sawant told The Washington Post.

Job killer

However businesses in the city view the proposal to tax corporations based on employee count as damaging and with the potential of destroying jobs. It is estimated that firms which generate revenues amounting to over $20 million per year would end up paying around $500 for every employee yearly. Per city officials around 600 firms would qualify for the head tax or employee hours tax.

Executives drawn from over 100 firms including Expedia and Alaska Airlines have written a letter indicating their opposition to the proposal.

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