The vote on Seattle’s “head tax” will take place tomorrow. The tax is intended to raise $75 million per year which would then be used to subsidize the construction of affordable housing in the city. If passed it would add a $520 tax per person, per year on every large company in the city. For Amazon, which is the city’s largest employer, that would mean an additional $20 million per year.
As Ed pointed out earlier this month, the battle over the tax is being waged between one of the nation’s largest companies and one of the nation’s most socialist city councils. Amazon is in the midst of an expansion in the city that would create an additional 7,000 high paying jobs. But in response to the tax proposal, Amazon announced it was halting planning for one new skyscraper and might lease space in a skyscraper that is already under construction rather than fill it with new Amazon employees.
Socialist city councilmember Kshama Sawant labeled that announcement “blackmail” and a labor-connected activist group called Working Washington went beyond that, asking the state’s Attorney General to charge the company with a felony:
As you know, on May 2nd, a top Amazon executive stated the company was “putting a pause” on expansion in Seattle in an attempt to influence the city council to reject a proposed $0.26/hour tax on the largest companies in the city to address our housing and homelessness crisis. This was a clear threat by Amazon to do substantial harm to the business and financial condition of the city of Seattle if public officials did not act as they demanded…
Issuing mob-like threats to cause harm in order to influence the votes of elected officials is a different matter. The clumsy nature of Amazon’s attempted power play may make it less politically effective, but it does not make it less criminal.
We urge you to prosecute Amazon for the felony of Intimidating a Public Servant to the fullest extent of the law.
There’s no danger that anyone at Amazon is going to be charged with a felony (fortunately, socialist show trials are not the norm in Seattle yet) but it does tell us something about the mindset of the people backing this tax. Saturday, councilmember Sawant led a march on Amazon’s headquarters urging passage of the tax. From GeekWire:
The city’s top private employer has become emblematic of Seattle’s growing pains and the explicit target of Seattle City Councilmember Kshama Sawant and her supporters. Sawant and fellow members of the Socialist Alternative party organized and led Saturday’s march…
About 250 people marched with Sawant, chanting “we are ready to fight, housing is a human right” and “no Bezos-Durkan deal.”
Councilwoman Sawant talks a lot about union labor, but in this case, many rank-and-file union members are against the head tax because their jobs (building the new skyscrapers Amazon will inhabit) are dependent on the company staying in the city. In this clip, you can see some construction workers chanting “No Head Tax” as Sawant tries to hold her rally in support of the tax. They are actually giving her the no-platform treatment which she doesn’t seem to like too much. Eventually, the leader of the union members speaks for a moment and then they apparently go back to work and let her speak:
Underlying all of this is the fact that Seattle really does have a serious problem with homelessness, one that is driving even some long-time residents away from the city. But even if the tax passes tomorrow and Seattle doesn’t leave town, it’s possible that other companies will. The CEO of Zillow called the tax “misguided” and suggested his company might also look at expansion outside of Seattle. What you tax, you get less of. So unless the state’s Attorney General really does start charging companies with felonies for leaving Seattle, this tax is going to slow the growth of jobs in the city.
Even if all the big companies stay and pay the tax rather than going elsewhere, the estimated $75 million this will raise is less than 20% of the $400 million a consultant recently said the city would need to deal with the homelessness problem in the region. In short, the very best case scenario is that this tax makes a very marginal difference. Where is the other 80+% of the money going to come from? That’s not clear but you can probably guess what the socialist answer is going to be.
Councilwoman Sawant doesn’t like it that the goose that lays the golden eggs is able to walk away from her claims to what it produces. Unfortunately for her, and for Seattle under her leadership, they and other big companies are still free to do so.