Seattle Council OKs Lower $50M Annual Head Tax On Big Biz

Seattle Council OKs Lower $50M Annual Head Tax On Big Biz

A parade of hardhat union workers and threats from hometown-behemoth Amazon did not stop Seattle leaders from passing on Monday a "head tax" meant to fund housing projects and homeless services.

The Seattle City Council passed a new tax on big businesses Monday to help address the city's growing homelessness problem, agreeing to a lower rate than initially proposed after complaints from Amazon.com and other city firms.

The tax is expected to generate almost $47 million, which will be used to build 591 low-income housing units by 2023. The tax expires after five years with the option to renew it.

The legislation was born out of Seattle's "Progressive Revenue Task Force."

City Council members worked over the weekend to reach a compromise with Seattle Mayor Jenny Durkan, who threatened to veto the original suggestion of $500 per employee, proposing her own plan calling for half that amount. The council would have needed an additional councilmember to change their no vote to a yes in order to prevent a veto.

King County Executive Dow Constantine opposed the higher head tax and praised Durkin's compromise proposal. Sawant was the only councilmember to vote against cutting the per-employee cost from $500 to $275 at Monday's meeting.

"When I looked at this new revenue tax stream, I think we have to convince the public that we are using it wisely and strategically, and I think we've failed in that regard as a city", he said.

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Under the approved head tax, 591 units of mixed-income housing and permanent supportive housing are expected to be created in the five-year spending plan.

That "head tax" formula is created to raise $45 million to $49 million a year over the five-year life of the tax - down from an original $75 million annually - to build more affordable housing and support services for the homeless.

"The City of Seattle has an obligation to take care of those people who are suffering on our city's streets", Gonzalez said prior to Monday's vote.

"When you work minimum wage at $15 an hour, you end up spending 90 percent or more of it on rent and the rest of it in bills", said Alexander Finch, 27, who identified himself as homeless and living in one of the city's tent communities.

"I am quite confident that as we move forward, we can continue to have the best city anywhere for people to do business ... this is the city where their workers are going to want to be and that's why they're going to want to be here", she said. Amazon has more than 40,000 employees at its headquarters in Seattle, so the tax could cost the e-commerce giant more than $10 million annually.

Sawant brought up the fact that Amazon provided $350,000 to the Civic Alliance for a Sound Economy - which is sponsored by the Seattle Metropolitan Chamber of Commerce - that went toward Durkan's mayoral campaign.

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