There’s a rumble in the concrete jungle. A conflict between the Seattle City Council and Amazon boiled over this week, leading to public clashes between those on opposite sides of a controversial “head tax.”
So what exactly is this head tax? What would it do? And why is all of this important to Amazon and cities around the country vying for the company’s second headquarters? We explain it all on this episode of the Week In Geek.
Subscribe to the GeekWire podcast in your favorite podcast app to hear our full conversation, or listen in the player below. Keep reading for a rundown of what the head tax is, the conflict that erupted this week and what it all means.
What it is: The Seattle City Council proposed a “head tax” that would hit the highest earning companies in the city. It would levy $0.26 per employee, per hour worked and would only affect companies that make more than $20 million in revenue every year. It would bring in about $75 million annually to support homeless services and affordable housing. Amazon alone would pay $20 million each year. After 2021, the tax would automatically become a payroll tax.
Why it happened: Seattle is dealing with an unprecedented homelessness problem. It has the third largest homeless population in the country and one of the highest homelessness rates per capita of any major city. The Seattle City Council believes the city needs to raise more revenue to fund homeless services and affordable housing projects as rent and housing prices continue to skyrocket, pushing more Seattle area residents onto the streets.
How Amazon responded: The company decided to suspend construction on one of its buildings this week and said it was reconsidering taking a huge new lease in the still-to-be-built Ranier Square. Together, the projects would house another 7,000 Amazon employees. The company already has around 40,000 employees in the city.
The showdown at Amazon HQ: City Councilmember Ksama Sawant, a proponent of the tax, held an event to voice her support for the tax and implore her colleagues to push it forward. Members of a local ironworker’s union, many of whom had been working on the paused Amazon construction site, showed up to drown out the Councilmember with chants of “no head tax!” Other Seattle residents took the mic or shouted out to voice support or condemnation of the move in what became a heated clash over the bill.
Why it’s important: This all comes back to Amazon’s relationship with its hometown. The recent conflict is taking place against the backdrop of Amazon’s search for its second headquarters, which many see as a sign that the company isn’t feeling the love in Seattle. The clash over the head tax could have stark effects on how — and if — Amazon chooses to continue growing in the city. It could also provide a warning for cities contending to house Amazon’s HQ2. Part of the company’s requirements for its new home is a welcoming tax and regulatory environment.