By Becca Savransky, SeattlePI
A proposal to tax Amazon and other large companies in Seattle to raise hundreds of millions of dollars for affordable housing and other services was unveiled Wednesday by City Councilmember Kshama Sawant.
The proposal — which would apply to the top 3% of companies in Seattle — would impose an excise tax of 1.7% on the company payrolls to bring in an estimated $300 million each year. Sawant said her proposal would apply to 825 companies in the city and would not include nonprofits, grocery stores or public employers.
Of the money brought in from the tax, 75% of the funds would go toward building affordable housing and social services and the remaining 25% would be used to retrofit existing homes to meet Green New Deal standards, Sawant said Wednesday. She predicted over 10 years, the tax would help the city to build 8,000 new units of social housing — units that are affordable, publicly owned or controlled and energy efficient. It would also help retrofit 47,000 existing homes that use home heating oil or fracked natural gas to clean electric energy.
“On behalf of our movement, I’m excited to put forward this bold, transformative proposal,” Sawant said. “We know that big business, the wealthy, and the political establishment will staunchly oppose this, and that we will need a powerful movement. If we win, this will not only transform the lives of Seattle’s working people, it will set a historical marker for cities around the nation.”
Sawant has been fighting to tax Amazon and other big employers in the city for years. In 2018, the Seattle City Council unanimously passed — and then quickly repealed — a head tax on the city’s largest employers after it drew intense pushback from Amazon and other businesses in the area. Over the past several months, Sawant’s “Tax Amazon” movement has been gaining momentum as she has reignited the fight.
Sawant argued Wednesday when unveiling her new proposal the tax is necessary as tens of thousands of people continue to be pushed out of Seattle due to the rising housing costs in the city.
“They are nurses, bus drivers, restaurant workers, baristas, mechanics, construction workers, teachers, and more. These are the people who make our city run,” Sawant said. “Communities of color, immigrants, and the LGBTQ community are especially feeling the stress of housing displacement…Even tech workers are feeling the vice grip of a private housing market that has failed working people.”
She demanded Amazon and other big companies in the city start paying their “fair share.” She added her proposal to build a significant amount of housing would create a substantial number of jobs.
Sawant also cited a recent report from McKinsey & Company that said it could cost King County up to $11 billion over the next decade to solve the homelessness crisis. That report said the county had seen huge amounts of economic growth and job creation, but the housing supply hasn’t kept up. It said substantial incremental public spending is needed to build enough affordable housing in the county.
Sawant’s unveiling of her proposal comes just after the Seattle Ethics and Elections Commission charged Sawant with violating laws by using her elected office to push a possible ballot initiative relating to a tax on Amazon. In response to the charges, Sawant called it a misunderstanding and said she would move forward with her plans for her tax proposal.
The proposal also comes as state lawmakers are considering a bill that would allow King County to impose a payroll tax on large businesses with employees making $150,000 or more. That proposal would let the county put a tax on businesses’ payroll of between 0.1% to 0.2%. The salaries of employees earning less than $150,000 would be deducted to calculate the tax.
It is estimated by officials the tax could bring in $121 million each year to go toward services including constructing and maintaining affordable housing and providing for housing, shelter and other homelessness interventions. Mayor Jenny Durkan and King County Executive Dow Constantine both came out in support of the proposal, calling it a “progressive new funding tool” for the county to use to bring in more money for affordable housing and address homelessness in the region. Durkan and Constantine in a statement called for state legislators to “act with urgency” on the bill.
Several big businesses, including Amazon, Microsoft and Starbucks earlier this month also signed onto a statement saying they would support a business tax “imposed at a reasonable level” to address homelessness in the region. In the statement, the businesses called for a “regional approach to address a regional issue.”
If the state proposal passed, King County Council would still need to approve legislation to impose the tax.
But Sawant and supporters of her movement say the state bill would raise only a fraction of what is needed to address the affordability crisis in the region. Sawant has also warned state legislators against adding into the bill a clause which would limit Seattle’s ability to impose its own tax on big businesses.
In a letter sent earlier this week to state Rep. Nicole Macri, D-Seattle, who sponsored the state bill, Sawant said it was with “great dismay” she had been hearing about the “preemption” clause in relation to the bill.
“This clause would create a statewide ban on cities like Seattle being able to tax big businesses, with working people losing our right to address the deep social crises inflicted on us,” she wrote in the letter. “It would in reality be an egregious selling out of working people. If passed, it would do historic damage in our already highly unequal city and state, with Washington having the most regressive tax system in the country.”
Sawant urged Macri in the letter to stand with the county’s working people “who are struggling with an ever-deepening housing crisis against this craven attack by the billionaires. All you need to do is publicly make clear your opposition to the preemption poison pill,” Sawant said.
Sawant has been advocating for several new policies to help address Seattle’s lack of affordable housing and growing population of people experiencing homelessness. Earlier this week, a proposal she brought forward banning evictions during the winter months was approved by City Council, however it was heavily amended from its original version. Sawant has also been calling for rent control.