Swatting away ethics concerns, Seattle City Council member Kshama Sawant unveiled her proposal Wednesday morning that would raise $300 million for housing and environmental initiatives with a tax on Amazon and Seattle’s largest payrolls.
“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.”
The online giant remains in Sawant’s crosshairs. Sawant’s official Seattle City Council press release on the announcement calls her proposal the “Amazon Tax Legislation.”
The base of her proposed legislation: raising $300 million a year for housing and environmental initiatives through a payroll tax on the city’s largest 3% of businesses. The proposal would create a 1.7% payroll tax on the businesses with $7 million and above in annual payroll. Most of the funding would go to housing programs with around $75 million a year going to Green New Deal initiatives.
Sawant’s office says the “825 biggest companies in Seattle would pay the tax” — with “the remaining 97 percent of companies – about 22,200 – would pay no tax under the proposal.”
Non-profit organizations, public employers, and grocery stores would also be exempt.
The announcement comes after it was revealed that the third-term council member representing Capitol Hill and Central Seattle faces charges over alleged ethics violations for using her office to promote a potential ballot measure related to the tax. While the charges could further inspire Sawant’s political opponents and critics, they seem unlikely to dent the “Tax Amazon” movement she has aligned so closely with her third term on the council. If the Seattle Ethics and Elections Commission determines Sawant was in the wrong, it could fine her up to $5,000 per violation.
Sawant’s announcement, meanwhile, doesn’t mention the possibility of bringing the issue to voters in November but advocates for the tax have said a ballot measure will be an option if Seattle City Hall fails to act.
Sawant is also facing a fight in Olympia. CHS reported late last month about a state proposal that would open the door for King County to tax large employers to support housing and homelessness services. Many of the area’s largest companies including Amazon and Microsoft have said they will support the state bill — if legislators add restrictions preempting cities from passing their own taxes on businesses to pay for housing and homelessness. Under the proposed legislation, Washington counties with populations greater than 2 million would be allowed to enact a 0.1% to 0.2% tax on the payrolls of large employers. There would be a myriad of qualifications. Only companies with employees making more than $150,000 would be taxed and the pay of any employees making less than the $150,000 threshold would be deducted. Grocery businesses would be exempted as would any business with 50 or fewer employees if half of those workers make less than $150,000.
Proponents of a tax on businesses in Seattle have called on state legislators to not introduce preemption amendments to the bill that would stop cities from enacting their own payroll and head taxes.
Sawant says the $300 million raised by her proposal would allow Seattle to build 8,000 new affordable, “publicly owned or controlled homes” over the next 10 years and “retrofit 47,000 existing homes in the city to meet Green New Deal standards.”
The Sawant proposal would not be a Seattle Head Tax sequel. In 2018, the city council passed and then rolled back a $275 per full-time employee tax on companies reporting $20 million or greater in annual “taxable gross receipts.” That tax would have generated about $50 million annually.
Sawan’ts office says the new proposal is closer to the 2018 voter-approved measure in San Francisco that taxed businesses to fund housing and services.
“Companies here have reaped billions because Washington state has the most regressive tax system in the nation. It’s time for Amazon and other major corporations to pay their fair share,” Sawant said.
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