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Sawant loses fight but ‘Tax Amazon’ COVID-19 relief and housing proposal begins path through Seattle City Hall

With COVID-19 set to tear up the city’s budget, District 3 Seattle City Council member Kshama Sawant has turned again to a familiar target: Amazon and the biggest two percent of businesses. But Monday, her council counterparts opted to send a proposal for a new tax on Seattle’s largest companies to provide emergency relief from the pandemic down a legislative pathway not controlled by the Socialist Alternative representative for Capitol Hill’s District 3.

More than 5,400 people signed a petition to the council spearheaded by Sawant to enact the new tax proposed last month with South Seattle rep Tammy Morales. Another over 1,100 people emailed council members calling on them to send the legislation to Sawant’s Sustainability and Renters’ Rights Committee.

Monday, the suite of three bills was sent unanimously to the Select Budget Committee, chaired by council member Teresa Mosqueda, who said she would work to get the legislation a robust discussion with urgency.

Sawant levied criticisms against council member Lisa Herbold and council president Lorena González for their votes to repeal her head tax on Amazon in 2018.

Monday, several council members, including Herbold, pushed back against Sawant for promoting the idea of a divided council during an emergency.

“I don’t think it’s helpful to really promote that divisive approach to how the council does its business,” Herbold said. “I think this council acts in a way that’s fair and respectful of one another.”

Council member Debora Juarez said “this type of politics in the midst of a lethal pandemic, to me, is unacceptable and a waste of time.”

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The Sawant-Morales plan would accelerate the “Amazon Tax” proposal to generate $500 a month Seattle COVID-19 relief payments for up to 100,000 households beginning later this year. The program would prioritize assistance to “seniors; those that are undocumented, immigrants, and refugees; individuals experiencing homelessness; working people who have lost incomes and become destitute as a result of the pandemic; and, others who experience structural or institutional barriers to accessing support from the government.”

The tax presented to the council Monday afternoon would raise $500 million per year beginning in June, with $200 million going toward emergency relief from the pandemic to help up to 100,000 households. It would then be used to fund the construction of up to 10,000 units of social housing and the conversion of homes to environmental standards in line with the Green New Deal starting next year.

“In this coronavirus emergency, elected officials have a duty to act immediately and boldly to support the desperate needs of working class people created by the crisis, especially in the context where big banks, corporate landlords, and big corporations as a whole are still making money while the vast majority of the working class is facing the brunt of the crisis,” Sawant said during the council meeting held via video conference.

The largest two percent of businesses are those with annual payrolls exceeding $7 million and would be taxed 1.3%, with non-profits, grocery stores, public employers getting exemptions.

The payments would not be collected until 2021 or 2022 and the emergency payments of $500 each month for four months to up to 100,000 households would be funded through a borrowing from other existing city funds.

The intent is to build on the Emergency Grocery Voucher Program by distributing cash to households already enrolled in assistance programs, such as Fresh Bucks. Households with seniors, unemployed people, immigrants and refugees, and other vulnerable groups would be prioritized for the financial help.

“My hope is that we can get moving on this very important package of bills so that we can serve our communities and address the inequity that is inherent in our existing tax structure,” said Morales, who is sponsoring the legislation with Sawant.

In March, Sawant announced that Morales had joined as co-sponsor on the Tax Amazon legislation to create a payroll tax on the city’s largest 3% of businesses in Seattle to raise $300 million annually for homelessness and housing programs.

Meanwhile, the Taz Amazon group formed to push for the new tax announced it was filing to hold a ballot initiative on the tax “in order to fund social housing and a Green New Deal” this fall. In 2018, voters approved a measure in San Francisco that taxed businesses to fund housing and services. That tax was expected to generate about $300 million a year.

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.

The proposal comes as more than 44,000 King County residents filed unemployment claims from March 22-28, up from over 37,000 claims the week before, according to the state. Across Washington, nearly 182,000 claims were made in the last week of March as Washington’s moves to blunt the spread of the novel coronavirus continue and many businesses shutter.

In the end, Sawant sided with the rest of the council to send the measures to the budget committee, even as she called for it to be heard and introduced on her panel, of which Morales is the vice chair.

“If the council says that they support this initiative and they want to make sure that the lives of working people are eased during this crisis, I would urge no delays in having the urgent committee meetings we will need to discuss this legislation and to pass this bill without any delays and without any watering down,” she said.

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30 thoughts on “Sawant loses fight but ‘Tax Amazon’ COVID-19 relief and housing proposal begins path through Seattle City Hall

    • Can’t let billionaires off the hook. Tax them and take their profits and give it back to the people who built them. CEOS are scum of the earth and live off the work of wage slaves.

      • But you aren’t taxing the billionaires at all; you are taxing the profits of the companies, which are separate things. The CEOs are still going to make their salaries and bonuses. The companies will cut overhead (likely with headcount at the lower end of the payroll) to make up for lost earnings due to increased taxes.

        If you want to “stick it to the man” you actually have to tax the man and not the company that he runs. Also, “CEOs are scum” makes your argument sound petty and vindictive; which isn’t a good look when you want people to join your cause.

      • Totally Stan, we gotta stick up for the billionaires in this city, who else will fight for them?!

      • You realize the “Amazon Tax” applies to 800 companies, not just billionaires, and there’s no requirement the business is profitable.

        For instance Pagliacci Pizza meets the requirements for taxation. In fact, 62% of all payroll in Seattle is subject to this tax.

      • @Stick up for the 1%!!!!!!!!!

        Nice try troll. Maybe try reading my comment instead of regurgitating the “shouting points” (exclamation much?) that Sawant puts in your eagerly awaiting mouth.

        #1 My comment to @James was regarding a taxing of Amazon, the company, not being an actual tax on Jeff Bezos, the billionaire. You Sawant zombies seem to think they are one and the same. You can tax Amazon and Jeff is still going to get his salary and bonuses. He’s not going to tell the company to take Seattle’s new tax out of his bank account. So you’ve done nothing to the billionaire.

        #2 I’m not sticking up for Jeff Bezos or any other billionaire. They have lawyers that can do that for them far better than I ever could.

        #3 I have no problem with billionaires being made to pay a higher tax rate than other citizens. But that’s been tried and defeated in court as unconstitutional. So, again, you aren’t actually impacting the billionaires at all.

        What you are impacting are decisions a company, and not just Amazon, will need to make in order to comply with the tax and still be profitable for the share holders. That’s right; mom/dad, grammy/gramps, even regular folks, have a stake in large companies where our 401k money is invested in stocks. So in order to appease stock holders and turn a profit, with a new tax, companies will need to find a way to cut costs (likely done as lay offs). As stated above, Jeff ain’t taking a pay cut. So who do you think will get the shaft? Hint: not billionaires.

        But you keep foaming at the mouth about taxing the top businesses in Seattle as a way to “get at billionaires.”

      • Jeff Bezos’s salary as CEO was $89,000 in 2018.

        His stock holdings went up on the other hand because people like me buy and own AMZN.

      • No Stan, I wasn’t trolling. I’m serious. THANK YOU for sticking up for the billionaires and their billion dollar companies. Reminding us it’s unconstitutional to make them pay more taxes. And thank you for “teaching” us all the reasons why it’s a no no to have this head tax. Thanks man! we need more stans in seattle….to go f**K themselves.

      • well, @Stick up for the 1%!!!!!!!!!, one thing you haven’t learned is how to read. but good luck with that in your life as you sit frustrated, furiously mashing them computer keys. LOL!

    • I’m with Stan! Amazon’s presence in Seattle is a boon. Wish they would spread out the boon a little,,,
      Stick up… is a pure troll, with nothing to offer but sarcasm and a witty sign off!

    • She is not responsive except when it serves her. You can email her or call her or talk to her staff 500 times and if it doesn’t get her face in the news, she will not respond. I voted for her the 1st time around and have regretted it ever since. She is a DISTRICT representative, not an at large rep. If she wants to push a national agenda while occupying a district seat, that’s fine, but she needs to not do it at the expense of doing the job she is paid to do.

    • Agreed! It’s continually stunning how reactionary some people get at the idea of 0.7% payroll tax to pay for affordable housing.

      • The payroll tax proposed is 1.3%. The revenue proposal is 10x the failed 2018 head tax. For context, $500M per year raised is 35% of the current general fund of $1.4B. The tax is absolutely massive.

        My issue is almost as much with the blatant misleading manner Sawant has promoted this legislation. For instance, calling it a COVID relief bill when it’s a permanent $500M per year tax. Also saying this only applies to big billionaire companies and leading others to think it only specifically taxes Amazon. The name itself of “Amazon Tax” is extremely misleading.

        On the spending side, it acquires 10k units over 10 years. That’s a super expensive solution for lowering rents that will only benefit a select lucky few. Giving 30% rent subsidies could serve 7x the people at the same cost.

        Despite the huge sum of money raised, there is zero funding for parks, transit, safety, mental health, underfunded pensions, ect.. it’s purely to push her own specific agenda of social housing.

        Lastly, we have zero idea what the city budget looks like right now. Enacting a massive spending program without even knowing how where we stand is absolutely irresponsible.

  1. Amazon is donating 8200 laptops to kids in Seattle who don’t have them, they are hiring during COVID-19, they are paying rent for the restaurants that are impacted by their employees that are working from home. What has Sawant done for the community during this? Keep taxing big companies and running them out of Seattle. She is manipulating this horrible situation for her own agenda.

    • Totally, 8,200 laptops and a few rent payments is plenty of money for this city rather than taxing them on the $2.1B profit they made last year…sounds like basically 8,200 laptops worth, right???

      • So taxing jobs, like at Rudy’s, is the solution? The head tax is inherently flawed because it taxes jobs not profits.

      • they are fighting to get PPE against every other company, NGO, and Foreign Gov in the fucking world during the biggest crisis/shortage we’ve seen. if we had an ounce of leadership and took this serioulsy in fucking January when they were told this could have all been avoided but here we are. but yeah blame amazon employees that are literally working 20 hr days 7 days a week to get the PPE. you dont know your head from your fucking ass.

    • Rebecca says: ” She is manipulating this horrible situation for her own agenda.”

      She sure is, and she should be ashamed.

      Do those who have been laid off as a result of the pandemic really need to get “emergency cash” from the city coffers? When the unemployment money finally comes through (and it can’t happen soon enough), they will get state unemployment payments PLUS $600 per WEEK from the federal legislation. The latter money alone will be enough to easily cover rent for most people, with plenty left over for food, medicine, and other essentials. Correct me if I’m wrong.

  2. @James in the CD: You do realize that it only takes about 150 employees making an average of $47,000 per year to reach the $7,000,000 in annual payroll level. So presumably Rudy’s 600 employees easily reach that threshold, even if making quite a bit less than $47,000 annually. In fact, it would only take an average annual pay of $12,000/year across 600 employees to reach $7,000,000 company payroll (including from CEO, to stylists, to receptionist).

    • Does Rudy’s use the employees-with-benefits or independent contractor business model? I thought rent-a-chair dominated this industry. And I believe Ms. Sawant’s vindictive tax proposal will cause more incentive for independent contractor business models — we can all work like Uber drivers! And Amazon can work from Bellevue.

      • That is definitely beyond my knowledge. I only used recent publicly available information from a local Capitol Hill based company that is struggling under their business being shutdown under COVID-19 to illustrate a point. They have stated in their bankruptcy filing that they have around 600 employees, but what model of employment (independent contractor vs. employee-with-benefits) is outside of my knowledge.

        My point was meant more to illustrate that a company such as Rudy’s, which I assume most people would not consider a billion dollar company worthy of higher taxing, could easily have a payroll over $7M/year if those 600 employees on average are making more than $12,000/year in payroll.

    • I used publicly available information and presented some basic math to give an example of the scale of company that would be taxed under this payroll tax proposal, so why should I ‘STFU’?

      • Because you used math and data, @B. That’s the sworn enemy of any political extremist; left or right. Considered, rational thinking is anathema to those kinds of people and they can’t stand to hear it. Innuendo and vilification from the party leader is what’s to be believed!

  3. It’s to simplistic to think that taxing the top 2% of businesses will solve any social justice problems. This tax will simply be passed oown the line. Workers willl have their wages and hours cut…or ready for this…the businesses will move out of the city. Maybe you shouldn’t try and punish the companies that pay well. How about addressing the real cause of the housing crisis….Landloards. No, not the corporate property owners. The local property owners. They are the ones pricing housing where it is today. Address that and stop forcing successful businesses to move…because then you have nothing.

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