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Seattle will, indeed, ‘Tax Amazon’ as $200M+ JumpStart tax on big businesses approved

People living unsheltered during the COVID-19 outbreak (Image: City of Seattle)

Mosqueda

Seattle City Council budget chair Teresa Mosqueda thanked District 3 representative Kshama Sawant for the “dialogue” Monday as the body approved Mosqueda’s “JumpStart” plan for a new “progressive revenue” tax on the largest Seattle businesses.

“Seattle residents have made it clear – now is not the time for government austerity or divisiveness,” Mosqueda said in a statement following Monday’s full council approval. “Investing in communities of color, small businesses, and community health leads to a more robust and resilient economy. We are in the midst of a health and economic crisis that even a strong economy like Seattle may not be able to recover from quickly.”

“Thank you to the large coalition of community organizations who supported this plan – investing in Seattle is investing in our economy and our future,” Mosqueda said.

Beginning January 1st, Seattle companies with payrolls $7 million and up will be taxed on pay to employees making more than $150,000 per year. The tax rate ranges from 0.7% to 2.4% with tiers for various payroll and salary amounts. It is expected to generate more than $200 million a year for for a city facing a massive COVID-19 crisis-ripped hole in its budget forecasts and in desperate need of revenue for hoped expansion of housing, business assistance, and community spending. Late amendments approved include an expanded 20-year sunset clause that puts the tax in place for two decades. Grocery businesses and independent contractors are exempt.

Sawant and Socialist Alternative’s Tax Amazon campaign championed the Mosqueda proposal as it became clear the council would back the tiered approach to taxing large companies over a more aggressive, flat approach. The campaign has been organizing a possible ballot measure to push a business tax forward. Monday, the only two council members to side against the JumpStart plan, Alex Pedersen and Debora Juarez, voted against the plan saying they preferred that voters decide on the tax.

The summer 2020 rebirth of a Seattle tax on big businesses comes two years after 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 only about $50 million annually.

Opposition remains. Monday, the Seattle Metropolitan Chamber of Commerce, the city’s most vocal opponents to its “progressive revenue” taxing efforts, again criticized the plan  coming “at a time when the depth and breadth of this crisis is still unfolding” —

Today’s new payroll tax pins Seattle’s economic future on local businesses remaining strong, at a time when the depth and breadth of this crisis is still unfolding. All of our leaders should be thinking day and night about how to get businesses back open and people back to work safely. Instead, the Council turned immediately to new revenue and passed one of the largest tax increases in Seattle’s history. With that comes even more responsibility to demonstrate how they are using the city’s resources to deliver on critical services and get Seattle on track for an equitable and inclusive recovery.

Mayor Jenny Durkan is also likely sidelined in any further opposition after Monday’s 7-2 veto-proof vote.

The Tax Amazon effort, meanwhile, is in full support. Following Monday’s vote, Sawant trumpeted the approval with the full force of her political power with press releases from both Tax Amazon and her city council office.

““Today’s vote to pass an Amazon Tax in Seattle is a historic victory for working people. This victory was hard fought and it was hard won,” Sawant said in the city press release. “The ONLY reason this passed is because of the strength of our movement. A movement that wouldn’t give up, and that faced down a seemingly endless series of obstacles: from the shameful attempts of corporate Democrats in the State Legislature to pass a ban on municipal big business taxes, to unfounded delays in the City Council, to a pandemic and lockdown which prevented signature gathering, to relentless attacks in the corporate media in Seattle and nationally.”

Slow recovery ($300M) or rapid recovery ($210M), Seattle preparing for COVID-19 to rip big hole in city budget

“We are winning because of the determination of workers and socialists to smash all obstacles and find a path to victory,” she said.

In the Tax Amazon statement, the campaign said “the fight is not over.”

“From day one, we’ve put forward a dual strategy of fighting for our movement’s legislation in the City Council, but having the option of moving forward on a ballot initiative if City Council failed to pass a strong Amazon Tax,” Eva Metz, Tax Amazon campaign manager said. “On Wednesday, July 8, our movement will hold our fourth Action Conference online, to democratically decide next steps for our movement. This will include discussing whether to submit signatures for the November ballot, preparing to defend against a potential repeal referendum from big business, and how to best build off this historic victory, including spreading the Tax Amazon movement nationwide.”


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22 thoughts on “Seattle will, indeed, ‘Tax Amazon’ as $200M+ JumpStart tax on big businesses approved

  1. I’m sure this is going to court before Amazon or anybody else pays a dime. I can’t recall the legal troubles the first Tax Amazon plan had, but I believe it was unconstitutional under state law. Does anybody have a sense of where this goes next and how long that process will take?

  2. If this is ruled constitutional by the courts, could we have the company’s that are taxed draw up a plan on how to spend it. I do not trust the City of Seattle with 10 cents of that tax money. At least we would have something to show for it. These businesses didn’t make profits by be wasteful like the city has proved time and time again.

  3. I’m proud to have helped collect even a small number of those 30k+ signatures which were the only reason this tax saw the light of day.

    While compromise is inherent to organizing, ultimately this victory lies with the people of Seattle who volunteered, protested, signed the petition, and did the work to make it happen.

    • The sad this is you actually thing this will lead to a victory.. Sweet summer child.. Amazon will restructure like Google/Alphabet did leave Seattle with nothing to tax and all that effort all that borrowing the city will have done will be for nothing.. your efforts will have been for nothing..

      • The cost of Amazon leaving is less than people… The transition has already started and Covid accelerated it. Good luck when all of the restaurants, apartments, and coffee shops go out of business as Amazon employees leave. If Amazon moves the majority of its Seattle employees to permanent remote work, then it’s just a matter of breaking the lease costs. Those costs are less than the imposed tax. Again, good luck

  4. This is Mosqueda’s accomplishment and not Sawant’s, although the latter is trying to take some credit for it. Sawant wants a much larger tax, so this really is a defeat for her.

    • It’s neither’s: see my comment above, but this accomplishment belongs to the volunteers and activists who put in the work and got the signatures to force the council into action.

    • Fine. Let those companies that don’t like it move. It will reduce costs for others that want to be good corporate citizens and share in both the burden and the benefits of a more just and equitable city. The only alternative is higher regressive sales taxes, more inequality, more austerity-generated misery and more social upheaval. The critics of this tax haven’t offered a third option, because there isn’t any.

  5. While there is no doubt we need comprehensive statewide tax reform and to replace our sales tax with a state wide marginalized income tax, I fear that this tax will have unintended consequences by only including jobs within the city limits.

    As most of the companies that are targeted by this tax are now mostly working remotely this will only encourage them to make remote work permanent. Then they will only be obligated to pay this tax to employees who live in Seattle. They could provide incentives to employees to move out of the city and into the burbs, where they won’t have to pay the tax.

    This tax is needed, but it needs to be statewide or at the very least countywide. It’ll be interesting to see how this plays out. I’d hate to own commercial real estate in downtown Seattle right now.

    • I think Sawant is a bad actor whose goal is to drive people out of Seattle. Sawant came to the US via a visa provided to her ex-husband that works at Microsoft. I question her motivations.

      • I think Sawant is a bad actor whose goal is to drive people out of Seattle.

        If your opinion is true, she’s not doing a very good job.

        Her district is the densest in Seattle and one of the most desirable to live in, with no shortage of people trying to move in.

    • Now that Seattle has moved forward what is the incentive for anyone else in the county or state to do likewise? Most of the homeless/drug program is already located in Seattle and neighboring cities can use this as leverage to convince business to move. If I recall that is exactly what Tacoma did the first time Seattle passed the head tax in 2018. I seriously doubt any of the surrounding cities are going to throw Seattle a lifeline on this one.

  6. Sawant’s rant threatening violent revolution and an overthrow capitalism was absolutely nuts. She is the avatar of the boogie man the right thinks thinks the left is. Such a shame.

    • You are freaking out over such a small tax lol calm down.

      If Sawant was the only one who wanted this type of change, it wouldn’t currently be happening. Her positions are totally reasonable and are becoming more mainstream. There is nothing you can do about it.

      • That last line is a joke what’s becoming more stream is socialism communism and this woman is absolutely positively in the tank to overthrow the capitalistic system which brought her to this country she’s another ungrateful POF who should be deported

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