Economy

Redfin CEO breaks with tech community on Seattle head tax — GeekWire

Redfin CEO breaks with tech community on Seattle head tax — GeekWire”

The city council voted for the tax unanimously, claiming that it will help raise $47 million to face the recent housing affordability problem due to the recent booming economy. Tensions are still high. Sponsors of the tax said Seattle's biggest-earning businesses should bear some burden for easing a shortage in low-priced housing that they helped create by driving up real estate prices to the point where the working poor and many middle-class families can no longer afford to live in the city.

After getting moved to a vote by the city's Finance and Neighborhoods Committee (passed narrowly 5-4), Seattle Mayor Jenny Durkan released a statement that she could not support the tax.

"...do not capitulate to Bezos' bullying...we need $400 million a year to solve this problem, don't water this down".

While the politics may be fractious, the gravity of Seattle's housing crisis is well understood. The Institute for Children, Poverty & Homelessness found that in the 2015-2016 school year, one in 16 children in Seattle were homeless.

"Now, more than ever, we want the people who hear the business community say "no" on the head tax to also hear, even more loudly and clearly, what we'd say "yes" to", Kelman writes. "They are dying on our streets today because there is not enough shelter".

After weeks of continuous meetings, the city council of Seattle has made a decision to impose a tax on the biggest firms based in the city, including Amazon and Starbucks, to raise enough money to face homelessness.

The conflict is growing at an interesting time for Amazon, with the company now moving full speed ahead with its plans to start building its second headquarters as early as next year.

Sawant would be wiser to regard Amazon's response not as extortion but as a harbinger of things to come, if the anti-business climate persists. One state Republican lawmaker said he would seek legislation next year to make clear that a city tax on employees, wages or hours is illegal.

The amount of local and state taxes that Amazon pays in its home state of Washington amounted to $250 million.

The head tax is a relatively minor expense for Amazon, which earned $177.9 billion in revenue in fiscal 2017 and more than $51 billion in the first quarter of 2018 alone.

Also, Amazon has warned that imposing such tax will risk about 7,000 new jobs. Following the vote, an Amazon spokesperson indicated the company will continue construction but will remain cautious in the midst of the council's "hostile approach and rhetoric toward larger businesses". Starbucks, which had fourth-quarter profits a year ago of $788.5 million, was also loud in its opposition. The city says it will use the new funds to combat homelessness.

"If they can not provide a warm meal and safe bed to a 5-year-old child, no one believes they will be able to make housing affordable or address opiate addiction", said John Kelly, Starbucks' senior vice president of global public affairs and social impact.

Amazon's hardball tactics have garnered concern among cities bidding to host Amazon's planned second headquarters. "It certainly doesn't send a message that you expect to be a part of the community".

Kniech joined more than 50 local lawmakers who sent an open letter to Seattle leaders and residents on Monday, supporting the tax and criticizing Amazon's resistance.



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