Seattle’s plan to implement a $275 head tax on each full-time employee at large corporations like Amazon and Starbucks has crumbled following pressure from the city’s multinational giants.
Earlier this week, in a 7-2 vote, Seattle’s City Council ruled to repeal the new levy, which sought to offer the city’s growing homeless population close to 50 million dollars in benefits such as cheap housing and other related services.
Following the tax’s initial approval, the city’s business community and members of civil society moved to campaign for its repeal.
As reported by Karen Weise for Bloomberg, interested parties “raised more than $280,000 for the repeal campaign, dubbed No Tax on Jobs, including a $25,000 donation from Amazon,” and “most of the campaign’s funding went to hire an Arizona-based signature-gathering firm called Morning In America.”
By the end of the campaign, more than 45 thousand signatures were collected with only 16,500 required for the tax to be voted on in a referendum.
In a press release confirming the head tax’s repeal, Seattle Mayor Jenny Durkan and a team of seven council members said, “It is clear that the ordinance will lead to a prolonged, expensive political fight over the next five months that will do nothing to tackle our urgent housing and homelessness crisis.”
Amazon and Starbucks Respond to Head Tax’s Repeal
Following this reversal, Amazon Vice President Drew Herdener said that the company believes this was “the right decision for the region’s economic prosperity,” and remains “deeply committed to being part of the solution to end homelessness in Seattle,” continuing “to invest in local nonprofits like Mary’s Place and FareStart that are making a difference on this important issue.”
Starbucks Senior Vice President John Kelly also supported the head tax’s repeal, stating, “We welcome this move by the City Council and believe the best path forward is to implement the reforms recommended two years ago by the city’s own homelessness expert.”
“Starbucks remains a committed partner to government officials, business leaders, and family service providers. Together we must work to bring families inside, once and for all,” Kelly added.
Jon Scholes, who presides over the Downtown Seattle Association, one of many organizations involved in the campaign to repeal the head tax, said Seattle’s fight against homelessness has been “inconsistent, sometimes incoherent.”
He added that “the politics of this jobs tax sucked a lot of energy” from other efforts to help the city’s homeless.
With the Head Tax Repeal, What Now for Seattle’s Homeless?
The head tax’s repeal, however, has raised several questions as to what Seattle will ultimately do to curtail homelessness in the city.
Andrew Coak of DESC, the city’s largest services provider for the homeless, said, “Every day, we turn clients away because we don’t have enough beds and we don’t have enough staff to provide long-term case management to clients in the system.”
He added, “On behalf of those clients, I implore the businesses who opposed the Employee Hours Tax to find a revenue stream and a plan you can support. It’s literally a matter of life or death for the people I work with.”
Some companies have vowed to continue giving back to the community and assisting the city in providing better living conditions for its homeless population.
Starbucks, which has contributed millions to the No Child Sleeps Outside campaign, will organize a meeting “focused on family homelessness next Tuesday at its Seattle headquarters, inviting government officials, business leaders and family service providers, facilitated by the consultant hired by the city of Seattle in 2016.”
Many companies, although, believe the city of Seattle has not found the most efficient way to allocate its revenues to combat homelessness.
Seattle Metropolitan Chamber of Commerce’s President Marilyn Strickland thinks local companies want to be involved and provide the city with much needed assistance, but “there is a lack of trust that the revenue will be used effectively.”
On the opposite side of the political spectrum, Councilwoman Teresa Mosqueda, who remained in favor of the tax, said she was against its repeal as long as there wasn’t “a replacement strategy to house and shelter our neighbors experiencing homelessness.”
"We cannot wait months or until next year for another proposal or process while people are sleeping in our parks and on our streets," she added.
According CNBC and the Associated Press, “the Seattle region had the third-highest number of homeless people in the U.S. and saw 169 homeless deaths in 2017.”
How can a government balance its social responsibilities with keeping large corporations happy? Any thoughts on this issue? Share it with us in the comments section!