The profits from the Seattle area reaped by Amazon have prompted progressive organizations to call on Amazon and other large corporations to pay taxes to fund solutions for societal issues they play a role in perpetuating, like income and wealth inequality as well as rising housing and rental prices.
Over the past several months, a coalition of progressive and Democratic Socialist organizations, including Real Change, UAW Local 4121, UFCW Local 21, the Housing for All Coalition, Democratic Socialists of America, United Students Against Sweatshops, and Socialist Alternative Seattle among others, joined together to call for an end to homeless encampment sweeps, and a five to ten percent tax on Seattle’s wealthiest corporations to subsidize affordable housing in the city and substantially increase services for its homeless population.
“We are looking at large employers, including the University of Washington, to help address these issues to make sure Seattle doesn’t become a place where only certain people can afford to live,” said Monica Cortes Viharo, an organizer with UAW Local 4121, a union of academic student employees at the University of Washington. “What created the rich pool of workers to take jobs at places like Amazon are public universities like the University of Washington.”
“They also need to do their fair share, especially with the tax situation. Amazon doesn’t pay their fair share of taxes. So that burden usually falls on the work forces in these cities,” Viharo added.
Despite being branded as a progressive example for the rest of the United States, the state of Washington has one of the most unfair tax structures for low-income residents in the entire country.
A recent report published by the Economic Opportunity Institute found “a household earning $25,000 in Seattle winds up paying about $4,200 in all the various state and local taxes — that’s a staggering 17 percent of its income. But a $250,000-income household pays $11,000, which pencils out to just 4.4 percent of income.”
“It’s time to recognize the market is not going to solve the problem. This idea of supply and demand is absolutely a myth, that if you build more, home prices will fall down,” said Seattle City Council Member Kshama Sawant.
“People understand very clearly [that] the so-called market under capitalism caters to the richest buyers, so for a booming city like Seattle. That means housing supply has exploded, but most of the new housing is unaffordable for most working people and more people are being displaced out of the city, as it’s becoming a playground for the wealthy.”
The large presence of corporations in Seattle has contributed to the marginalization of low-income residents who are burdened by the increased costs of living.
The city is also home to one of the largest homeless populations in the United States, many of whom are living on the streets, outside of shelters. In 2017, Seattle’s King County broke its own record with 169 documented homeless deaths.
Seattle’s “solution” for its homelessness crisis has been to focus police resources and funding on destroying homeless encampments.
In 2016, there were at least 600 sweeps uprooting homeless individuals from encampments and disposing of their only belongings. The amount of money spent on these sweeps is unclear, according to Sawant. There is no budget line allocating funds specifically for sweeps. Instead, resources from a variety of different public service departments are expended on conducting these sweeps.
The city’s homeless crisis is intrinsically linked to skyrocketing rental costs. The Washington Department of Commerce noted in a January 2017 report that a $100 increase in median rent is directly correlated to an increase in homelessness anywhere between six to thirty-two percent nationwide.
The Seattle City Council rejected a proposal by a vote of five-to-four in November 2017 that to implement a tax on the city’s wealthiest corporations.
The initial proposal would have raised $150 million annually, creating 750 affordable housing units every year in addition to helping fund homeless services. The council later voted on a narrower proposal to raise $20 million annually from a 6.5 cent tax per hour for every employee working for a business that grosses over $10 million annually.
Amazon recently announced they planned to pause construction of a new office tower and halt expansion of its current headquarters pending the outcome of a city council vote on a revised tax proposal. Revenue raised by the proposal would go toward affordable housing and programs and services offered by Seattle’s Housing and Human Services Department.
From its headquarters in Seattle, Amazon has consistently worked to secure policies and political relationships that specifically benefit their business.
In October 2017, Amazon donated $350,000 to an organization supporting the campaign of Seattle Mayor Jenny Durkan, its largest local political contribution ever. The same month, five Seattle City Council members and several other state and local legislators wrote a letter to Amazon, asking the company to “stay with us and grow with us, both in Seattle and with our sister cities across the state,” as it searches for a location for a second headquarters.
“Most of the politicians, rather than calling out Amazon for its extortionary behavior, sent a craven letter to Jeff Bezos and other Amazon executives: ‘We are so sorry if you feel unwelcome, we need to hit the refresh button,’” Sawant recalled. “I have asked this question many times, when was the last time struggling renters who are being displaced from this city received a letter of apology from the city council?”
Once elected in November 2017, Mayor Durkan added Amazon senior manager of U.S. state public policy Eileen Sullivan to her transition team. (Durkan’s office did not respond to a request for comment.)
“The problem is structural. Amazon is an extreme generator of inequality, which in Seattle takes the form of massive wealth in the city conjoined with rampant homelessness,” said Matthew Stoller, a fellow at Open Markets.
“As Scott Galloway put it, ‘Since 2008, Walmart has paid $64B in corporate income tax, while Amazon has paid $1.4B. This is despite the fact that, in the last 24 months, Amazon has added the value of Walmart to its market cap,'” Stoller added. “Higher taxes on Amazon would help by both moving resources from the company to pressing social needs and relieving some of the pressure on the city’s housing stock by getting Amazon to move some of its activities out of Seattle.”
Amazon co-founder Jeff Bezos recently confessed he has so much money that he does not how to spend it. “The only way that I can see to deploy this much financial resource is by converting my Amazon winnings into space travel.”
Bezos has an estimated net worth of $127 billion. This wealth has been subsidized by corporate tax giveaways, a substantial lack of anti-monopoly enforcement, and lucrative government contracts.
In 2013, Amazon won a government contract to provide cloud services to the CIA and other intelligence agencies, estimated to be worth $600 million over ten years. Amazon is rumored to be the top contender for a multi-billion dollar contract for cloud services from the Pentagon.
Although Amazon generated billions in profit last year, the company paid no federal income taxes. Yet, cities continue to court Amazon to build a second headquarters with special tax breaks, subsidies, with one city even offering to change its name to Amazon.
Sawant argued cities courting Amazon with special favors and tax breaks is detrimental to ordinary people. It will result in skyrocketing house prices wherever they choose to build their second headquarters.
“Amazon did not make 5.6 billion in profit last year and Jeff Bezos did not become the richest man in the world because they create jobs,” Sawant declared “They have become so wealthy because they fight tooth and nail to maximize their profits, use tax favorable locations, and strenuously and systematically use their political influence for favorable policies. “
Though Amazon’s second headquarters promises to bring with it thousands of jobs and economic development to whichever city is selected, a January 2018 analysis conducted by the Economist found new Amazon warehouses resulted in significant decreases in average income for warehouse workers in those areas.
A decline of over 30 percent in Lexington County, South Carolina, a 17 percent drop in Chesterfield, Virginia, a 16 percent drop in Tracy, California, were among the regions researched.
Several reports exposed a brutal work environment for Amazon warehouse workers, including employees urinating in bottles in fear of taking breaks and missing their targets. The company is also one of the top twenty employers for individuals relying on the food stamps, the Supplemental Nutrition Assistance Program, a government program for low or no-income Americans to assist in food purchasing.
Amazon did not respond to a request for comment.