Seattle City Council Member Kshama Sawant and activist organizations are regrouping after a head tax on Amazon and other large corporations was repealed in May.
All nine Seattle City Council members voted unanimously in favor of enacting a head tax of $275 on all full-time employees from the city’s highest grossing corporations. The tax would have funded an average of $47 million annually for affordable housing and homeless services.
Shortly after it passed the city council, Amazon, Starbucks, and other Seattle corporations heavily funded a “No Tax on Jobs” campaign to repeal the tax, which included hiring canvassers to collect signatures for a ballot referendum in November. Amazon and Starbucks donated $25,000 to the campaign.
The campaign by corporations led the Seattle City Council to swiftly repeal the tax in a 7-2 vote on June 12.
“There’s no sugar-coating it. We lost,” said Katie Wilson, general secretary of the Seattle Transit Riders Union. “There is simply no acceptable solution but for big businesses and the wealthy to start chipping in. They can’t avoid this social responsibility forever, and we’ll keep working to make sure that day of reckoning comes sooner rather than later.”
Amazon has a history of paying petition canvassers to gather signatures in favor of policies that benefit their business.
In 2011, the Los Angeles Times reported Amazon paid petition workers to collect signatures in front of retail store competitors to overturn a law that stipulated Amazon must charge state sales taxes on its products. Amazon ultimately settled with California legislators to delay collecting sales tax for a year.
Despite Amazon’s opposition to paying taxes, it has immensely benefited from taxpayer subsidies.
A study published by the Economic Policy Institute in February 2018 found “by the end of 2016, Amazon had likely received over $1 billion in state and local subsidies for its facilities.” Contrary to the perceived economic benefits of Amazon’s fulfillment centers, the study also found the opening of new fulfillment centers did not improve local employment rates or wages.
The latest overturning of a historic progressive tax on Amazon and other corporations is indicative of how politically powerful Amazon has become.
“What happened was Amazon snapped its fingers, issued threats, and the highest legislative body in this city came to its knees,” Seattle City Council Member Kshama Sawant said. “What we saw was the entire Democratic establishment, including well-meaning progressive democratic politicians, completely cave to big business and really expose the political strategy of the Democratic Party.”
According to Sawant, that Democratic Party strategy is only trying to change or win policies where big business, billionaires like Jeff Bezos and corporate politicians, are also in support.
“What is acceptable to the ruling class is as far as the Democratic Party is willing to go,” Sawant added. “And so when big business, as it did in this case, fights ferociously against even a modest tax on themselves so we can fund solutions for the affordable housing crisis in our city, the Democrats have zero strategies to face that.”
Sawant’s office was notified of her fellow city council members’ effort to repeal the tax on June 11, a day before public comments were held, and the council scheduled the repeal for a vote.
A week prior, the rest of the city council participated in private meetings on overturning the tax.
Recently, a lawsuit was filed alleging the Seattle City Council and Mayor’s Office violated the Open Meetings Act by privately meeting on the tax before publicly announcing their intent to repeal it. The Seattle Mayor’s Office denied the allegations.
Though the Seattle City Council successfully repealed the head tax, no replacement or alternatives were offered to solve the affordable housing and homeless crisis in Seattle. The lack of a replacement inspired Council Member Teresa Mosqueda to join Sawant in voting against repeal.
In the upcoming public meeting organized by Sawant and proponents of the head tax, activists will discuss strategies to ensure the city council and mayor’s office come up with progressive revenues to address homelessness and fund affordable housing.
The high rate of homelessness in Seattle is largely connected to the city’s high rents and lack of affordable housing.
In January 2017, the Washington Department of Commerce reported that a $100 increase in median rent directly correlated with an increase in homelessness, anywhere between six to thirty-two percent nationwide.
The National Low Income Housing Coalition’s “Out of Reach” report published on June 13 found an individual needs to make over $61,000 annually to afford a modest one-bedroom apartment in Seattle.
Apartment Listing, a rental listing site, published a report in November 2017, which found 46.8 percent of renters in the Seattle Metropolitan area pay more than 30 percent of their income on rent.
Seattle is ranked the fifth most expensive city in the United States for renters based on U.S. Census data from 2016.
“It’s a lesson in class struggle,” Sawant concluded. “When we take on the billionaire class, this is what it looks like.”
“We will have to build our movements in such a deterring way that there is no room for softness like ‘oh maybe if we talk to Jeff Bezos he will agree with us.’ No. He will fight you tooth and nail to the very end. It’s important for us to wise up to this nature of class struggle.”