During the coronavirus pandemic, Seattle City Council members have launched another effort to tax Amazon and other large corporations.
Amazon poured $1.5 million into Seattle City Council races in 2019 after it managed to repeal a head tax in June 2018 to raise around $20 million annually. It came up short in its attempt to oust City Council members who led that tax movement
While the outbreak remains intense, Amazon’s dominance in the retail industry in the United States has grown.
Amazon’s stock price soared over 25 percent from March to April. Amazon CEO Jeff Bezos’ wealth increased by at least $24 billion. But the corporation has faced scrutiny from workers over its response to the pandemic, firing at least six workers who openly criticized Amazon for inadequate safety protections.
“What we are talking about is taxing the largest two percent of corporations in the city. These are corporations that are the most stable,” said Kshama Sawant, one of the Seattle City Council members championing legislation to tax Amazon. “It’s corporations with massive cash reserves in contrast to households with no income because the vast majority live paycheck to paycheck.”
Under the proposal, Amazon would face a 1.3 percent payroll tax, which Sawant equates to less than a one percent tax overall.
City Council members seek to raise $500 million annually, including $200 million in coronavirus cash assistance immediately, with the rest of the funds used to support affordable housing units and “Green New Deal” infrastructure.
“We have to pinpoint these numbers because it exposes the lies of big business when they cry foul on this tax. Oh, the sky is going to fall if you tax us. Really? It is less than a one percent tax rate. Don’t tell me you are so fragile you won’t survive when a household that makes $25,000 per year is taxed at a staggering 17 percent tax rate,” added Sawant.
Washington state has one of the most regressive tax codes. The Tax Amazon movement is an effort to reform that regressive tax code, combat wealth and income inequality, and provide the funding and resources necessary to help poor and working families recover from the pandemic.
Public hearings were held on April 22 and April 29, with a city council vote expected to occur on May 13.
Karla Esquivel has owned Andaluz, an independent clothing store and gift shop in Seattle, for 16 years, and she supports the proposal to tax Amazon.
Thus far, Esquivel hasn’t been able to obtain any of the relief fundsdirected to businesses to keep them afloat during the pandemic. She doesn’t have access to unemployment benefits and taking on more debt through a loan isn’t a viable option for her small business to survive.
“If these economic issues and disparities are not addressed now, things will only get worse, and I am afraid we will see big box stores, chains, and Amazon [take] the place of our small business landscape,” said Esquivel.
Nearly 900,000 people in Washington have filed for state unemployment benefits during the pandemic, and that number is expected to surpass 1 million over the next week. The City of Seattle’s Budget Office estimates up to a $300 million shortfall in its budget by the end of 2020.
Outside of New York and Los Angeles, Seattle has the largest homeless population in the U.S., with around 12,000 residents experiencing homelessness at any given time.
“This is fundamentally about addressing the deep structural problem we have in the way we fund services in the city,” said Seattle City Councilmember Tammy Morales, a leader in the push to pass the “Tax Amazon” legislation.
“This crisis has shown us our economic infrastructure, our social safety net is full of cracks. Small businesses can’t go two weeks without collapsing, households are going without income.”
Morales continued, “Everything in the way we structured our society is really favoring the wealthy, the well connected, powerful interests. It’s a really important time to rethink how we provide local services, how we pay for local services and once we get through this crisis, how we rebuild our communities.”
However, the “Tax Amazon” movement faces significant opposition from corporate business leaders and some elected officials in Seattle.
In a recent local news interview, Seattle Mayor Jenny Durkan, a Democrat, said taxing Amazon will never happen. “I think it’s irresponsible for anyone to say that that’s even possible.”
Alex Pedersen, the proposal’s most vocal opponent on the City Council, was backed by the Civil Alliance for a Sound Economy (CASE) when he campaigned for election in 2019. Pedersen received nearly $1.5 million in donations from Amazon.
Pedersen wrote an op-ed opposing the tax in the Seattle Times with Matthew Gardner, the chief economist for Windermere Real Estate, the largest regional real estate company in the western United States.
The op-ed argued the tax will cost residents jobs, like opponents of Seattle’s $15 minimum wage bill argued in 2014.
Gardner and Pedersen also maintained federal and state relief programs are strong enough to address structural problems.
Sawant and progressive proponents of the “Tax Amazon” proposal disagree. They contend the coronavirus pandemic has further exposed glaring racial and wealth inequities in the U.S., and the crisis demands emergency legislation to address inequality.
“We won’t accept the burden of this crisis being placed on our shoulders. We’re done with that. We’re done with austerity politics. We’re opposed to the neoliberal agenda. We want to fight for our rights,” concluded Sawant.