SEATTLE, WA – A “powerful faction of corporations” pressured a majority of Seattle elected officials to agree to repeal the controversial head tax – and it might be gone as soon as Tuesday afternoon, less than a month after it was approved.
The Seattle City Council unanimously passed the head tax on May 14, and Seattle Mayor Jenny Durkan signed the law two days later. The tax was to go into effect on Jan. 1, 2019, and would have charged companies that earn $20 million or more in revenue $275 per employee per year. The estimated $47 million in annual revenue would go toward alleviating the homelessness crisis in Seattle – even though some estimates put the actual price tag of a solution closer to $400 million.
Local corporations were outraged over the tax, with Amazon even threatening to halt growth in Seattle. After the tax passed, a group called No Tax On Jobs formed to put an initiative on the November ballot to repeal the tax. According to the group, it had gathered the requisite 20,000 signatures for the ballot measure.
Councilwoman M. Lorena Gonzalez, who had supported the head tax, blamed corporations for the sudden reversal. Gonzalez is among the seven Council members ready to vote for repeal. Council members Teresa Mosqueda and Kshama Sawant were not in favor of repeal.
“I am deeply troubled and disappointed by the political tactics utilized by a powerful faction of corporations that seem to prioritize corporations over people,” Gonzalez said in a statement. “The consequences of delaying action will be felt most profoundly by the thousands of people currently suffering while seeking stable housing and emergency shelter in our city.”
Durkan said that the political fight over the tax would distract from helping the homeless.
“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. These challenges can only be addressed together as a city, and as importantly, as a state and a region,” Durkan said in a statement.
Sawant accused Durkan and the other Council members of capitulating to businesses that opposed the tax, like Amazon and Starbucks. Both of those corporations – and many others, including CenturyLink, Dick’s Drive-In, Vulcan, Kroger – either pledged to or have donated thousands to the No Tax On Jobs campaign.
“This is a capitulation to bullying by Amazon & other big biz. This backroom betrayal was planned over weekend w/o notifying movement,” Sawant wrote on Twitter, referring to the movement of activists who agitated in favor of a head tax.
Multiple groups – including Sawant’s Socialist Alternative, Seattle Democratic Socialists of America, Working Washington, and the Transit Riders Union – advocated for the tax beginning in 2017.
The region is in the midst of a homelessness crisis. The 2018 point-in-time (PIT) count found more than 12,000 homeless people in King County, with a majority living in Seattle. About half live outdoors or in a vehicle. The city declared a state of emergency in 2015 over the homelessness crisis – but the problem has only gotten worse, exacerbated by rising housing costs as the tech industry flourishes.
King County now has the third-highest homeless population in the U.S. behind New York City and Los Angeles. Mosqueda called the crisis “dying on the doorsteps of prosperity.”
“While a vote may go forward to repeal the tax, our homelessness and housing affordability crisis gets worse,” Mosqueda said in a statement. “We have people who are dying on the doorsteps of prosperity, and our neighbors and friends worry about being able to afford to live in the city while we have a booming economy.”
King County Executive Dow Constantine, who has long been opposed to the head tax, released a statement too. He called for a “unified plan” in the county. Constantine joined with disgraced Seattle mayor Ed Murray in April 2017 to propose a 0.1 percent county sales tax increase to fund homeless services.
“While I had concerns about this specific revenue source, it is clear that addressing several root causes of homelessness will require more and better focused resources. It is equally certain this crisis demands a region-wide response,” he said.
The Seattle City Council will meet at noon Tuesday at City Hall to vote. The only item on the agenda is the head tax repeal.
Image via Seattle Channel