Amazon, Starbucks Furious After Seattle Passes Controversial "Homeless Tax"

Update: Amazon is not alone in its anger at Seattle's plans. Starbucks took a moment away from signaling its virtue and lashed out at the city's new tax. John Kelly, senior vice president, Global Public Affairs & Social Impact at Starbucks, said in a statement.

"This City continues to spend without reforming and fail without accountability, while ignoring the plight of hundreds of children sleeping outside.

If they cannot provide a warm meal and safe bed to a five year-old child, no one believes they will be able to make housing affordable or address opiate addiction.

This City pays more attention to the desires of the owners of illegally parked RVs than families seeking emergency shelter."

Ouch! How long before we hear a new round of boycott starbucks?

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Despite Amazon's decision to halt construction on a new tower and threats to sublease space in another newly built downtown skyscraper, Seattle Mayor Jenny Durkan and the City Council have passed a controversial "homelessness tax" that will require the city's largest companies to pay an additional $300 a year per full time employee based in the city.

Amazon

And while the law has been significantly watered down from the version introduced last month by the city council, Jeff Bezos still isn't happy about it.

To wit, the company said in an official statement that it's still "apprehensive" about expanding the number of employees it has based in the city, as Fortune reports.

"We are disappointed by today’s City Council decision to introduce a tax on jobs," Amazon said in a statement. "While we have resumed construction planning for Block 18, we remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here."

Amazon has resumed construction on its 17-storey Block 18 tower, but we imagine the company now has even more incentive to shift employees to its planned HQ2, though, as CNNMoney warned in a recent piece, Amazon's strident reaction to the proposed tax in Seattle might give some of its suitor city's reason to reconsider (as foolish as that might seem from an economic development perspective).

The law will require employers who generate more than $20 million in gross revenues within the city limits to pay roughly 14 cents per man hour per employee every year - which comes out to roughly $275 per employee. Roughly half of the money collected by the tax will be paid by Amazon.

So, at the end of April, the Seattle City Council released draft legislation that would force companies with revenues of over $20 million in the city to pay 26 cents for each hour worked by a Seattle-based employee, or roughly $540 per head per year. This "head tax" was to apply over 2019 and 2020, generating $86 million a year for social programs, before turning into a 0.7% payroll tax. (The annual proceeds of the tax were originally calculated at $75 million before the council revised its estimates.)

However, with Mayor Jenny Durkan threatening to veto the tax because she was concerned about its impact on employment, the measure had to be watered down to pass.

In the end, the version that passed - unanimously - will see large employers pay 14 cents per head per hour, or $275 per head per year. The tax will now generate $47 million a year, and it will run for five years, rather than turning into a payroll tax after a two-year run.

For what it's worth, Amazon says it has independently done more to ease homelessness than the city government, touting a corporate initiative to donate space to shelter 200 homeless people in one of Amazon's new buildings.

The company said it recently contributed $40 million to a city managed fund for affordable housing.

As Fortune points out, Amazon isn't the only company angry about the tax, which will impact more than 500 businesses. Starbucks, which hosts its headquarters in the city, slammed the city council, calling it incompetent and incapable of taking care of the city's homeless.

Three-fifths of the money raised will go to building new, affordable housing, while the rest will fund emergency services for the homeless.

Amazon wasn’t the only company left grumbling. Starbucks also responded, with public affairs chief John Kelley saying Seattle "continues to spend without reforming and fail without accountability, while ignoring the plight of hundreds of children sleeping outside."

"If they cannot provide a warm meal and safe bed to a five year-old child, no one believes they will be able to make housing affordable or address opiate addiction," Kelley said.

And while that statement should of course be taken with a grain of salt given that it's obviously in Starbuck's interest to do everything it can to pressure the city, the company's spokesman may have a point.

The roughly $50 million raised by the tax would go toward affordable housing initiatives that help the homeless find permanent shelter - while some of the money would go toward an emergency response program for people at risk of homelessness.

But the city has other options that might be more effective at alleviating the city's housing shortage, like changing restrictive zoning regulations.

Instead, by passing the tax, Seattle's mayor and city council have only provided further proof that the city is willing to do whatever it can to combat homelessness, short of actually building more homes.

Comments

MarsInScorpio Buckaroo Banzai Tue, 05/15/2018 - 13:50 Permalink

Of course Bezos is apprehensive about it - he's a greedy psychotic sociopathic bastard with a God-complex unrivaled by any other living human.

I'm wondering when his virtue signaling is going to collapse under the weight of his reality. Making employees piss in a bottle because they can't get off the warehouse floor; putting wristbands on their arms to turn them into cyborgs; paying wages that border on wage-slavery (ask the WaPo newsroom about that . . . of course, the Malicious Seditious Media deserves every kick in the face they receive.) . . . I could go on, but everyone here knows exactly what I'm attributing to His Royal Insanity.

For those who think Soros is the Devil Incarnate, let me introduce you to Bezos.

 

In reply to by Buckaroo Banzai

FreeMoney Bubba Rum Das Tue, 05/15/2018 - 14:01 Permalink

At the same time that the Seattle City council was crying about how to help the homeless maybe 10years ago, they spent $7 million remodeling an outdoor fountain at the space needle. 

Today, they are spending almost  a billion digging a tunnel under the waterfront so they can demolish a 2 story bridge ( Alaskan way viaduct ) that runs between the harbor and the city.  This is so they can reclaim the surface area and lease it out for more huge office buildings and condo towers.

The city only cares about homeless people to the extent that they add more union services government jobs with huge pensions and permanent liberal democrat votes.

The homeless are pawns.

In reply to by Bubba Rum Das

curly adampeart Tue, 05/15/2018 - 14:51 Permalink

No need to wait.  It's already teed up in King county.

That fine idea is a boon to MS13 and other gangs whose biz model includes heroin trafficking.  And human trafficking, murder, extortion, and other unintended consequences.  Seattle and King County government have gone full retard. 

 

If it didn't rain so much, Seattle would be as bad as SFO and San Diego w/all the human poo and pee, and discarded needles, on the sidewalks and streets.  Make sure you get a full course of hepatitis shots before visiting the Emerald City.

 

Even the Birkenstock-wearing aging hippies in Ballard are complaining about the homeless camps that Seattle makes available for the bums, and child molesters, and drug abusers.

In reply to by adampeart

TuPhat Yellow_Snow Tue, 05/15/2018 - 14:16 Permalink

Helping the homeless is not what the tax is really for.  Besides who would want to help a bunch of drug addict alkies that roam the neighborhood stealing anything they can carry to the pawn shop.  Even if they have to pry it loose or break in to get it.  I used to live in what used to be a quiet relatively crime free neighborhood until the church near me began sheltering homeless people.  Everyone in the neighborhood has now had their car broken into and lots of stuff missing.  A homeless shelter is a den of thieves.

In reply to by Yellow_Snow

Able Ape TuPhat Tue, 05/15/2018 - 14:28 Permalink

I volunteer at a homeless shelter in Atlanta from November until May that houses about 120 homeless men.  Each person has to go through a vetting process and there is a very strict policy on alcohol and drugs.  Mess up and you're out on the streets.  Every day they get a hot meal, a place to sleep and a bag breakfast and lunch when they leave in the morning.  If you don't vet the people in the shelter and are just opening it up - there will BE problems...

In reply to by TuPhat