'Head tax' proposal sets up a showdown between Seattle and Amazon

Seattle's city council is set to vote Monday on an "employee head tax," a proposal that would levy a 26-cent tax on every hour each employee works at businesses that gross at least $20 million per year. That comes out to about $500 per employee annually, collecting around $75 million for the city every year, of which nearly a third — $20 million — would come from tech giant Amazon alone.

Amazon opposes the tax measure and has suspended plans to expand its Seattle office space to accommodate 7,000 to 8,000 more employees. If the tax passes, the company says, it may never occupy that space. "I can confirm that pending the outcome of the head-tax vote by City Council, Amazon has paused all construction planning on our Block 18 project in downtown Seattle and is evaluating options to sublease all space in our recently leased Rainier Square building," said Amazon representative Drew Herdener.

Supporters of the head tax have labeled Amazon's actions "bullying." They are enthusiastic about the purpose of the potential new tax revenue, which would be devoted to affordable housing and homelessness programs. Homelessness has steadily risen in Seattle in recent years, as has city spending on housing.

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The tax is expected to be approved by the city council but vetoed by Seattle Mayor Jenny Durkan (D), who believes the plan "hurts workers" as currently drafted.