Speed Reads

Dearth and Taxes

Seattle passes compromise antipoverty 'head tax' on big business over objection from Amazon

The Seattle City Council unanimously passed a controversial tax on big businesses Monday to raise revenue for fighting homelessness. The $275-per-employee "head tax" will affect only businesses with more than $20 million in gross revenue, and the proposal that passed Monday evening was a compromise with Mayor Jenny Durkan (D), who had threatened to veto the $500-a-head tax that the council passed Friday on a 5-4 vote. The new version, expected to raise about $47 million a year for low-income housing and homelessness programs instead of $75 million, also sunsets after five years if it isn't reauthorized.

Amazon, which will pay a large share of the head tax and whose rapid expansion has helped drive up the cost of housing in Seattle, led opposition to the proposed tax. It said it is still "disappointed" with the compromise tax but will resume construction on Block 18, a 17-story office tower in downtown Seattle. It had halted planning on that and another office tower pending the outcome of the vote, leading to charges of blackmail from head tax supporters. Amazon has grown to about 45,000 employees in Seattle, spread across 40 buildings accounting for about 20 percent of prime Seattle office space. Seattle has strained to accommodate the influx of Amazon workers, and the median house price has shot up to $777,000.

Seattle and King County declared a state of emergency in 2015 over its homelessness problem, but gentrification has only accelerated since then.