The "head tax", as it is commonly called, was pushed principally by socialist city council member Kshama Sawant and the Service Employees International Union (SEIU) - one of the largest labor unions in the U.S.
A council chamber packed mostly with rowdy, shouting supporters of the tax erupted in cheers and sign waving Monday once the 9-0 vote was recorded. A $500 per employee tax would equal a $20 million cost for a company like Amazon.
Many divergent interests joined together to oppose the head tax, from local activists to unionized ironworkers who lost work when Amazon paused construction on a Seattle facility while waiting for the outcome of the vote. One state Republican lawmaker said he would seek legislation next year to make clear that a city tax on employees, wages or hours is illegal.
In response to the rising likelihood of the tax plan's passage, Amazon announced earlier this month that it would halt its downtown tower construction until the council's vote and that it would begin looking at Bellevue for potential office space. This disclosure comes amidst a pushback by the online retail giant against a proposal by the Seattle City Council which aims to tax large corporations based on the number of employees.
"This City continues to spend without reforming and fail without accountability, while ignoring the plight of hundreds of children sleeping outside".
"If they can not provide a warm meal and safe bed to a 5-year-old child, no one believes they will be able to make housing affordable or address opiate addiction", said John Kelly, Starbucks' senior vice president of global public affairs and social impact.
But as the big Seattle companies, which are among the biggest in the USA and the world, are criticizing the legislation, supporters of the law, such as workers unions and church groups, said the tax would help the critical housing situation of the city, as the income gap increases and makes it more hard for the working class to pay rent. Seattle says it will get $47 million in new revenue from the tax, according to the Times. The city spent $68 million on homelessness last year and plans to spend even more this year. He says business should be willing to "step up" and fund programs to fight homelessness if necessary but taxes should be a last resort.
Other cities have put in place similar taxes, but critics have said Seattle's tax could threaten the booming local economy and drive away jobs. Amazon went on to say that the city doesn't have a revenue problem, it has a spending efficiency problem.
Jan Gee, CEO and President of the Washington Food Industry Association (WFIA), said that her industry's problem is with the tax's structure.
"I think you are seeing folks in Seattle who are not conservative by any stretch finally starting to question just how far left the city council has gone", Nelson said.
"They're driving this economic engine", he said. That approach makes sense only if the businesses that have made Seattle a thriving city are nailed to the ground.