In a controversial move, the Seattle city council voted unanimously to impose a tax on large businesses. While Seattle taxes Amazon and other area heavy hitters, the city is hoping the move will generate more revenue to use towards cleaning up the city’s homeless problem.
The vote was 9-0 and like that, Seattle taxes Amazon. To some, this may seem like biting the hand that feeds you. After all, Amazon was almost solely responsible for setting the city’s economy into overdrive during the late 90’s an early 2000’s.
The measure imposes a “head tax” which translates to roughly $275 per employee per year. Amazon is not the only business affected, however. In all, some 131 other Seattle businesses will be subject to the tax which is expected to raise an additional $44.7 million per year for five years.
An original plan called for a $540 per employee tax per year. After several years, the tax would be converted into a 0.7% payroll tax. However, Seattle Mayor Jenny Durkan had promised to veto that proposal as being excessive.
With the tax, the city hopes to address its growing homeless problem. 60% of the revenue raised will go towards building affordable housing in the city. The remaining 40% will be put toward emergency services for the homeless.
“This legislation will help us address our homelessness crisis without jeopardizing critical jobs,” Mayor Durkan said in a statement.
However, while the city council voted unanimously for the measure, it is not without its detractors.
Many argue that the measure is insufficient and doesn’t address the true problem while punishing businesses including Amazon which was one of the chief architects of Seattle’s economic boom.
Amazon did not create the problem. However, their influence did contribute to the rising cost of living in the city. When cities experience high costs of living, especially with regard to housing; homelessness is an inevitable side effect.
So while Seattle taxes Amazon and other large businesses, it will do little to stem the rising cost of living. In fact, cost of living was the most griped about issue facing Seattle area residents in a recent survey.
A new tax on businesses may provide short-term relief. However, it won’t do much to bring costs down to a more manageable level.
Is It Time to Leave?
For Seattle residents, the rising cost of living is a problem. And while the new tax doesn’t’ directly impact residents; it may have indirect consequences. Detractors warn that the tax could scare off new investment into the region.
The news was not welcomed by Amazon.
“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 Vice President Drew Herdener
Few people will use this as an excuse to flee Seattle, however if rising costs have you wary: maybe it’s time to start thinking about a new home?
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