Seattle officially repeals tax on companies like Amazon, Starbucks

The glass spheres at the Amazon headquarters in Seattle

City leaders said they plan to repeal a tax on large companies such as Amazon and Starbucks as they face mounting pressure from businesses, an about-face just a month after unanimously approving the measure to help pay for efforts to combat a growing homelessness crisis.

Seattle's city council is backing off the so-called "Amazon tax", dubbed by critics as a "tax on jobs". "Hopefully it's the beginning of something".

The tax, which is now scheduled to take effect in January 2019, amounts to $275 a year per full-time employee of the highest grossing businesses in Seattle. It comes as a group formed by funding from numerous city's largest employers and business groups including the downtown chamber opposing the employee hour tax announced over the weekend it had collected more than the needed signatures required to put a repeal initiative on the ballot.

People against the head tax needed about 17,600 signatures to get the option to repeal the tax on the ballot.

The council voted 7-2 after supporters and opponents packed a meeting with signs saying, "Tax Amazon, housing for all" and "No tax on jobs", with some shouting for more time to discuss the issue.

At a rally held before the vote, City Councilmember Kshama Sawant criticized the mayor and railed against the council for considering a repeal.

The council struggled to conduct the vote at the meeting's conclusion as protestors chanted "stop the repeal", drowning out councilmembers as they attempted to cast their ballot.

"We heard you", the city's statement said.

Monday, Mosqueda said she could not support any repeal that did not include a replacement plan.

"I'm in a position where I will vote to repeal this", said councilmember Mike O'Brien.


Sawant characterized the repeal as a "cowardly betrayal" of working class Seattleites and a "capitulation" to business interests.

"I think we have to understand that the logic of bowing to big business points only in one direction, to a race to the bottom for the rest of us", she said. "If you thought this was going to be easy, if you thought big business was not going to mount a serious campaign of opposition, spread lies and misinformation, then you have been living under a rock".

The council will now be looking at alternative measures to tackle the homeless crisis. "I can not in good conscience vote to repeal this proposal without a replacement", said Mosqueda.

In a long speech that emphasized the importance of consensus-building, Mosqueda implored businesses to work with the city on solutions. "A hollow handshake and a broken promise is not good practice".

Seattle Metro Chamber of Commerce head Marilyn Strickland praised the turn of action from the city's leaders.

Advocates for the homeless decried the repeal. "Where will that money come from if we don't have the courage to take it?" said Tim Harris.

"Every day, we turn clients away because we don't have enough beds and we don't have enough staff to provide long-term case management to clients in the system", Andrew Coak, a member of the task force and case manager at the Downtown Emergency Services Center, said in a statement.

A one-night count released last month showed that more than 12,000 people experience homelessness in King County.

And many have offered the internet giant billions in incentives to choose their city for the HQ2 project that would bring about 50,000 jobs to the winning region.

This is a breaking story and will be updated shortly.

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