
Seattle officials repeal tax on large companies - danso
https://www.nytimes.com/2018/06/12/technology/seattle-tax-amazon.html
======
aaronbrethorst
The messaging on the part of the folks in favor of the Employee Hours Tax
(EHT) was somewhere between terrible and nonexistent. The messaging of the
anti-EHT folks was simple and persuasive.

I had fully expected that the EHT would be repealed by ballot initiative come
November, but didn't expect that the city council would just sort of roll over
and repeal it.

Erica Barnett, a local journalist, has a far more insightful look at what
actually happened here than the somewhat superficial look the NYT provides:
[https://thecisforcrank.com/2018/06/12/todays-head-tax-
defeat...](https://thecisforcrank.com/2018/06/12/todays-head-tax-defeat-has-
lessons-for-both-sides/)

~~~
plinkplonk
Great article. Much better than the New York Times article.

From TFA

"Is this really all about Amazon?

No, but you’d be forgiven for thinking it was. Council member Kshama Sawant,
who exhorted her supporters to “Pack City Hall!” in a mass email yesterday,
has consistently characterized the head tax as a “tax on Amazon” and Jeff
Bezos, whom she described earlier today as “the enemy.”

Demonizing individual corporations is rarely a path to building broad
community coalitions, and that’s especially true when that corporation is
Amazon, whose name many Seattleites (rightly or wrongly) consider synonymous
with “jobs.” This is one reason head tax opponents were able to so easily spin
the head tax as a “tax on jobs,” and to get ordinary citizens to gather
signatures against a tax that would really only impact the city’s largest
corporations."

That seems like bad politics. Isn't it politics 101 to anticipate that the
affected parties (here Amazon and Starbucks) would push back? And if enough
political support to overcome this hasn't been built up in the first place,
why would someone try passing the head tax at all? This is like playing chess
looking only one move ahead.

I don't get it.

Help me understand?

(Due Disclosure: Not a US citizen, nor a Seattle resident, I don't have a
position, pro or anti, on the tax measure itself)

~~~
Phrodo_00
> This is one reason head tax opponents were able to so easily spin the head
> tax as a “tax on jobs,”

Also, the fact that it was a tax for every employee. If you want to encourage
companies/people to do something (like hire people), you normally start by not
adding extra taxes to that.

Not that adding tax is always a bad thing, but the mechanism of this one was
pretty poorly thought out.

~~~
bobthepanda
Payroll taxes are quite a normal thing, and it makes sense, since employees do
add some non-zero amount to the amount of services that need to be provided by
a given government even if they don't reside there.

The stupidity was that it was a flat, $500 tax, which is not a big deal if
you're paying your tech bros six figures, but becomes quite a big deal if you
have a lot of minimum-wage earning grocery baggers (who were among the
professions and corporations that would've been most impacted)

~~~
s2g
It raises the cost (excluding everything but salary, which is unrealistic) of
a full time minimum wage worker by 0.9% per year. Add in the additional costs
of an employee and that percentage drops even further.

It was also targeted at the top 3% of companies or something.

This was a paltry tax. If you want to convince me otherwise I want hard
numbers, not "oh but the low profit minimum wage employers".

~~~
bobthepanda
At the 2021 $15 min wage, it would've hiked the cost of a part time worker
working 29 hours a work by 2.2%. (29 hours is the limit before one qualifies
for employer health insurance under federal law, and IIRC neither Seattle nor
Washington have any stricter laws.) So you'd be severely dis-incentivizing
part time hiring.

.9% is not a trivial tax increase. If sales taxes went up by .9%, that would
be an undue burden on the poor. And a flat $500 head tax is more regressive
than even a flat percentage tax on sales; making it only apply to the top X
companies doesn't stop it from being regressive.

------
pravinva
Why is there no discussion on rezoning single home areas to allow multistorey
buildings? Can someone explain how the influx of tech workers has forced out
existing Seattle citizens onto the roads? Are we sure that they are not out of
towners? Why don't those who can't afford the high rents move to nearby cities
and counties instead of living on the streets? Would any parent want this for
their child? Would they not seek to rebuild somewhere else, especially if they
actually had some employable skills that allowed them to rent a 2 bed flat in
the first place? Cause and effect don't make sense here

~~~
JumpCrisscross
> _Why is there no discussion on rezoning single home areas to allow
> multistorey buildings?_

Homeowners are a reliable voting bloc. Rezoning single homes would make
housing more affordable while adding to the city's vibrancy. It would also
reduce existing home values.

~~~
patd
> It would also reduce existing home values

I'm not an american so I probably don't get the real estate market in the US.
But wouldn't rezoning actually increase the value ? Not of the home itself but
of the land on which it is built.

If your $1M home can be turned into a 10-flat building at $300K each, wouldn't
real-estate developers buy your home (even at a premium) to destroy it and
rebuild on it ?

~~~
JumpCrisscross
> _If your $1M home can be turned into a 10-flat building at $300K each,
> wouldn 't real-estate developers buy your home (even at a premium) to
> destroy it and rebuild on it ?_

Let this happen ten times and you have 100 new units on the market. Since
nobody moves to a city to live in a particular building ( _i.e._ housing
demand, locally, is relatively independent of housing supply, at least in the
short run) this will drive the apartments' prices down. That, in turn, will
exert downward pressure on the price of the single-family homes.

~~~
xapata
Or the neighborhood gets more dense, economic activity increases, and your
home value goes up. Greenwich Village ain't cheap.

------
fluxic
In the past 24 hours, Jeff Bezos added $405 million to his net worth. In the
past year, Jeff Bezos added $41 billion to his net worth. And yet somehow,
Amazon can't throw a $50 million peanut at the epidemic of homelessness
ravaging their hometown.

~~~
JumpCrisscross
> _Amazon can 't throw a $50 million peanut at the epidemic of homelessness
> ravaging their hometown_

This is an unfair framing. The tax did far more damage than impair Amazon's
bottom line. Your complaint, moreover, could be leveled against every public
service in the city. There are simply better ways to solve this problem.
Seattle's government chose pot shots over progress.

~~~
fluxic
Sure there are simply better ways, there are always better ways, and those
better ways will be likewise crushed by the muscle at Amazon who make sure the
company can extract as much value out of Seattle without having to pay its
fair share in taxes.

~~~
JumpCrisscross
> _those better ways will be likewise crushed by the muscle at Amazon_

This tax was predominantly opposed by small business owners. (I think it was
$25,000 donated by Amazon and close to $300,000 by small businesses.)

The proposed tax was a flat payroll tax. That burdens lower-wage employees and
employers much more than tech companies. There is perfect being the enemy of
good, and then there is cutting off the nose to spite the face. This was the
latter.

------
xapata
It upset most folks.

> Teresa Mosqueda, one of the two council members opposing the repeal, said
> there was no backup plan for dealing with the homeless situation.

There was no plan, period. The plan consisted of 1. Tax Amazon, 2. ..., 3. Get
re-elected. When they realized 3 didn't follow from 1, they started grasping
at straws.

~~~
jadedhacker
1\. Tax Amazon, great in its own right regardless of the reason. 2\. How do
you provide for people without money? 3\. Deserve your re-election by serving
the poor and vulnerable at the expense of mind-blowing historically
unprecedented wealth.

Great example here of managed democracy.
[https://en.wikipedia.org/wiki/Guided_democracy](https://en.wikipedia.org/wiki/Guided_democracy)

~~~
manfredo
More accurately, tax Amazon and over half a thousand other employers in the
city. And spend money on social services that don't have a particularly good
track record of eliminating the social ills they are intended to solve.
Politicians made their own judgement as to whether or not this would be
beneficial to their chances of reelection.

Immediately concluding that because a government didn't pass a new tax, the
government is a de-facto autocracy is extremely reductive.

~~~
s2g
They did pass it, after months of review.

They repealed it a day after the announcement that they were doing so.

Seattle is a company town now.

------
forapurpose
The real issue is how effective the anti-tax campaign was. Based on the NY
Times and other article posted here[0], they used the same mix of populism,
anti-government rhetoric, outrage, and propaganda that has become widely used
by the GOP. But how did they sell it in a liberal city like Seattle? What
makes it so powerful? I don't think it's the content; it's the technique.

I tend to assume it includes an effective social media campaign (complete with
targeting), and maybe that's the core of it, but does anyone know?

[0]
[https://news.ycombinator.com/item?id=17300444](https://news.ycombinator.com/item?id=17300444)

~~~
anothergoogler
I agree, it's freaky how quickly the opposition organized, and with the
similar overtones you noted. Another user linked a better source that mentions
the opposition paying a group called "Morning in America" (that's a Reagan
catchphrase, for the kids here):
[https://thecisforcrank.com/2018/06/12/todays-head-tax-
defeat...](https://thecisforcrank.com/2018/06/12/todays-head-tax-defeat-has-
lessons-for-both-sides/)

Like in SF, there's a lot of lukewarm liberalism in Seattle, and when the
rubber meets the road you can see the conservatism.

------
randyrand
The discrimination between taxing corporations vs "people" is often a dumb one
to make. Assuming low corporate profits (e.g. hardy competition), corporate
taxes just get passed directly onto employees and consumers.

For Amazon, it may be a "corporate" tax. But for other low margin companies
its just a tax on everyday people.

------
gowld
This is a great example of the extreme left-wing destroying itself. Seattle
City Council passed an income tax (that was unconstitutional, oops). This new
attempt was probably legal (or could be patched).

This head tax failed because the campaign _in favor_ was driven by insane
anti-capitalist ranting by Councilwoman Sawant and friends, who made it a "war
on Amazon" instead of a traditional, civilized, "share some of the wealth"
campaign.

------
icantdrive55
I didn't expect Internet based companies, like Amazon, to fix homelessness.

That said, I'm saddened that the town council caved in so quick.

Our biggest problem is homlessness.

All I know, is it's basically illegial to live without a perment shelter in
this once great country. Yes--once great. I'm not sure what's great about it
anymore. If I had a do over, I would have hightailed it to France, or Canada
in my twenties.

Can't sleep anywhere, including your car, without breaking some law.

There's know-where to go to the bathroom once they know you are homeless.

The industrious will find food. That's about all they might find. That food
will eventually need to leave the body though? I just don't understand not
providing bathrooms. I'm not homeless, and I have a hard time finding a
restroom in San Francisco.

This country was founded by in debt homeless individuals? All the settlers
were basically camping out?

Homelessness is our biggest problem.

It's beyond debating.

We need to open up available federal, state, and county land to camping.

We need to repeal all laws that have essentially criminalized being without a
perment shelter.

I don't want to debate.

I've had too many friends die on the streets. Their last days were filled with
overly aggressive cops ticketing them. That whole "fix the broken window
theory" is policy for most counties now.

Even to those that have a home, and a good job; do you like living in a
country with so many laws? Laws that are designed to trip you up if you are
poor, or even middle class.

I'm sick of it.

