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Seattle officials repeal tax on large companies (nytimes.com)
39 points by danso 4 months ago | hide | past | web | favorite | 72 comments



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I had fully expected that the EHT would be repealed by ballot initiative come November, but didn't expect that the city council would just sort of roll over and repeal it.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


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)


It was clearly a miscalculation, but it's important to note that public opinion was in favor of the original, steeper head tax only a couple months ago [1]. I think proponents were all caught off guard by how quickly public opinion turned and by how much money businesses were willing to spend to fight what amounted to a pretty minor tax.

[1] https://www.documentcloud.org/documents/4461445-Wfre-Seattle...


Thanks, that makes a lot more sense.


> 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.


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)


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".


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.


Actually it was thought out and picked as the only progressive option they had.

Now it’s property or sales tax. Hurray.


Kshama Sawant is one of the very few elected socialist politicians in US. I don't mean socialist as in "Obama is a socialist", but an actual member of an actual Marxist socialist party.

https://en.wikipedia.org/wiki/Socialist_Alternative_(United_...


Thanks, great article, the NYT piece and its headline are such garbage. The bit about this "Morning in America" lobby is interesting.


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


> 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.


> 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 ?


> 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.


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


It only makes sense if there is already demand for those units which is what the article seem to suggest. If there are more than 100 families looking to live in the city, the price will not go down.


There is lots of discussion of that and to suggest otherwise is ridiculous.

A years long process won’t do anything to help thousands of homeless now.


Why are there thousands of homeless now? Is it a new phenomenon or a slow brewing thing. How can you conclude that recent massive hiring in Amazon has caused homelessness?


1. Amazon hires thousands of people for six figure salaries.

2. Rents increase.

3. More people become homeless.

http://q13fox.com/2017/11/06/study-says-rising-rents-tied-to...


Illogical. People who can't afford 2 bed rentals don't move to the nearby street if rents are unaffordable. They move to another town where they can afford the rents. Correlation isn't causation


30 days is not a lot of time to find a place, especially if you're having to compete in bidding wars against other people. It can be especially difficult to come up with a security deposit and first month's rent. If most people have less than 1300 in savings then they can only afford a new place that rents for 600/month. I can't think of any municipalities in the area where rents are that cheap without downsizing your family into a studio. To say nothing of the burden of packing all your things, cleaning the apartment, getting enough friends to help you move out, etc.. It's not a trivial thing to do on short notice while you're holding down a job.


You know that moving costs quite a bit of money, right? If you lose your job or have a serious medical issue without insurance, you won't be able to move to a nearby town with cheaper rents.

What do you think the underlying cause of homelessness in Seattle is?


Not if they get pushed from barely being able to afford it to not being able to afford it in the span of a month or two.


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.


> 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.


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.


> 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.


> The tax did far more damage than impair Amazon's bottom line

It really didn't though.


The US government spends 9 billion per DAY. Perhaps you could ask your elected representative if they could divert 0.1 percent of it towards this problem instead of on spending on bombing brown people in far away lands -you realize the US spends more on military than next 14 countries with larger populations combined


You exaggerate the reach of Seattle's city council if you think they are capable of ending the US' military-industrial complex. But I think that defense spending is a red herring here.


It was, but they certainly imaguned that they could influence a mega corporation who is not responsible for the problem


Everyone says Amazon, Amazon, Amazon but the head tax also would have affected every business doing $20mm/year like grocery, drug stores and even gasp Starbucks! Places where employees are definitely not making six figures on average.

Plus government spending here like many other cities is not well managed. See bike lanes. See the fact that they fired Wells Fargo and then re-hired Wells Fargo because no one else would take their business.

Homelessness is a real problem, but there needs to be more dialogue and better planning before rushing in and taxing growth.

Probably a better idea to look at how the tax system is setup here to favor the wealthy versus low income.


0.9% increase on a minimum wage salary.

Just salary, not even the full cost of having an employee on staff.

I just refuse to believe this is a massive burden on these businesses without numbers.

People said the same stuff about the minimum wage increase.

> Probably a better idea to look at how the tax system is setup here to favor the wealthy versus low income.

They did and that's why they decided on this tax instead of yet more horribly regressive sales taxes.

Washington has a god awful tax system. This is one of the options they had to get the money without squeezing the poor and middle class even more.


Amazon is not the government. They don't have the expertise or even authority to tackle civic issues.

I don't want them tackling civic issues because Amazon is a company. It is a profit algorithm in a capitalist system. Humans inside can steer it to Do Nice Things here and there but ultimately its lives because Profit.

The government's ONLY job is to Do Nice Things (maintain nice status of life). Therefore, it is the government's failure to leverage its own powers to solve the homeless issue. Because it's a representative plutocratic democracy, the people are partially to blame as well, although class disparity is a major obstacle.


Your argument:

1. Amazon is not the government.

2. Amazon has no obligation to solve civic issues.

3. It is the government's job to solve civic issues.

(The government tries to solve civic issues; Amazon uses its undue influence in Seattle to undermine the process.)

4. Ergo, it's all the government's fault.


1. Homelessness wasn't caused by Amazon. 2.The govt has a restrictive zoning policy not caused by Amazon but is the definitive cause of the housing shortage. 3.You give an easy pass to those whose exclusive job is to solve these problems by blaming it on those whose job it is not. 4.Govt takes the easy way out and comes up with the default hammer to every nail-more taxes and sensible people oppose it and somehow it's the sensible person's problem? Do you even logic,bro?


Sure, Jeff Bezos isn't walking around the streets of Seattle stealing people's chequebooks and ratting to their bosses so they can't make rent. But he and Amazon are exacerbating INSANE wealth inequality in Seattle. Amazon is the seat of economic power in the city, and its employees are the ones bidding up property prices. It's great that Bezos is giving high-paying jobs to thousands of people, but those same people (following the "bro logic" you espouse) are bidding up property prices, and then lobbying for NIMBY policies that reduce housing supply—which DEFINITELY drive up rents and force people out of their homes and onto the streets.

If you're an affluent techie in Seattle it's easy to say "not my problem bro", work your great job, buy your expensive house, lobby your local councilman to curb new developments and head taxes, watch your property value rise and your chequing account blossom. But there are swathes of other people for whom affluent tech jobs aren't desirable or possible, and there's no need for those people to be priced out of Seattle. Building homes isn't hard.


Is the solution to stagnate the economy?

Is the solution to be companies to throw their hands up in the air and say "municipal governments can't solve gentrification, so let's not become big"?

Do you think the swaths of tech workers moving to be close to work enjoy their rent prices skyrocketing? Do you think they enjoy rising homeless rates?

Nobody wants gentrification. If you can find me a tech worker kicking sand in a homeless person's face I'll lambast him with you. I want to solve gentrification as well but the solution isn't to choke an economy to prevent companies from moving in. That just pushes the problem to some other city. We need the government to step in and do its job, and that means we have to participate and steer the government.


Nonsense.NIMBYs aren't the new young renters. They are OLD Seattleites.


Attacking Amazon for operating within its constraints to maximize profit seems silly to me. It is programmed to do nothing else.

I say instead, attack the concept of capitalism (infeasible) or fight the fight in the battleground of the political sphere - vote and openly support candidates that want money out of government.

Yea, finding one is hard, I agree.


I agree that it's insane to expect Amazon to behave differently than what's expected of a contemporary American corporation™ (aka: pure profit extraction, no consideration for local social conditions or the greater social contract.)

But rather than accepting Amazon's mundane corporate naughtiness, we should be vigilant and outspoken about it. The corporate norms we have now in North America are not etched in stone; we can inveigh against shitty behaviour while also doing what you suggest: electing better politicians and pursuing fairer tax policy.


Putting a tax on Amazon is, in fact, part of the fight against capitalism.


I agree, which is why I hope Seattle people don't give up the fight here.


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.


This is pure propaganda. There are SO many plans that many different local organizations are offering.

Powerful companies who can communicate one single message backed by advertising/public appearances/media can make it appear that are no other "real" options. This is a deliberate political strategy.

The reality is that there are an enormous amount of "real" options. But political will is hard to muster when there are many competing ideas as to what should be done.

Without a doubt gentrification, homelessness, and housing/rental prices can all be addressed from many directions. I have my own ideas about what can be done by the city, state, and country. To say "there was no plan, period" is literal propaganda that exists to support the status quo.


You're right, that was disingenuous. I should have said that the council doesn't seem to be changing it's plans despite how ineffective they have been. Maybe it's an implementation problem instead of a planning problem.

I'm extremely frustrated by the seeming tolerance for literal shit in the streets. At least put some porta-potties out for public health. If it only costs $300k for laundry, showers, toilets, and sinks (according to the plan linked in the other comment) why hasn't it been done yet?


> I should have said that the council doesn't seem to be changing it's plans despite how ineffective they have been.

That's funny xapata. The Seattle City Council has been implementing recommendations from the Poppe report [0]. The Poppe report lays out a homelessness action plan recommendations for Seattle. The head tax was to fund some of those recommendations from the Poppe report.

The Seattle Times recently covered the homelessness count [1]. It explicitly mentioned that actions Seattle has taken to combat homelessness were having a positive effect.

> Compared to more rapid rises in homeless counts over the past five years, a slower 4 percent increase represents progress, said Kyra Zylstra, interim director of All Home, the county’s homelessness coordinating agency, which organizes the yearly count.

> “It’s not the kind of progress we all want to see,” Zylstra said. “But our performance data shows that the resources that we are investing in are housing people faster.”

The whole point of the head tax was to continue funding recommendations from the Poppe report. They're the same recommendations that are demonstrated to be working.

[0] https://www.seattle.gov/Documents/Departments/pathwayshome/B...

[1] https://www.seattletimes.com/seattle-news/homeless/new-homel...


I've participated in one-night homeless counts before, such as the once cited for that news article. I don't find the evidence of improvement compelling.

If this Poppe report was the purpose of the tax, why was all the messaging "Tax Amazon!" instead of, "We need money for urgent projects!"?

Despite being 70 pages, that report was quite vague. Mostly platitudes like, "Prioritize the most vulnerable!" I hope the plans were more detailed elsewhere. And how much did that report cost?


> There was no plan, period.

Oh really?

http://www.capitolhillseattle.com/2018/05/up-against-a-wall-...

Not a perfect plan, maybe not even a particularly good one, but there absolutely were plans and budgets for how the money could have been used even before it was originally approved.


Looks like a good fit for the regular budget to spend some of that property tax money Amazon and employees send it, not a good fit for blackmailing Amazon into a head tax.


> blackmailing Amazon into a head tax

That doesn't even make sense, how is blackmail involved?

You may not agree with a tax, but that's what voting is for. If it passes, you pay it or you remove yourself from the jurisdiction...that's not blackmail, it's how taxes work.


"or you remove yourself from the jurisdiction"

Hopefully that move is to somewhere close by; else, that kind of black-and-white logic would directly result in 45,000 Amazon employees facing either relocation or unemployment. Even then, the added time and monetary costs of added commutes can put folks in a similar "between-rock-and-hard-place" scenario.

In general, telling someone "if you don't like it, then move somewhere else" betrays a complete ignorance of the economic and psychological burden of doing so (burdens which not everyone can afford). Amazon itself can afford to move with relative ease, of course, but that doesn't hold true for the vast majority of its workers.


Amazon can't afford to fire or force relocation on 45k employees. That would end up costing them millions.


Then that's one more reason why the "if you don't like it, take a hike" argument is absurd.


What blackmail?

If anyone was engaging in extortion it was Amazon.


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


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.


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.


deserve your reelection by nominally “serving the poor” while wasting loads of tax dollars and throwing good money after bad to retain a city council seat, you mean


The root of this problem stems from the American ideal of the primary home as an ever-appreciating investment. If you instituted a land value tax, raised property taxes overall, invested heavily in (reliable, clean, safe) public transportation to expand the commute radius, removed local authority over development, cut development approval timelines and costs, and slashed any zoning requirements that aren't directly related to individual safety, you'd nuke future appreciation and start to become the more livable, egalitarian city that many seem to want.


Since wealth inequality is incredibly big and continuously increasing, big land/home taxes will lead to shifting home/land ownership to the 0.1% and cause 99.9% to rent it. Prices will increase sky high partially because owners can raise them (semi-monopoly of ultra rich owners) and partially to recoup ownership taxes. The whole thing will start failing even faster than now.


> big land/home taxes will lead to shifting home/land ownership to the 0.1%

Piketty's work [1] found real estate (and its favorable tax treatment) to be the largest driver of wealth inequality in America. Land taxes would be progressive. (Particularly if the first X dollars of one's primary residence were excluded.)

[1] https://en.wikipedia.org/wiki/Thomas_Piketty


There are plenty of practical policy solutions you can employ to shift more market power to lower and middle income folks; e.g. proposition 13 in California but limited to one residential property per person.


With a slightly different split, this is already true.


they could have collected fresh underpants for the homeless for step #2, it might have worked.


Huh, I gues the documents they put on were just gibberish.

I’m looking forward to watching this same short of bootlicking and idiocy when Jeff comes around to extort tax breaks with the threat of HQ2.


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


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...

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


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.


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.


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.




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