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Activists flooded a Seattle City Council meeting Tuesday to protest a vote by the majority of councilmembers to overturn a tax on local businesses that aimed to address the city's growing housing crisis. (Photo: Ted S. Warren/AP)

'Shameless Capitulation to Amazon': Seattle Lawmakers Repeal Tax Aimed at Tackling Homelessness

"There's a bargaining power problem here, and cities are on the wrong side of it," said one tax policy expert

Jessica Corbett

The people of Seattle rose up in protest on Tuesday as the City Council caved to Amazon's "corporate bullying" and voted to repeal a recently-approved tax on local businesses that aimed to help alleviate the city's homelessness crisis.

The council voted 7-2 to reverse the tax measure, while activists at the meeting reportedly chanted, "Housing is a human right." Councilmember Kshama Sawant, who was joined by Teresa Mosqueda in voting against the repeal, called the reversal "shameless capitulation to Amazon" and a "cowardly betrayal" to working people.

"It's frustrating to see the council be so spineless when the city has so much leverage for businesses to come here despite the tax," 25-year-old Jake Lindsay, a musician and Lyft driver who supported the tax, told the Associated Press.

Supporters of the tax argued that it was fair because Amazon and its cohorts like Starbucks have fueled a mounting housing crisis that saw a record 169 people die on the streets of King County last year, as the Seattle Times explained:

Proponents of the tax say homelessness has grown because rents and home prices have soared. They say Amazon and other large companies can afford and need and to do more to help because the city's tech-industry boom has driven up those housing costs. ...The council estimated the tax would help the city build several hundred units of low-income housing, open more shelter beds, and provide sanitation at encampments.

While activists who attended the meeting voiced frustration that local officials reversed course so quickly after unanimously passing the "head tax"—which was expected to raise nearly $50 million per year for five years—just a few weeks ago, tax experts say the decision illustrates the influence gap between the people and powerful corporations like Amazon and Starbucks.

Following the vote last month, Amazon—led by the world's richest man, Jeff Bezos—halted expansion plans that could create up to 8,000 local jobs and, along with Starbucks and other local businesses, bankrolled a referendum campaign to overturn council's vote.

"There's a bargaining power problem here, and cities are on the wrong side of it," Matthew Gardner, a tax policy analyst at the Institute on Taxation and Economic Policy, told the Washington Post. "When Amazon decides to be bullies and make this kind of threat, it's really hard for officials to know how seriously to take it. Nobody on Seattle's City Council wants to be the one who chased Amazon out of town."

"The City Council in Mountain View, California, where Google is based, will vote June 26 on whether to put a similar measure before voters in November," the AP pointed out following the repeal on Tuesday. "Will Amazon's work to kill Seattle tax spook other cities?"


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