Amazon makes vague threat after Seattle passes new "head tax"

Seattle mayor's 'Amazon tax' compromise voted down by City Council

"The city does not have a revenue problem - it has a spending efficiency problem", Drew Herdener, Amazon vice president, said in a statement.

At an impassioned meeting Monday afternoon, the Council approved an amendment establishing the tax of $275 per employee per year, from $500 previously, on companies with more than $20 million in annual revenue in the city.

Councilmember Lorena Gonzalez shot back that she was "equally disappointed" in Amazon's reaction to the council's vote and said she thinks "their tone in this message that is clearly hostile toward the city council is not what I expect from a business who continues to tell us that they want to be a partner on these issues".

Republican State Senator Mark Schoesler says he will be taking action against the tax, introducing legislation that says it is an unauthorized tax unless approved by legislature, which "reinforces current law".

The council has been debating the so-called head tax for months, and had been considering a higher tax of $500 per employee that would have raised $75 million a year, largely to build about 1,000 new affordable housing units.

Hederner, the Amazon vice president, said sharp increases in the city of Seattle's revenues have outpaced the population growth of the city during the same period.

The head tax has ignited something of an existential debate for Seattle over its monumental growth. Representatives of businesses warned that the tax would drive employers out of town, while others speakers questioned whether Seattle's city government could be trusted to spend the additional tax revenue wisely. The mayor instead proposed a tax of $250 per employee.

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About 3 percent of Seattle businesses will be affected and the tax will raise about $47 million per year, according to the council. Neither side supported the compromise, and most speakers blamed city leaders for an escalating homelessness crisis that has seen city sidewalks, parks and roadsides packed with tents and shacks.

However, with Mayor Jenny Durkan threatening to veto the tax because she was concerned about its impact on employment, the measure had to be watered down to pass.

Amazon said it is still evaluating whether to sub-lease space in a second future office tower in Seattle, a project called Rainier Square, meaning it may move some planned jobs elsewhere and thus avoid further raising its tax liability. The Seattle region had the third-highest number of homeless people in the United States and saw 169 homeless deaths past year.

The Associated Press reports that the Seattle region had the third-highest number of homeless people in the US, despite the city spending $68 million on combating homelessness past year.

Even though the company made a decision to resume one of its building projects, Drew Herdener, an Amazon vice president, said in a statement, "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".

Before the vote, she said the city "has an obligation to take care of the people who are surviving and suffering on our city streets".

Amazon says it has contributed a cumulative total of $40 million to Seattle's affordable housing fund through fees associated with its real estate development in the city.

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