Stuff the Capitalist (aka KD) Likes: Epic Musical Intros
Join Us for a New Hangout Series - HR Mind Games (Episode #1 - Hiring Sales Pros)

Amazon Flexes Muscles, Eliminates Occupational Tax in Seattle in One Month....

Here's what power looks like in an employer, my friends...

Less than a month after unanimously passing a contentious tax on big business, Seattle’s city council has voted to repeal the so-called “head tax.” Against the fervent protestations of residents and local coalitions—which were extended to a full hour of testimony—council members voted 7-2 to pulled the plug on what would have been a vital source of support for city’s growing homeless population. 

Let me break that down for you: The city council unanimously passed the tax, then one month later repealed it.  What happened?  The city's biggest employer, Amazon, said "what up", flexed it's muscles and reversed the whole thing in a month. Drevil

Before breaking down what Amazon did and being awestruck by the raw power, let's learn more about the "head tax" that was proposed from Gizmodo:

In the form it was passed last month, the “head tax” would shave off $275 per full-time employee at companies generating over $20 million in revenue, totaling an estimated $47 million per year for five years. Those funds would then be earmarked for homeless services and affordable housing. Seattle declared its homelessness a state of emergency in 2015, with soaring costs of living and congestion of public services considered the foremost catalysts for the rising homeless rate.

The repeal comes a day after the No Tax on Jobs campaign—a coalition which large businesses which would be affected by the “head tax,” like Amazon and Starbucks, pledged significant financial support to—announced it had gotten over 45,000 signatures, more than enough to generate a referendum to overturn the tax in November. Speakers on behalf of No Tax on Jobs at the City Council chambers repeatedly described the coalition as “grassroots,” however the Public Disclosure Commission of Washington reveals it gave over $246,000 to a firm called Morning in America for “signature gathering and verification” and an additional $20,000 to Cre8tive Empowerment for “campaign/volunteer/social media management.”

Mayor Jenny Durkan described the quick legislative retreat as a means to avoid “a prolonged, expensive political fight over the next five months that will do nothing to tackle our urgent housing and homelessness crisis.” Critics saw the repeal as a backroom deal to appease Amazon.
 
Put another way, the city council of Seattle forgot who is really in charge in Seattle.  Cliff notes - it's Amazon!

Among other things, Amazon reacted to the head tax by halting construction of office towers in downtown Seattle (click link to read more), which caused some freak outs about Amazon potentially leaving Seattle, a prospect that is surely strengthened by the fact that the giant online retailer has 20 cities on a list of finalists for a second headquarters.

"Hell, we'll just pick two places instead of one" is the clear message.

My city, the ATL, is in the running for the second HQ, and the Seattle head tax teaches us one thing pretty clearly - Be careful what you ask for when Amazon comes to town.

Comments

AC

Another misguided city doing it's best to kill the goose that laid the golden egg. We see it time and time again - Detroit being the poster child for how to run businesses off. In fact, good case study would be Detroit - why would all those auto manufacturers move their plants down here to the South? Mercedes, Kia, Hyundai, Volkswagen, Nissan, and BMW all have plants within a couple hundred miles of Atlanta. Detroit still has a homeless problem and it is a city where you can literally buy a house for $1. Decisions like this over time take their toll. Kudos to Amazon.
They were just trying to save the city council from itself.

Jaime Gonzalez

Good for Amazon! Socialism does not work and voting with your feet is one way to oppose it.

Jonathan Merrill

Long time reader, very few times needing to comment. In this case, let me add my voice to the two other responses here. My perception is the article was a cautionary tale instead of a victory for Americans. Sadly, governments continue to insist that solving problems through taxation is the only way. Although, the overwhelming historic evidence is this philosophy has never worked in any form of government since the birth of mandkind. Milton Friedman, economist, has written about socialistic natures and it's destruction of economies. The problem is not financial, it's emotional.

Homelessness and poverty are a problem across the US. To pull people out, incentives need to exist for people to grow and want to prosper. And, businesses need the economic climate to put hire hungry, humble, and smart people.

Amazon knows this. And the multitude of other technology companies in Seattle that elect to do business there. Investing in people for future ouctomes is a sustainable force. Anything else is emotionally driven dogma.

The comments to this entry are closed.