Amazon Stopped Construction Because It’d Pay 0.26% of Its Profits in Taxes

May 4, 2018 | Matthew Caruchet

Earlier this year, Amazon was secretly lobbying to stop equal pay for women, even though other tech companies like Microsoft supported it.

But now Amazon is openly bullying the city, halting construction on buildings because the behemoth would have to pay 0.26 percent of its profits in local taxes to help solve the homelessness crisis in our city. Amazon says it would be an undue burden – acting like a mom-and-pop store that is struggling to compete against Amazon. We live in a political climate of fear, where everything seems like it could come crumbling down, and Amazon likes to portray itself as the one thing keeping Seattle from becoming Detroit.

Sadly, people are buying it, as evidenced by the pitchforks brought to a council meeting in Ballard this week:

Perhaps that’s why so many of them seemed so ill-acquainted with basic facts. When Katie Wilson, head of the Transit Riders Union and a tax panel member, observed that “the shortage of affordable housing is a major driver of homelessness,” people in the crowd shouted “NOT TRUE!” When a homeless woman stood up to speak, a man behind her yelled, “Stand up and speak, coward!” A man claimed that when he calls 911 to report a crime, the “police” on the other end tell him their hands are tied and they can’t respond. A woman said the city council has prevented police from investigating  rapes by homeless people. A speaker who supported the tax pointed out that, contrary to what several speakers before him had claimed, the proposal involved a tax on businesses, not individuals. “LIES!” several people screamed. A speaker said he owned a home in Ballard and supported the tax. “SHILL!” “PLANT!” “PHONY!” the crowd roared.

But let’s be clear – Seattle taxpayers are getting a raw deal from Amazon. Seattle officials have approved $480.5 million in improvements for South Lake Union over about a decade. That’s taxpayer money. How much would Amazon pay for the proposed employee hours tax? $20 million per year.

Follow the money:

Amazon’s growth directly correlates with higher housing prices. This is why members of the Seattle City Council are pursuing this tax:

While Amazon didn’t single-handedly cause this problem, they have contributed to the growing income inequality, displacement and housing affordability issues facing our City. That is precisely why — in their visits with 20 other cities — Amazon has sought to speak with elected officials about plans to proactively address those consequences. It seems only fair that as so many struggle to make their way through a tax system that’s rigged in favor of large corporations, that we ask those same corporations to financially contribute to the public health and housing solutions designed to address those consequences.


The people of Seattle paid to build Amazon a nice home and the city is asking Amazon to return the favor for the less fortunate. Instead, Jeff Bezos is giving us the finger. He’d rather build a space rocket and leave us all behind.

Posted in An Inclusive Economy, Ending Corporate Tax Breaks, Funding Public Services

Comments

  1. JJ says:

    This article is bullshit. You’re making this all about Amazon, when it’s really about the pathetic, failed economic policies of the City Council. We’re already throwing $71 million at the wall, trying to “fix” the homeless problem. Clearly, that’s not working. So the answer is what, more money? Sure…while the City hands out the equivalent of blank checks to developers who are bulldozing massive amounts of existing affordable housing. HALA is just one more in a series of giveaways, while developer impact fees are nowhere to be seen.

    Bezos may be a tightwad (and he certainly is), but making Amazon the scapegoat ignores the root cause of the problem: consistently poor public policy, going back at least four administrations.

    • Janis says:

      @JJ: This piece is all about Amazon because it is in response to their halting construction in protest of the proposed tax, claiming such a thing would be an “undue burden”. Looking at these numbers, it’s hard to believe that’s true.
      You can make your case about why you think money isn’t necessary to fix the homeless problem and what you think the city council has done wrong (because they absolutely HAVE made bad calls in the past) but I personally think they have the right idea on this one.

  2. Steven says:

    JJ, you realize Amazon is one of those developers ? Also your premise on blank checks is stupid. I just dropped of a check to SDOT for $9k just in street use fees for this month in front of a project on 1st ave.

  3. Quit Lying says:

    Nevermind that the EHT converts into a payroll tax in three years — that is, a percentage of all payroll. The $500 a year number is a lie. It’s only for two years. Then they start paying a percent of each employee’s paycheck. This tax goes from “$20 million a year” to many hundreds of millions a year, just for Amazon, in two short years. No one mentions that when they advocate for it.

    • notarussianot says:

      “many hundreds of millions”… That’s a very specific number. And you insist Amazon alone will be assessed this. So on their 1.9 Billion PROFIT (you know all that money that isn’t going to expenses like payroll or expansion costs) you have the exact percentage that the 2020 payroll tax will run?
      What are your sources? http://www.statsoutofmyass.com ?

    • Dick Burkhart says:

      You are dead wrong. The reason for the two year wait is to find out what the rate should be to yield the same $75 million.

      But, as the recent McKinsey study makes clear, we’d need closer to $200 million a year in Seattle, assuming that about half the county need is inside our city.

  4. Dick Burkhart says:

    Do you know how much the new Mercy Housing building at Othello cost? About $30 million for 108 affordable units (construction fully subsidized, operational costs just covered by rents).

    How much would Amazon pay in one year from the city council proposed head tax? $20 million. That’s right, not even enough to build one typcial building of affordable housing. We need dozens of such buildings each year.

    • Economic Opportunity Institute says:

      The Mercy Housing building in Othello did cost $35 million, but it’s mixed-use. It also includes lots of office space and parking, which most affordable housing complexes don’t have. Plus, most of the funding didn’t come from the city. It came from JP Morgan Chase, Wells Fargo Bank, The Washington State Housing Finance Commission, Low Income Housing Tax Credits and The Rainier Valley Community Development Fund as well as private philanthropic donations. https://seattle.curbed.com/2016/2/29/11134096/mercy-othello-plaza-affordable-housing-seattle

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