So Much for Compromise: Amazon-Backed Business Coalition Invests Big to Kill Head Tax

Remember when, just a couple of weeks ago, Amazon held the whole city hostage by halting plans to build one 17-story tower and threatening to sublease space it had planned to rent in another? The issue was the size of the proposed head tax to fund housing and services for some of the thousands of people living homeless in Seattle: A majority of the city council wanted the tax to be $500 per employee on every business with gross revenues of more than $20 million a year (Amazon plus nearly 600 other companies); Amazon said it couldn’t go a cent higher than $250. Over a weekend of frenzied negotiations, in which Mayor Jenny Durkan reportedly served as the conduit between Amazon and the city council, that five-member majority evaporated, and on Monday, the council voted unanimously to approve the $275 tax that Amazon supposedly wanted. Amazon resumed construction, everybody breathed a sigh of relief, and the council prepared for the next battle—a debate over how to spend the money, about $47 million a year, that the hard-won head tax would generate.

Fast forward a couple of weeks, and it looks like Durkan—and the council—were in over their heads. Amazon may still be building in Seattle, but they have one foot out the door, and last week, they made their first pledge—$25,000—to the “No Tax On Jobs” referendum campaign. The campaign enjoys the backing of not just other corporate behemoths (Kroger, Starbucks, Centurylink) but a who’s who of local developers, hotel industry players, and maritime and industrial businesses. So far, the anti-tax campaign has brought in more than $352,000 in financial pledges—and that doesn’t count the free labor the companies’ anti-tax messaging has received from regular citizens who are mad at the city’s response to homelessness, who are cheerfully gathering signatures at farmers’ markets and community meetings around the city. (The dubious connection between a tax on the largest corporations and ordinary taxpayers is that if companies like Amazon are required to pay additional taxes, they will leave the city, taking all those high-paying jobs with them. The irony that many of the people who are freaked out by this scenario are the same people who stridently oppose the increased traffic and population density that all those “jobs” produce appears to be lost on many head tax proponents.)

It’s hardly surprising that Amazon is looking out for its bottom line. What is a bit surprising is that Durkan seems to have believed that her half-measure “compromise,” which was focused on Amazon and not the rest of Seattle’s politically active business community, would quell a rebellion. When former mayor Ed Murray (who resigned in disgrace after allegations that he sexually abused minors decades ago) wanted to make sure that the $15 minimum wage proposal would stick, he created an unprecedented business- and labor-led advisory committee that included representatives from the Seattle Hospitality Association, the Chamber of Commerce, and local businesses like Ivar’s and Nucor Steel along with labor and social-justice groups. Over five months, that group hammered out a deal that phased the $15 minimum wage in slowly, over seven years, with extra concessions for the small businesses that would be most impacted by the increase. By next year, workers at all but the smallest businesses in Seattle will be making a minimum of $15 an hour.

Four years ago, Seattle Hospitality Group founder Howard Wright stood beside the mayor for a photo op as he signed the legislation making $15 the law of the land. This week, he donated $25,000 to the effort to kill the head tax.

Maybe compromise is harder than it looks.