Seattle Scales Back Tax in Face of Amazon’s Revolt, but Tensions Linger

click to enlarge Jeff Bezos, the founder and chief executive of Amazon, in Seattle. - KYLE JOHNSON/THE NEW YORK TIMES
Kyle Johnson/The New York Times
Jeff Bezos, the founder and chief executive of Amazon, in Seattle.

© 2018 New York Times News Service

SEATTLE — After intense lobbying by local businesses and a bold threat by Amazon to curtail development in its hometown, the Seattle City Council on Monday approved a smaller and more limited tax on big companies than originally envisioned.

The new tax — dubbed the “Amazon Tax” by locals — will fund affordable housing and homeless services in a city whose economic boom, driven in no small part by Amazon, has priced many residents out of the area and forced some onto the streets.

Amazon, which halted two major expansion projects in Seattle in protest over the larger tax increase, said it was disappointed even with the smaller tax package, although the company said it would restart the planning process for one of its new buildings. It was still exploring the possibility of subleasing a second building that a developer is currently building.

The council had originally considered an annual “head” tax of $500 per full-time employee for Amazon and other large employers, but the amended measure that passed reduced that figure to $275. Instead of the $75 million a year the tax was originally expected to raise, it will bring in less than $50 million. The council also included a sunset provision that would require the tax to be reauthorized in five years.

The compromise failed to defuse tensions between Amazon and the city it has called home for the last 24 years.

The company’s tactics in Seattle has also garnered concern among other cities bidding to bring Amazon’s second headquarters to town.

Twenty finalist locations across North America have been aggressively wooing Amazon to win up to 50,000 high-paying jobs that its second headquarters would bring. In some of those places, there is opposition growing over the tax incentives that some city and state governments have agreed to give Amazon in return for being selected. And Amazon’s hardball politics in Seattle has further soured some local leaders.

“I absolutely find it unacceptable to see politically threatening behavior as is occurring there,” said Robin Kniech, a member of the City Council in Denver, one of the finalists for Amazon’s second headquarters.

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