$300 Million 'Amazon Tax' Proposed By Seattle's Kshama Sawant

SEATTLE, WA — Seattle City Councilmember Kshama Sawant has unveiled a plan to tax hundreds of the city's largest employers to help fund a sweeping expansion of affordable housing construction projects and upgrades. During a press conference Wednesday morning, Sawant said the tax would only apply to the top 3 percent of Seattle companies, as measured by the size of their payroll.

Sawant estimated 825 companies would be subject to a 1.7 percent excise tax on payroll, while 97 percent of Seattle companies would owe nothing. Other exemptions include non-profit organizations, public employers and grocery stores.

In 2018, a hotly contested effort to levy a smaller payroll tax on big businesses sparked intense backlash from Amazon and other business groups. City councilmembers voted unanimously to approve the proposal, then repealed the tax by a 7-2 vote less than a month later.

Amazon later poured more than $1.5 million into the 2019 Seattle election, as part of an unsuccessful effort to replace Sawant and other incumbents with more pro-business candidates.

Under the new plan, Sawant expects the city will be able to raise $300 million annually. With a combined $90 billion in estimated yearly revenue between the city's largest companies, Sawant said the tax effectively amounts to 0.3 percent of their income.

“I think any rational person will agree that it’s more than reasonable for the biggest, richest companies in our city to pay zero-point-three percent of their revenue to do their part to address our city’s crushing housing crisis,” Sawant said.

Sawant cited a 2018 report by the Seattle Times that found average rents had increased 69 percent since 2010, more than twice the national average.

"Today, 46 percent of Seattle renters are officially rent-burdened, and one-quarter of all homeowners — especially elders living on fixed incomes and struggling with rising property taxes — are also at risk of being pushed out," Sawant said. "Companies here have reaped billions because Washington state has the most regressive tax system in the nation."

About 75 percent of the money raised by the tax would be earmarked for housing and social services, and new construction would have to meet energy efficiency standards in line with the "Green New Deal." Sawant's target is to build 8,000 affordable, publicly-owned homes within 10 years.

The remaining 25 percent of the money would be used to convert existing homes from natural gas to electricity, with a goal to convert 47,000 homes over a decade.

Sawant's proposal follows a more modest measure introduced in Olympia last month, which would authorize King County to raise an estimated $121 million in annual payroll taxes. Several prominent critics, including Sawant, have argued the state legislative effort does not go far enough and worry it could be amended to forbid the county from enacting other taxes on major corporations.

"Our entire community will fight this anti-democratic attempt to deny the people of Seattle the ability to raise the funds needed to solve the housing crisis," Sawant said.

Sawant's announcement Wednesday comes two days after charges were filed by the Seattle Ethics and Elections Commission, alleging the councilmember broke two laws by using city resources to advocate for the "Tax Amazon" ballot initiative. According to the Seattle Times, Sawant said it was a misunderstanding and said her office was in full compliance with the law moving forward.

The Times reports Sawant will continue parallel efforts for a ballot measure on the tax, in an attempt to assure its passage in some form.