Seattle

Seattle's 'Autonomous Zone' Is Dead, But Its Amazon Tax Has Come Roaring Back to Life

The city has passed a new payroll tax on large employers that is expected to raise over $200 million a year.

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Seattle is back in the business of taxing big business two years after it passed, then repealed, its controversial "Amazon tax."

On Monday, the Seattle City Council voted 7-2 to approve the "JumpStart Seattle" tax, which taxes the wages paid by businesses to employees making $150,000 or more a year. The tax applies to companies with at least $7 million in annual payroll and is projected to raise $214 million annually.

"We are in the midst of a health and economic crisis that even a strong economy like Seattle may not be able to recover from quickly," said Councilmember Teresa Mosqueda, who sponsored the legislation, in a press release following the vote. "JumpStart Seattle will do just that—jump-start our recovery with a relief plan that centers workers, small businesses, and our most vulnerable community members."

Provided Mayor Jenny Durkan signs the tax into law, it will go into effect next year.

In addition to the tax, the city council also passed a spending plan Monday which would allocate next year's JumpStart revenue to replenishing any money the city borrows this year from its emergency fund. Starting in 2022, revenue from the tax will go to affordable housing, small business aid, and economic development programs.

The JumpStart tax is the final chapter in the long saga of the Seattle city government's attempt to tax large employers in the city.

Back in 2018, socialist City Councilmember Kshama Sawant proposed a $500-per-employee head tax, which she coined the "Amazon Tax," on companies with revenues of over $20 million. That tax was supposed to raise $75 million a year.

The proposal attracted united opposition from Seattle's business community and a number of labor groups, who argued that it would drive jobs and business out of the city. Seattle-headquartered Amazon announced a halt to one of its downtown construction projects prior to a vote on the tax.

The city council later passed a compromise $275-per-employee head tax, which they then embarrassingly repealed a month later after business interests launched a campaign to put that tax to city voters through a ballot initiative.

The experience naturally enraged the city's progressives, who vowed to fight on. Last year's city elections saw Sawant win a narrow victory and a number of other progressive city council candidates defeat more moderate, business-backed opponents.

In February 2020, Sawant said she'd be bringing back her Amazon Tax. In April, she, along with Councilmember Tammy Morales, introduced a proposal for a 1.3 percent tax on wages paid by companies with at least $7 million in annual payroll expenses, estimated to rake in $500 million a year.

The Sawant/Morales tax was a tough sell politically because it was much larger than the head tax that had already been repealed and because it would tax the wages of low-income workers.

Mosqueda's JumpStart tax has proved more politically palatable. In addition to exempting lower-income workers, it also introduces a tier of tax rates that increases for higher wage earners at larger firms. (The Seattle Times has a useful graph breaking down the different tax rates.)

The progressivity of the JumpStart tax helped win it support, according to University of Washington economist Jacob Vigdor, who told the Seattle Times, "The way this tax has been structured distributes the burden of the tax to the businesses with a greater capacity to pay, which is the economically sensible thing to do." CrossCut reports that Mosqueda did extensive outreach to the business community and labor groups when crafting her tax proposal.

Seattle's major business associations have still come out against the tax, arguing it will cost the city jobs. "Taxing jobs is bad public policy, and it is even more concerning as Seattle faces double-digit unemployment," said the Seattle Downtown Association in a statement to the Times, saying that the tax should be repealed.

The two city councilmembers, Alex Pedersen  and Debora Juarez, who voted no on the JumpStart tax suggested it should be put to voters through a referendum.

Following the passage of the JumpStart tax, Sawant issued a grave warning to "Jeff Bezos and his class," saying any repeal effort would result in the proletariat finally casting off their chains.

"If you attempt to overturn the Amazon Tax, working people will go all out in the thousands to defeat you," said Sawant. "We cannot and will not stop until we overthrow [capitalism] and replace it with a world based instead on solidarity, genuine democracy, and equality. A socialist world."

The threat of socialist revolution notwithstanding, there's plenty of reasons to oppose Seattle's new payroll tax. The possibility that companies will move or shift workers outside the city is very real, especially since the coronavirus pandemic has diminished the benefits of being located in a big city.

Imposing yet another tax on companies who're already struggling to survive the pandemic will make Seattle's economic recovery harder. Repealing city and county level restrictions on the development of new housing, on the other hand, is a sensible and cheap way to encourage the construction of more affordable homes.

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  2. Did all the large businesses skipping town within the next couple years factor into their revenue projections?

    With the “new normal” being everyone teleworking, why would a tech company set up in such a tax-disadvantaged environment? HQ in Bumblefuck, Kansas and hire from wherever.

    1. I grew up in Bumblefuck, Kansas and I can tell you that the corn has more culture than the people. I want to experience urban culture with anarchist communes, derelict homeless, and armed Black Panther marches.

      1. I think Seattle has a surplus of all those things anyways, maybe they can ship some to Bumblefuck? They do want equality after all.

        How is Bumblefuck at this time of year? Humid?

        1. I moved to Austin,TX from Portland, OR, so the politics in the city don’t phase me much, but Jesus, the humidity! Portland and Austin have similar humidity, but the average high temp in Portland is 17 degrees cooler. My glasses fog up whenever I go outside before noon.

          Except for the politics, the Pacific Northwest is paradise.

          1. Well, except for the lack of air conditioning, hell ain’t so bad either – – – – – – –

    2. Bumblefuck, Kansas rocks.

      1. Seconded

    3. I don’t understand why he hasn’t long since moved the paperwork HQ to Delaware with a nominal HQ there and then moved actual operational control to some site 10 miles outside Seattle where the city can’t touch them for another 10 years.

      Then his senior staff get the ‘benefits’ of that ‘vibrant’ and ‘diverse’ Seattle ‘culture’ and that suicidal Pacific Northwest climate without having to deal with the city.

      I bet he could now make a deal with the state/county to set aside a district for Amazon to HQ in that would be written into law as not being allowed to be incorporated – ala the Vegas Strip.

      1. Does the state already have a way to prevent annexation of a large commercial development? Universal City has remained an unincorporated area free from Los Angeles for over 100 years. Another option would be to go the City of Industry route and incorporate an area with few residents (Industry has a workday population greater than 60,000 but only about 200 residents).

        1. That will come in in the state’s rules for incorporation.

          Arizona requires there to be at least 1500 residents in any area to be incorporated and rules out incorporation of areas that are ‘predominately rural’ (to prevent large swathes of otherwise empty land from being grabbed early) or for a municipality to surround a parcel on at least three sides.

          On the latter, its possible for a parcel to fall into the cracks if its squeezed between two different municipalities.

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    5. Good luck getting talented people who could work for a competitor in a vibrant city to move to Bumblefuck. I would be surprised if other popular cities with a hight quality of life don’t follow suit.

    6. they did not learn a thing when the imposed a tiny tax on the sale of any firearm within the city, and each round of ammunition. They had projected a nice fat bucket of cash each year to squander on the “disadvantaged” and other ‘”worthies”. The largest gun store in Seattle, privately owned and been there half a century or so, went to a city meeting and announced in VERY plain language even that Sawant creature could comrehehd: If you pas that tax I WILL move my business outside the city of Seattle. They did, and so did he. His business volume was just about as much as every other gun seller in the city combined. Many of the other department stores that also sold firearms (WalMart, Fred Meyer, Big 5) simly closed down their GUN sales departments. ). Insteadof GAINING several millions in new tax revenue each yea,r they took a hit on all the other taxes they were alreaady getting from those retail sales. Went from plus 2 to 3 million to maybe $125,000, but LOST a couple million they had been getting.

      Dummies want to prove Einstein correct once more.

      1. But they got rid of gun stores, so that might be what they wanted.

    7. People at higher levels of government have never read the story about “The Goose That Laid The Golden Eggs” . . . of, if they read it, they clearly didn’t understand what they read.
      When enough big businesses leave a city (and small businesses are closely tied to big businesses as insurers, suppliers, maintenance, etc.) then the city revenues can decrease to such a degree that city government is no longer needed or desired.

  3. Why should I support low taxes on multinational corporations and billionaires that hate middle class white people, like myself? I know socialism is a failure but why defend a corporation that would fire me in less than an hour if a Twitter mob came for me because I opposed defunding the police, rejected the idea of “gay marriage”, or criticized abortion for what it really is, murder.

    1. Except that this taxes employees of the corporation. Jess Bezos couldn’t give a shit less about this. His employees will pay it not him.

      1. Good. Fuck the employees too.
        I’m a Walmart man – buy Great Value products!

      2. John, the company pays the cost – from the linked article, above:

        “Businesses with at least $7 million in annual payroll will be taxed 0.7% to 2.4% on salaries and wages spent on Seattle employees who make at least $150,000 per year, with tiers for various payroll and salary amounts. For example, a company with an $8 million payroll and one employee making $180,000 would pay a tax of 0.7% on $180,000 — or $1,260.”

        1. It’s still paid by employees. You think raises and new hire pay will just ignore this? It’s the same as Social Security “half paid by employer” which is just another way of cutting employee pay.

          1. “Stick it to the man! Wait, the man is me? Fuck that!”

          2. Jesus Christ.

            Thank you, I took economics before it was poisoned. Regardless of who ends up holding the bag, IT’S A TAX LEVIED ON THE COMPANY.

            1. Just because its levied on the company doesn’t mean the company pays it.

              You took economics before it was poisoned so you should know that companies do not pay taxes. Owners, employees, and customers pay taxes.

              1. Let me know when amazon sends out a tax bill to their employees.

                1. When the state increased the wholesale gas tax, I didn’t get a tax bill, just an increase in price. Employees also don’t get a bill, just suppressed wages.

                2. They do – with every paycheck. Every paycheck is lighter by the amount Amazon’s owners can squeeze out to cover Amazons tax bill. Same with customers – they pay more to cover that tax bill.

                  Whatever can’t be squeezed out of employees and customers, that remainder is what is paid by the owners.

                  I thought you said you took economics, before it was poisoned?

                  1. Trust me, Amazon will just increase their take on goods sold through their site by independent sellers nationwide. Thats hw they roll. Squeeze the guys that can’t fight back. Our option is to stop selling on the Zon, or pay the added mordita for the “priviledge” of selling through them. Thjey already squeeze and undersut and shaft us in many ways, that will be an easy way to recoup the Seattle Tax.

                3. Might be something to do to encourage them to think when voting: “This is how much we pay you. This is how much extra we pay the state for the privilege of using their property’s (aka your) labor…that we could be paying you.” Because the state is treating you as their property if they demand to be paid a cut when you get a job…

        2. Two words

          Tax

          Incidence

          1. Three Words

            Seattle
            Times
            Article

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    3. RabbiHarveyWeinstein, it’s clear that you don’t understand the economic structure or workings of business & government. Big companies pay plenty and provide enormous benefits to communities. I suggest remedial economics.

  4. I wonder if you could make a 14th amendment case against this, since it clearly and overtly targets Amazon.

    1. Probably hits every Seattle sports team, too.

    2. Doesn’t it apply to Boeing and Starbucks and Costco and Microsoft as well as Amazon?

      1. Boeing is HQ’d in Renton, Costco in Kirkland. Charbux can easily move its fancy new digs outside of the city limits, but may not. They think beinb based IN Seattle is a plus. Let them. Their in-city payroll is not that large, though.Each store is its own business entity, so none will pay the tax.. threshhold too high so they’re under that line. Their 200 tonne per day roastery is down in Kent, so that’s outside. I doubt the headquarters payroll is above the floor. If it is now, watch them “relocate” enough to outside the Zone to fly below the ceiling.

        This tax targets Amazon directly. Much as I despise both the company and its founder, this still is a raw deal and likely something ol Jeffie will deal with one way or another. Tney will shift enough of their minioins out of their downtown headquarters to lose enough alitude to escape the tax. And laugh all the way to their new out of state digs, soon. You wonder why they were looking at some “satellilte’ headquarters locatioins a year or two back> They KNEW the Amazon tax was not dead when it was “repleaed” That was a feint, and they knew it.

  5. “If you attempt to overturn the Amazon Tax, working people will go all out in the thousands to defeat you,” said Sawant. “We cannot and will not stop until we overthrow [capitalism] and replace it with a world based instead on solidarity, genuine democracy, and equality. A socialist world.”

    People voted for this person. You get the government you deserve.

    1. That statement caused me to order more ammo. I’m not sure that was what she was going for, but here we are.

      1. Let me guess, Fat Mike. Your “drug of choice” comes in cans of about a quart capacity, is a black to dark grey granule form, often with a greenish tint to it, does repidly deteriorate when exposed to air, especially moist Seattle air, is not very dense, and a little dose really produces a nice BANG for your buck. Often makes good friends with lead, copper, brass. That’s my guess on Fat Mike’s Drug Habit. Its one we have in common, and one the Commie Sawami rightly fears.

    2. Somebody Baker Act that crazy woman.
      If the quotes are anywhere near correct, she wants to run the city on money taxed from the capitalists she put up against the wall.

      A quick review of history tell me that the current politicians-in-charge are the first group to go when the socialists take over. Then the teachers, THEN the rich.

      1. Let me know when they are finishing up with the teachers… then I’ll gear up.

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  6. The city council later passed a compromise $275-per-employee head tax, which they then embarrassingly repealed a month later after business interests launched a campaign to put that tax to city voters through a ballot initiative. The experience naturally enraged the city’s progressives, who vowed to fight on.

    Obviously the solution is a $275,000-per-member tax on the city council.

    1. With a 200% tax on political contributions?

    2. Bezos could hire hitmen for less than that. I’m just astounded by the lunacy there. Are the only voters the homeless and UW faculty and students?

      1. Few UW faculty LIVE inside Seattle. They are too smart for that, so they can’t vote out this creepy creature. Most students will vote not from their dorm room address, but their permanent residence address. They can’t vote her out either. Slick system, there.

  7. “The way this tax has been structured distributes the burden of the tax to the businesses with a greater capacity to pay, which is the economically sensible thing to do.”

    Requiring council members to eat a big bag of dicks with the size of the bag of dicks based on the length of service of the individual council member distributes the burden of the dick eating to those most familiar with dick eating and is an equitable and fair way to share the task.

    Jesus, these fuckers are pretty open about their “you’ve got money and we want it” attitude, ain’t they? How’s about you just fuck off with your “fair” tax scheme and we’ll just keep our money?

    1. Pay your fair share, kulak!

  8. The tax applies to companies with at least $7 million in annual payroll

    7 million in payroll? That’s really not all that much.

    1. “We don’t really ask for all that much.”

      1. >We don’t really ask for all that much.”
        Actually, they don’t, or at least the State of Washington does not. Unlike nearly all non-southern ooastal States, Washington has no income tax, and does not really allow cities to tax either (though Seattle is now trying). Oregon and California have income taxes of 11% and higher.

        So, even if this Seattle payroll tax goes though, income taxes will still be less than in competitive Northern States. Strictly in short-term fiscal terms, it makes sense for Amazon to stay. But over longer terms, escalating costs and difficulties can be expected in a city run by far-Left lunatics.

        1. Jeff has a simple solution. Transfer a signficant number of the employees based INSIDE Seattle to some city OUTSIDE of Seattle. If the “office” they work for is not INSIDE Seattl,e they’re not paying wages INSIDE Seattle, so they can shrink that number to below the floor that triggers this tax. He is cagey enough to figure it out. He won’t be paying it. And he will make the commie Sawami look the fool she is. A nice Two Fer.

    2. Yep; less than 50 of those $150,000/yr guys.

    3. A healthy company spends 15-30% of revenue on personnel. So it’s companies doing $20-40 million.

  9. Bremerton isn’t that far from Seattle. they should put up a big “Welcome, Amazon” banner and see what happens.

    1. Attempting to flee the peoples paradise is a crime punishable by being sent to a re-education camp and confiscation of all your assets.

      1. They tore down their re-education camp.

        1. It was highly educational – although perhaps not in the manner intended.

      2. There is a, uh, 500 dollar leaving town tax

    2. Bremerton doesn’t have anywhere near the capacity for an employer such as Amazon. Bellevue, and maybe Redmond, are likely to be the major beneficiaries around here.

      1. Bellevue and Redmond are, like Seattle, in King County. Progressives in the State legislature contemplate giving King County taxation authorities comparable to Seattle.

      2. Given the shift towards telework, and the fact that the high-paying jobs at Amazon can probably all be done remotely? You can stick the HQ anywhere with good legal advantages that is business-friendly, and tell all HQ employees beyond the ones needed at physical location to just live where they want as long as it has a good internet connection. There may be specks on the map that have the capacity…

  10. Sawat belongs in prison. Time to arrest the socialists.

    1. “Equality for All!”

    2. We need our own Pinochet.

      Say, Trump owns a helicopter, doesn’t he?

      1. I see your tactic. Free helicopter rides. One way only.

        Bear in mind that the water temperature of Puget’s Sound hovers very close to 51 F year round. At that temperature, few can survive in it for more than twenty minutes. Offer a half price special for Sunset Flights. Make sure they are wearing dark clothing. Harder to see at night.

        Could even revive an old Chicago tradition: Cement Overchoos. Each pair custom fitted. No extra charge for extra large

  11. I thought previous Seattle income taxes had been throw out for violating some Washington state constitutional provision on taxing everybody equally.

    1. we have a VERY corrupt Supreme Court. Seattle passed a gun and ammo tax for all sales inside the city. The groups took that one to court, pushed it up all the way to the Supreme Court, who thought it was just fine. So the gun retailrs simply closed down their Seattle venues and shifted outside the city limits. Issue solved. But the principle stands.. the Constitution in this state DOES requre all taxation to be evenly applied. Taxing Item A inside Seattle and not in, say, Bremerton, is not “evenly applied”. but the eedjits in their black nighties did not see things tht way. Maybe they are products of Wshington’s pubic schools.

  12. I remember way back when the Motor City was floating “Tax Big Auto” and proposing punitive taxes if businesses tried to leave.

    I wonder what ever happened with that.

    1. I hear it went well. OK, at least as far as the “re-greening of Detroit” folks were concerned. Insofar as a huge portion of the city has evaporated.

      1. By regreening of course you mean empty, abondoned lots overgrown with mostly invasive weeds, but at least their green.

  13. Well, what did you expect?
    Someone has to pay for all this looting, rioting, vandalism and Mayor Jenny Durkan’s gutlessness.
    Trashing a city isn’t free.

    1. Mostly peaceful protests, as I recall – – – – – – – – – – –

  14. The city has passed a new payroll tax on large employers that is expected to raise over $200 million a year.

    Spoiler alert: it will not.

  15. ‘On Monday, the Seattle City Council voted 7-2 to approve the “JumpStart Seattle” tax, which taxes the wages paid by businesses to employees making $150,000 or more a year.’

    How many of these ass holes have repeatedly pointed out that foreign businesses don’t pay Trump’s tariffs–US consumers do. So how do they figure that Seattle businesses will pay the wage tax, not wage earners?

    1. None. They aren’t that economically savvy.

      1. The politicians realize that, though maybe some of their voting base are too dumb to. But even after Seattle payroll taxes are factored in, they will still be less than 11%-plus State income taxes in neighboring Oregon and California.

  16. How about a fucking socialist tax? Say, 100% on any income that a person did not actually earn.

  17. Seattle has double digits unemployment, they also have a mandatory $15/hr minimum wage that studies demonstrate decreases hiring and hours. Now they want to tax the companies for upper middle class employees. At least Seattle is an equal opportunity job destroyer.

    1. And to add on this thought process do they really think that this will only impact higher paid employees? Yes, let’s tax content creators, specialists and managers, that won’t at all impact the raises and wages of janitors, assembly line workers, warehouse workers etc.

    2. Also note that the council member stated she spoke with organized labor representatives but not business leaders and then specifically threatened business leaders.

      1. Organized labor representatives have not actually represented the interests of union members as opposed to union management in most fields for decades. (The only unions that have avoided this problem are the ones whose members are in high-risk fields who are willing to dispose of their union if it screws them over.)

  18. Brilliant! What better way to lead a recovery than to make the cost of employing people – including those already employed – higher? Congratulations to home owners in Northern Virginia. You’re about to see your property prices soar.

  19. I have decided not to buy a certain bridge I was recently offered; I hear that there will soon be a bargain in real estate in the northwest.

  20. “saying any repeal effort would result in the proletariat finally casting off their chains.”

    Lol, are there any working class left in Seattle? I imagine a city that consists solely of hobos and limousine liberals.

  21. Have you seen the yard signs that say, “In this house, we believe in science…” and all that bullshit? Well, there’s a reason that none of those signs say, “In this house, we understand economics”.

    1. I’d been contemplating making a countersign along those lines, but, well, I was frankly afraid that the lefties would slash my tires, smash my windows, and torch the house.

      1. The SA are good at suppressing opposing views.

      2. arm up stand yuor ground.

    2. The irony is as a true scientist, published in peer reviewed journals, the idea of “believing” in science is the antithesis of what science is.

      1. As a published scientist, I believe in the scientific method – not on faith, but on its merits. On any given hypothesis? Show me the evidence.

  22. Once upon a time in Detroit there was a mayor, Jerome Cavanagh. He decided to raise taxes here, there and everywhere. Turned out great.

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  26. Somehow, I expect these tax projections to be as good as the projections for the guns and ammo tax. When that was passed, it was projected it would bring in between $300,000 – $500,000 per year. What actually happened was every dedicated gun shop moved out of the city and sales in the locations that remained (a few sporting goods stores and pawn shops) tanked. Actual revenues have barely cleared $100,000 at their best, usually less.

    So consider me skeptical about the $214 million.

    1. Well, if there is a billion dollar industry, imposing a 10% tax will result in $100 million in tax revenue. Actually, the models say in addition to the $100 million from the direct tax, the additional government spending will generate additional tax revenue through the multiplier effect. We all know models are accurate.

  27. “”If you attempt to overturn the Amazon Tax, working people will go all out in the thousands to defeat you,”

    If she can back this statement up, why is she afraid of a referendum?

  28. I’m not a fan of Elon Musk, he gets way too many government subsidies for my liking. But if Elon Musk ran Amazon, they would not longer be in Seattle. Probably in Nevada instead, some dry wash named Galt’s Gulch.

  29. Double it every day until the city and state budgets are balanced.

  30. lol… Hey Amazon employee’s; kiss that yearly inflation pay raise good-bye. The state just stole it.

    I miss the days when stealing was considered a crime and the very word “tax increase” would set American’s off like no tomorrow. Heck, the words “tax increase” launched the revolutionary war via the Boston tea party.

    Seems today government theft is just business as usual. Vote for the [WE] foundation. We steal from the working competent and give to the self-entitled incompetent. What an incentive for mass rioting and gangster land theft… Don’t *earn-it* — *steal-it*…

  31. Let me know when amazon sends out a tax bill to their employees.

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  33. our most vulnerable community members.

    Appear to be productive citizens with deep pockets being picked by an venal majority.

  34. Good luck getting talented people who could work for a competitor in a vibrant city to move to Bumblefuck. I would be surprised if other popular cities with a hight quality of life don’t follow suit.

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