Amazon Seattle: deeply committed to being part of the solution to end homelessness.
Just two weeks after passing a large tax on major companies like Amazon and Starbucks, the Seattle City Council backed off from their unanimous stance and voted 7-2 in favor of repealing the tax, mainly due to major backlash from Amazon.
This tax proposal, known as the “head tax” or “Amazon tax” aimed to charge major companies about $275 per full-time employee every year with an attempt to use that money to fund ongoing city-wide projects to fight the growing homeless rate.
With pro-tax groups chanting “stop the repeal” and anti-tax groups holding “no tax on jobs” banners drowning out the voices of City Council members, it has become obvious just how divisive the citizens of Seattle are regarding issues with the proposed tax and the homeless epidemic.
The tax has targeted nearly 600 separate businesses making a minimum of $20 million in gross revenue each year, but as Amazon leads the city by far in employing over 45,000 residents, they clearly would be affected more than most companies in the region.
As the City Council repealed the tax, it became even more obvious just how much power Amazon has over the local government in Seattle. That may be good for Amazon sellers, but it is a grim development for the foggy Northwest city.
If Amazon can effectively push back against government taxes and cause them to change laws, what other policies can they shape in the future?
Why was this Tax Proposed in the First Place?
The Amazon tax was proposed in an effort to decrease the growing homeless rate around the Seattle metropolitan area that has occurred over the last several decades.
The thought process behind this tax proposal is relatively simple: tax major companies and use some of that tax money to instill programs to get homeless people into affordable homes and find them with jobs that provide a livable wage.
Considering that many have criticized Amazon over the years for contributing to the growing income gap in Seattle through paying lower-rate workers unlivable wages, Amazon seems like the perfect candidate to receive a tax like this.
However, the poorly structured nature of the tax could have caused Amazon to lay off some employees to lessen their financial burden, which could in turn lead to an even higher homeless population.
The city of Seattle is working as diligently as possible in trying to provide homes or homeless people and spent over $68 million in 2017 alone trying to fight the issue.
Despite their efforts, Seattle still has over 12,000 homeless people in the metropolitan area, a four percent increase from last year. There were also 169 homeless deaths in 2017 alone, a number that could grow if the homeless population continues on the same trajectory.
Seattle plans to spend even more than last year’s $68 million in 2018, and this proposed tax would have brought in approximately $48 million annually, according to the Chicago Tribune. Many who supported this tax believed that it was the city’s first major step towards building affordable housing.
However, this proposed tax and subsequent repeal has drawn ire from businesses and residents alike who worry that the homeless issue in Seattle will continue to grow despite the city’s best efforts to fight against it.
Amazon Vice President Drew Herdener suggested that the problem isn’t raising money for the programs, but spending that money inefficiently:
“This city does not have a revenue problem – it has a spending efficiency problem,” Herdener told the New York Times. “We are highly uncertain whether the City Council’s anti-business positions or its spending inefficiency will change for the better.”
Herdener went on to say that Amazon is “deeply committed to being part of the solution to end homelessness in Seattle,” but it begs questioning whether Amazon is the main cause of this homeless influx.
Amazon Seattle: What Should Sellers Make of This?
The most obvious takeaway from the situation is just how powerful Amazon is.
For someone working with Amazon, this has to be great news as the company has shown it can flex its muscles and force the hand of local governments to shape policies in a way that is beneficial to the company.
Amazon never expressed any desire to leave Seattle and did not threaten to take away jobs as a result of the tax, but just the fact that they could have shows the immense leverage that they have over the city. Had they forced the issue and threatened to hurt the local economy, the company could probably affect more than just one policy in their favor.
That is scary if you are a local resident of an area where Amazon does major business, but should be music to the ears of sellers who have everything to gain as Amazon grows stronger.
Though the positives of this situation are obvious for Amazon sellers, the subtle negatives that come forth in this story could have an adverse affect on business over time.
With people realizing just how much power Amazon has, they may strive to invest more of their money in smaller businesses in an effort to boycott the company.
For instance, the people who were chanting “stop the repeal” at the City Council meeting and others who are like-minded may begin to organize city-wide or even nationwide boycotts of Amazon and its products, which could obviously have a negative effect on sellers.
To combat this, Amazon must truly abide by Herdener’s words about the company’s commitment to ending the homeless epidemic through their own personal endeavors.
Considering that Amazon has drawn a lot of ire from residents who think the company does not care enough about the local community, now would be a great opportunity to undergo a public relations campaign to mend any broken relationships with the public.
Amazon has done some work that has gone overlooked by many in the community on the homeless epidemic front, such as letting a Seattle homeless shelter for families move into a motel it owned in 2016, building a homeless shelter in Seattle in 2017 and even pledging $1 million for a homeless shelter in whichever city it chooses for the HQ2.
While these programs all took place relatively recently, none drew major public interest or moved the needle much at all in terms of actually solving the problem.
If the company does undergo a campaign to end the homeless epidemic through efficient spending, that goodwill could manifest itself into a much happier customer base and in turn, more profit for sellers.
Cyril Zackary Penn IV is a soon-to-be graduate of Hofstra University with a Journalism degree from Sonoma, California. He started his own blog in high school and has been writing about sports, news and entertainment since. He is currently a staff writer at AXcess Baseball as well as the Hofstra Chronicle and formerly was the Sports Editor at Man of the Hour Magazine.