Councilmember Kshama Sawant (District 3, Central Seattle) flanked by community supporters, today unveiled her long-awaited proposal to tax Amazon and other big businesses in Seattle to fund a massive expansion of affordable housing and services.
Under Sawant’s proposal, the top three percent of companies in Seattle, as measured by the size of their payroll, would pay an excise tax of 1.7 percent on their payrolls to fund new affordable housing and conversion of existing buildings to meet Green New Deal standards.
The 825 biggest companies in Seattle would pay the tax; the remaining 97 percent of companies – about 22,200 – would pay no tax under the proposal. Non-profit organizations, public employers, and grocery stores also would be exempt, regardless of size.
Sawant’s proposal would enable the city to:
- Build 8,000 new affordable, publicly owned or controlled homes over the next 10 years; and,
- Retrofit 47,000 existing homes in the city to meet Green New Deal standards.
“On behalf of our movement, I’m excited to put forward this bold, transformative proposal. We know that big business, the wealthy, and the political establishment will staunchly oppose this, and that we will need a powerful movement. If we win, this will not only transform the lives of Seattle’s working people, it will set a historical marker for cities around the nation,” Sawant declared.
Sawant’s $300 million tax proposal is similar in size to the 2018 voter-approved measure in San Francisco that taxed big businesses to fund housing and services. The Seattle companies that would pay the tax have, in aggregate, about $90 billion in annual revenue, meaning that the effective tax rate of Sawant’s proposal on their income would be on average a modest 0.3 percent.
“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.
“Today, tens of thousands of people are at risk of being pushed out of Seattle by soaring housing costs. They are nurses, bus drivers, restaurant workers, baristas, mechanics, construction workers, teachers, and more. These are the people who make our city run. Communities of color, immigrants, and the LGBTQ community are especially feeling the stress of housing displacement. Seattle’s Central District, the hub of the African American community a generation ago, is today less than 20% Black. Even tech workers are feeling the vice grip of a private housing market that has failed working people, with average rents in Seattle up 69% since 2010, far beyond the rate of inflation and more than double the national average. Today 46% 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.
“Companies here have reaped billions because Washington state has the most regressive tax system in the nation. It’s time for Amazon and other major corporations to pay their fair share,” Sawant said.
“The crisis for working people is only getting worse,” Sawant said. Last month’s McKinsey & Company report demonstrated starkly the scope of the crisis. It estimates that the region needs ‘between $450 million and $1.1 billion each year for the next ten years.’
“It’s clear, through bitter recent experience, that the private market has failed us, and will not fill this need. So as a socialist city councilmember, elected by and accountable to working people, it’s my duty to put forward bold policy solutions that match the scale of the problem, and to mobilize our communities to win them.”
Under Sawant’s proposal, 75 percent, or $225 million annually, would be spent on housing and social services. The housing would be built under union-designed community workforce agreements, with guarantees for apprenticeship opportunities, priority for local workers to be hired, and union wage rates. The homes would be publicly owned or controlled, and would be built to energy efficiency standards called for under the Green New Deal.
The investments will allow Seattle to build an additional 800 new affordable homes a year, on top of the 300 new homes that are funded through the Seattle Housing Levy.
The remaining 25% of the funding, or $75 million annually, would be spent on converting existing homes that use home heating oil or fracked natural gas to electricity.
Currently the oil and gas used to heat Seattle homes is responsible for 480,909 metric tons of GHG pollution every year, representing about 15 percent of the city;’s overall climate pollution, according to the Seattle Community Greenhouse Gas Inventory Emissions Inventory.
The $75 million annual investments over 10 years will enable Seattle to convert 47,000 homes to clean electric energy.
“My legislation is a huge public-sector, unionized, living-wage jobs bill,” Sawant noted. “We will need thousands of workers to build and maintain the new homes, and we will need thousands more to retrofit existing homes to clean energy. And with local priority hire requirements, we’ll make sure that young workers, especially women and people from racially and economically marginalized communities, will have opportunities to build their city – and live in it.”
With Sawant’s legislation unveiled, City Council staff will now draft the measure into bill language. Sawant expects to formally submit the legislation to the full City Council before the end of the month.
As the legislation moves forward, Sawant and a growing movement of community advocates will press the State Legislature to reject a corporate drive to end-run Sawant’s Amazon Tax legislation. Corporate lobbyists are pressing state legislators to pass a “preemption” law that would permanently ban cities like Seattle from enacting progressive taxes on big business.
“Now, in unveiling this legislation today, we are making it clear that when business or politicians talk about ‘preemption’ – creating a tax shelter for Amazon and big business – they are talking about stopping the proposal I am putting forward today. They want to stop our whole movement to Tax Amazon. They would stop the construction of 8,000 homes and prevent the electrical conversation of 47,000 homes,” Sawant said. “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.”
Editor’s NOTE — charts provided as part of this morning’s press conference: