Amazon Evades Taxes Meant to Help the Homeless

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  • Black people represent 29.2% of King County’s homeless population
  • The “Amazon Tax” called for a legislative tax of $275 per employee

In the blink of an eye councilmembers have done an about face and reversed their decision due to what they claim is “bullying by Amazon.” Seattle’s City Council had voted unanimously last month to tax the city’s largest employers including Amazon (AMZN +0.46%) to help address homelessness. Is the e-commerce company undermining efforts to help get people off the street?

Why This Matters: The “Head Tax”, also commonly referred to as the Amazon Tax called for a legislative expense of $275 per employee. This tax levy would be assessed per year on for-profit companies that gross at least $20 million per year in Seattle. With more than 45,000 employees in the city, Amazon could have paid more than $10 million per year.

Seattle has the third largest homeless population in the U.S., after New York and Los Angeles. A point-in-time count last year tallied more than 11,600 homeless people in King County which is the area of Seattle where Amazon is located. Black people represent 6.2% of King County’s population and have the highest homeless rate at 29.2%. These figures are a 23% over representation for African Americans in Seattle’s homeless sector, according to the U.S. Department of Housing and Urban Development’s American Community Survey.

Last month the company abruptly stopped construction on a new campus in downtown Seattle primarily due to the tax passing. Now that the Head Tax has been repealed Amazon said it was the right decision and they’ve also re-stated their commitment to helping with the homeless crisis.

Situational Awareness: Since Seattle first voted for the tax, its raised questions about whether California’s Mountain View should have its own “Google (GOOGL +2.10%) tax,” and Cupertino its own “Apple (AAPL -0.05%) tax.” As of now there’s no proposed solution to replace the Amazon tax.

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