Amazon has threatened to move jobs out of its hometown of Seattle after the city council introduced a new tax to try and address the homelessness crisis.
The world’s second-biggest company has warned that the “hostile” tax, which will charge firms $275 per worker a year to fund homelessness outreach services and affordable housing, “forces us to question our growth here”.
Amazon, which is Seattle’s biggest private sector employer with more than 40,000 staff in the city, had halted construction work on a 17-storey office tower in protest against the tax.
Pressure from Amazon and other big employers, including Starbucks and Expedia, had forced councillors to reduce the tax from an initial proposal of $500 per worker. The tax will only effect companies making revenue of more than $20m-a-year.
The tax is expected to raise between $45m and $49m a year, of which about $10m would come from Amazon.
The company said it would restart building work on the tower but may sublease another new office block to reduce its tax bill.
“We are disappointed by today’s city Council decision to introduce a tax on jobs,” said Drew Herdener, an Amazon vice-president. We remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.”
Amazon’s chief executive, Jeff Bezos, is the world’s richest man with a $133bn fortune.
Campaigners said the company should be forced to take financial responsibility for Seattle’s cost of living, which has forced many families on to the streets. There are almost 12,000 homeless people in Seattle region, equating to the third-highest rate per capita in the US. Last year 169 homeless people died in Seattle. The city declared a state of emergency because of homelessness in late 2015
Before the council vote on Monday, more than 100 people marched through Amazon’s campus and held a rally outside the company’s new spherical greenhouses, some holding signs saying “Tax Amazon”.
Seattle councillor Teresa Mosqueda said: “People are dying on the doorsteps of prosperity. This is the richest city in the state and in a state that has the most regressive tax system in the country.”
The vote was passed unanimously, with several council members saying they were voting reluctantly in favour of the lower rate for the tax after Seattle’s mayor, Jenny Durkan, threatened to veto a higher rate.
“This was a tough debate. Not just here at city hall, but all across this city,” Durkan, said. “No one is saying that this will solve everything, but it will make a meaningful difference. This legislation will help us address our homelessness crisis without jeopardising critical jobs.”
Politicians from 50 other US cities wrote an open letter to Seattle council in a show solidarity with the councillors attempt to tackle Amazon’s impact on the city.
“By threatening Seattle over this tax, Amazon is sending a message to all of our cities: we play by our own rules,” the letter said.
Starbucks had also fought against the tax, with its public affairs chief, John Kelly, accusing the city of continuing to “spend without reforming and fail without accountability, while ignoring the plight of hundreds of children sleeping outside”.
He added: “If they cannot provide a warm meal and safe bed to a five-year-old child, no one believes they will be able to make housing affordable or address opiate addiction.”
Marilyn Strickland, the head of Seattle’s chamber of commerce, voiced business leaders’ opposition to the tax. “Taxing jobs will not fix our region’s housing and homelessness problems,” she said.