The Seattle city council is considering a $500 “head tax” on all businesses with more than $20 million in annual sales. If passed, each affected employer (including Amazon), would have to pay the City of Seattle an average of $500/year for every employee on the payroll.
The tax would cost Amazon $20 to $30 Million /year. Because of this, Amazon has halted all construction in Seattle including a large futuristic project in downtown Seattle near their headquarters. That construction project had employed over 1,000 workers who are now looking for other work.
Amazon had planned to hire 7,000 local employees for the new facility, but has indicated it will now hire those people in other cities.
Amazon may also sub-lease out space it just rented in the Rainier Office Building, a premier office space in Seattle that would have housed another one-thousand employees.
Amazon employs nearly 50,000 people in Seattle. The new tax would affect almost 600 businesses and would have a negative effect on hiring in a city that is recovering nicely with the economic growth of the last couple years.
What is really interesting is; the city Council says they need the money for homeless shelters, but the new center included a 17-story tower, now halted by Amazon, that was slated to contain shelters for several thousand homeless people. The shelters were donated by Amazon at no cost to the City.
I live near, but not in, the city of Seattle, so my business would not be directly affected by the tax. However, our local economy depends on overflow from nearby Seattle, so growth in our small town could be affected as well.
After 23 years in Seattle, Amazon is already shopping for a new headquarters location outside of Seattle (Atlanta, GA is the leading candidate). Amazon has said it will invest approximately $50 Billion the new HQ that will employ about 45,000 people.
Amazon made the decision to move due to high taxes, poor transportation infrastructure, traffic congestion, streets in disrepair and many anti-business regulations. Amazon is not the first company to move out. Aerospace giant, Boeing, moved their headquarters to Chicago for many of the same reasons.