On Monday, Seattle City Council had unanimously passed a controversial tax on big businesses to help the fund which are for providing affordable housing and fight homelessness to which Starbucks have given a scathing response on Tuesday.
The ordinance calls for the tax to sunset after five years, with renewal requiring a council vote in 2023.
The Council voted 9-to-0 to pass a compromise tax that will charge businesses $275 per-employee per year, instead of the $540 per employee figure initially proposed. "Taxing jobs will not fix our region's housing and homelessness problems", she said. About 60 percent of the revenue will go to creating deeply affordable housing, and about 40 percent for homeless services, with an emphasis on programs that get people into emergency and temporary housing.
"We have community members who are dying", Councilmember Teresa Mosqueda said before the vote, according to The Seattle Times.
"This city continues to spend without reforming and fail without accountability, while ignoring the light of hundreds of children sleeping outside", he said. The tax is meant to raise $75 million per year which would then be used to subsidize the construction of affordable housing in the city.
The tax plan applies to firms in the U.S. city who have an income of over $20 million and amounts to an extra 14 cents in tax per hour worked by each employee under the companies who are large enough to be eligible - around 500 in total.
The mayoral veto needs a more powerful force for it to override, which now has the majority of only five members, who have given a thumbs up to the head tax of $500 per employee, in order to assist the homeless.
Other unions, including the Service Employees International Union, supported the tax. Sayeth Steve: "I hope that the states are more focused on cutting their budgets and giving tax cuts to their people in their states than they are in trying to evade the law".
The senator believes he can prove the head tax is illegal. And Amazon's hardball politics in Seattle has further soured some local leaders.
"This legislation will help us address our homelessness crisis without jeopardizing critical jobs", Durkan said in a statement.
"The private sector will respond in a negative way to the new head tax, in this case with less hiring and modestly reduced wages", Chris Edwards, director of tax policy studies at the Cato Institute and editor of www.DownsizingGovernment.org, told FOX Business.
The city also pays $1.6 million to the Seattle Police Department Navigation Team and $1.3 million for Navigation Team management and clean-up contracts.
Should large businesses be the target of initiatives like this? A count a year ago found King County's homeless population to have reached more than 11,000, and a pro bono report issued last week by McKinsey & Co. for the Seattle Chamber of Commerce found that it would cost about $400 million to address the shortage of affordable housing in the area.