Right now, some folks are trying to put a new Amazon Tax on the 2020 ballot. Their proposal: a 1.2% payroll tax applied to the largest companies in Seattle. It would fund COVID-19 relief, affordable public housing, and jobs doing retrofitting construction work that could reduce Seattle's carbon footprint by 15%. Now I can't help wondering if we can call it something better...
The Back Tax Act
You might’ve noticed: Used to be that Amazon didn’t charge any sales tax. For more than twenty years, while the company gobbled up more and more retail market share, we gave them this massive break. The company only started collecting taxes in Washington in 2018, well after it dominated retail and made Seattle into a company town.
Amazon shirks more than just sales tax. Jeff Bezos, when looking for a place for HQ1, first looked into opening on an Indian reservation in California, but that proved legally dubious. The next best thing: the city with the most regressive tax structure in the nation. When he went searching for an HQ2 spot, he made a wishlist with all the good stuff that taxes pay for(world-class mass transit system, good schools…), and right alongside that: a demand for tax breaks. Most of the deals that states and cities give are hopelessly opaque. People might get pissed off if they knew how much was being given away.
Amazon demands subsidies everywhere they go, for their offices and warehouses. Even in my home state of Kansas, where the Republican governor had eliminated corporate taxes, Amazon received other tax breaks and gifts for a warehouse in Edgerton, already the lowest tax town along a highway that brings Amazon within same-day striking distance of Kansas City — just another retail core to blight.
And what’s it all for? A couple hundred of some of the most notoriously depressing jobs on the market, plus ZERO evidence that those jobs were “created” and not just shuffled around from other sectors (or cities) shrinking under the pressures of Amazon.
At the federal level, last year they paid an effective tax rate of 1.2% on record-setting profits. The year before, they got a tax rebate.
Recession Preemption Playbook
The coming recession may be deeper than the Great Depression, which is why we need a New Deal level response.
Right wing business owners say a tax now would harm recovery, but more than a century of evidence from across the globe has shown that the best way out of a recession is through robust, well-funded social programs. This pandemic and the coming recession has and will hit hardest on people of color and poor people. If we want a just recovery, we need to fund it. If we are really “in this together” we must reject the individualistic notion that everyone fending for themselves will help our community. We must have some collective willpower to redistribute some of the city’s vast wealth.
That’s what this tax does. A 1.2% payroll tax on the top companies in Seattle, it will fund thousands of construction jobs, building affordable housing and retrofitting homes to decarbonize Seattle. More affordable housing will help turn back the tide of displacement that has wrecked lives and added tons of carbon to the atmosphere.
Right wing business owners also forget to mention that they recently got a HUGE tax cut from Republicans and the Trump administration. So when they say "don't pass a tax now," they're also saying, "Let us keep our Trump booty!"
The Totally Normal Tax
Turns out, a lot of cities have a payroll tax — or very similar taxes.
To name a few: Cleveland, Toledo, Columbus, Cincinnatti (most cities in Ohio), Birmingham, New York City, Newark, St. Louis, San Francisco, Denver, Portland (Oregon). They're all a bit different. Denver’s is “$5.75 per month on compensation over $500.” In San Francisco, there’s an additional “gross receipts tax” for some employers. This was passed as a ballot initiative with a big majority in 2018, and now it's funding homelessness services. One striking example from history: Bologna, Italy. The city passed a payroll tax in the 1970s to overhaul their transit system and make it free. It helped them revive parts of the historic city center which had been turned into parking lots.
Philadelphia and Pittsburgh have wage taxes of 3.8 and 3 percent, respectively, applied to every employer (Seattle's tax would be 1.2%, and only on big fish). Philadelphia passed their wage tax during the Great Depression, and it sprang them out of a budget pit. Praising the tax in 1942, the Pennsylvania Economy League wrote, “[the wage tax] reaches, as perhaps nothing else could, that large group of persons who earn their living in the city, but live beyond its borders. There is a growing feeling that someway must be found by our large cities to make these non-residents share in meeting the cost of government of the communities in which they earn their living.”
Take Back the Power Levy
But Jeff Bezos donates to charity, so he’s good, right? Fuck that. Communities cannot rely on the largesse of billionaires who come and go as they please, sprinkling a little money on charities when they need good PR. The highest ideal of this country is the promise that every person has the right to life, liberty, and the pursuit of happiness. That’s a promise that We The People make and keep, not corporations. It is undemocratic to keep defending this arrangement wherein we are unable to provide a decent life for our citizens because some kings of industry are generous. We The People, through the democratic process — not corporations through no democratic process whatsoever — need to provide the stability and support for everyone to have those rights.