Bingo, Amazon Is Getting Taxed!

"Jeff Bezos and his billionaire friends are wishing they could call a do-over and have the modest 2018 tax back."

Comments

1

And a job killer to boot!

2

And Eyman should be in jail because he's a thief.

4

@3 So instead of once again trying to fix inequality by giving a little more money to people who don't have enough of it, the Council has decided to try taking a little money away from people who have too much of it.

That's kind of the opposite of "throwing," isn't it?

6

@1 The jobs are already dead. This is couch cushion money that could go a long way. It's basically what Coinstar takes out of your hard earned change but at a much lower percentage.

7

Love the Bingo concept! It's the best way to get through those insufferable meetings!

8

@3,

The United States "won" the cold war against the USSR pretty much by throwing money at the problem.

Seriously, the cold war was basically the two superpowers seeing who could flush the most cash down the toilet as rapidly as possible.

9

Kshama finally has her pound of flesh from Amazon so at least we don't have to hear her screaming into the wind for a couple of months about this issue. I predict by early 2021 though we'll start hearing the rhetoric ramp back up that this tax needs to be increased by removing the exemptions and taxing all payroll for companies about $7M. The city has some serious revenue problems in the years ahead. Not only will sales tax revenue continue to struggle as companies keep workers at home but there is still the issue of the massive unfunded pension liability. From a recent article:

Seattle’s long-term financial situation looks bleak. The city has guaranteed $6.2 billion in retirement benefits to its workforce yet hasn’t funded $2 billion of those promises (2018). Therefore, each city resident owes $5,400 just to cover the unfunded liability, according to fiscal accountability organization Truth In Accounting.

10

@1 -- Why would this kill jobs? Seriously, I want to understand your reasoning. Keep in mind,this is not a regular payroll tax. You can hire as many people as you want, and not pay a dime in taxes, as long as you pay them under $150,000. This means that instead of paying one person $200 grand, you pay two people $100 grand.

Meanwhile, FICA taxes cut off before this limit. This means that basically, this tax kicks in at about the point where FICA taxes cut off. The FICA taxes encourage the employment of high paid workers, where this encourages the employment of lower paid workers.

Realistically, this will do nothing for employment. No company is going to change their policy because of this tax. Once you get to the point where you are willing to pay someone $150,000 grand, you don't give a flying fuck about a measly 1 or 2% tax, just like you aren't excited that FICA taxes have cut off at that point. You just want that highly skilled worker. After all, there are only so many people who can throw a 95 MPH fast ball, and if you need a pitcher, you will pay him.

11

Can we recall Durkan? Christ. She may as well be on the Chamber of Commerce payroll.

12

@5 -- https://www.investopedia.com/terms/p/progressivetax.asp, or if you prefer: https://en.wikipedia.org/wiki/Progressive_tax

13

@9:

$2 billion? Bezos could pay that off with less than 1% of his net worth. IIRC, he was bragging just a few months ago about making $13B in less than 15 minutes, so on a good day it might take him maybe 3 minutes to cover that amount all by himself.

15

The big question is whether it is allowed by the state constitution. My guess is, unfortunately, it isn't. The very thing that makes it a good tax probably makes it unconstitutional. You are supposed to tax everything at the same rate. That is why, for example, an income tax is constitutional, it is just that we would have to be like a lot of states, and have a flat income tax. In this case, we tax some payrolls different than others. We also tax payrolls differently depending on how large their payrolls are. Unless there is a change to the state constitution, I don't think this tax will be allowed.

Oh, and Andrew Lewis' capital gains tax is probably OK. That is because it is a flat 1%. The only problem is whether a capital gains (of any sort) is unconstitutional for some other reason (e. g. maybe the city can't pass a tax like that). Or maybe the deductible is unconstitutional. That seems like a simple problem to remedy -- simply have an instant rebate for those under a certain income (which makes the deductible a distinction without a difference, and thus constitutional).

Likewise, Durkan's proposal (a flat 1%) is probably OK as well.

I'm just theorizing here -- I'm not a lawyer, but that is my understanding of the law.

16

Great, they passed a progressive payroll tax. When are they going to roll back all the regressive taxes and utilities bills? Sales tax, property tax anyone?

18

So, does this New Progressive Tax do anything to give relief or eliminate any regressive Taxes?
No. We're still back to square one with an additional New Tax with some new spending.

19

"...Sawant has still called this a victory for her movement,"
You should have had 'Sawant take credit for anthers legislation" as one of your squares.

21

One thing I can't find an answer for in all the recent coverage: does this payroll tax apply only to companies officially HQ'd here or would it apply to all companies, no matter where they are HQ'd? If the latter is correct, there's a lot more than one company with a $1B+ payroll in this city.

22

@10 see above, @20 makes a great point. No company is going to say, "hey that role that typically gets $200k should be split into two $100k roles to avoid this tax" - that's not at all how hiring people works. If you need a more expensive person's experience and abilities on your team, they aren't going to magically get cheaper and more plentiful just because you'd like them to. Team needs aren't super hot-swappable and flexible like that.

"So in effect we trade $150,000 of money spent on the economy for $3,000 of tax which will be spent in the economy." Spot on @20.

23

If CM Sawant desires more credit, we who oppose this tax can oblige. Let's all agree to call it the Sawant Amazon Tax II -- Head Tax Boogaloo. Her vast unpopularity citywide will help our Referendum plans immensely.

(Oh, and George Orwell gets vindicated, yet again: a flat tax is not "progressive." Please keep repeating that until you're sure.)

28

@13 of course Bezos can cover the pension obligation but this tax doesn't impact Bezos in any way. I'm continually amazed that these types of taxes are sold as a some sort of pushback against the insane wealth of Bezos yet the reality is this won't do anything to his wealth at all. His wealth is derived from the value of Amazon stock which can only be taxed if he sells it and even then the chances of Seattle actually being able to get a piece of that is slim and none. I doubt this tax does much of anything to Amazon but if you look at the medium sized professional services firms with highly compensated employees (think those that are the 150-700 range of the estimated 800 companies impacted) you are definitely going to see some movement out of the city.

29

@20 -- "Amazon would never think of just moving those jobs at $150k to say Bellevue or Redmond. Nah, Bezos isn't that smart."

You mean he isn't that stupid. Look, Amazon is in Seattle because he knows he can recruit people to Seattle. He knows that lots of people -- especially high income people -- want to live and work in Seattle. They don't want to commute to fucking Bellevue, or Redmond. So you think that Bezos is going to risk losing really good talent to save 0.7%? Come on man, get real. Imagine you want to hire someone and they say "OK, but you have to pay me 0.7% more". Do you think their counter-offer will be "Sure, but you have to work in Redmond". Followed by "Great, sounds peachy".

It makes no fucking sense. These are not minimum wage jobs. These are highly sought after people, and one way you attract them is by having a place in the city. Otherwise, you would have the jobs in Bellevue in the first place.

Oh, and despite current conditions, companies want people to work in the same place. Otherwise, Amazon wouldn't even be in Seattle. They would be in the Cayman Islands, and every worker would work remotely. Except that isn't the way it works. You want your people -- especially your best people -- to collaborate face to face. So if you really did hire that worker in Bellevue, you would have to move your people to Bellevue, and Amazon sure as fuck doesn't want to do that, because they would lose a ton of people in the process.

30

@23 -- "Oh, and George Orwell gets vindicated, yet again: a flat tax is not "progressive." Please keep repeating that until you're sure."

This tax isn't flat, idiot. It goes up as salaries go up (https://static.seattletimes.com/wp-content/uploads/2020/07/seattle-new-tax-2-WEB-1020x414.jpg). The higher the salary, the higher the tax. In other words, it matches the dictionary definition of a progressive tax.

31

If the point of this tax is to tax Amazon, fire the city council for incompetence. Amazon has a base salary cap of about $160k. Look it up. There compensation is not primarily "salary". So by that figure, an extremely generous estimate would mean it raises about 7.5 million from Amazon if Amazon has 50,000 employees working here all making the salary cap (probably more like 1/10th of that). For the most part, the city council can't hit the broad side of barn. How fucking hard is it to collect more than a million bucks of taxes from a company worth 1.5 Trillion dollars??? Way to get like a millionth of a percent guys.

33

@25 -- "Frankly, if I were Bezos, I'd teach the city a valuable lesson. Simply withdraw all operations and leave the offices vacant. "

Yeah, I would move to another city. Or at least, move half my operations to another city -- call it HQ2. Yeah, great idea. Sure, it would fuck up my company. Lots of people -- the very people that this tax would hit -- would simply quit, and work for someone else. My stock would go down, and it would take years to build up the kind of organization I had before. But hey, the lesson would be learned.

Fucking ridiculous. That isn't how companies work. Amazon had plenty of opportunity to move a huge chunk of their jobs to somewhere else. Yet despite various lucrative offers (low taxes for years, huge financial incentives) they didn't. That is because they would have trouble attractive enough good people in, say, South Carolina. I'm sorry, but if you just graduated from the UW with a computer science degree, and you are top of your class, you don't want to move to South Carolina. That is true not only for the UW, but for universities across the country. Oh, and if you live in California -- where a lot of the experienced programmers live -- you don't want to move to South Carolina either. The only city they came close to moving to was New York, and that is because, of course, lots of people want to move to New York.

@22 -- If you need a more expensive person's experience and abilities on your team, they aren't going to magically get cheaper and more plentiful just because you'd like them to.

Exactly. Which means that if they ask for a little bit more money -- you pay it. That is essentially what is going on here, except instead of the money going to the employee, the money to the city.

Jesus, you taxaphobes are really missing how business works. These are expensive employees. This is a tiny amount of money to attract the right person. You don't pay people this kind of money, and then pinch pennies. If so, they would tell them to just buy their own health insurance, since it costs the company a shitload more to pay that than this tiny tax. Or they would tell them to bring their own coffee. Or work in Tukwila (as @20 suggested). Except they won't. They do the opposite. They provide them with free snacks, and free neck massages, and do their fucking laundry if they ask. Because that is what you do to attract expensive talent. Anyone who has ever spent any time in that sort of environment understands this.

These companies will just pay the tax, and not change their behavior at all.

34

@29- Did you tell Microsoft people don't want to work in Redmond?

35

@27 and the guaranteed sick leave killed jobs.

5 day work week killed jobs

40 hour work week killed jobs

mandatory breaks killed jobs

Everyone remembers the 1960's when the tax rate was in the 70 percentile and nobody was working, right? Strange times. Nobody had jobs for like a decade or two.

When can we go back to feudalism for christsake? Then everyone gets to work again. Whether they want to or not.

36

@33 Have you been to Bellevue lately? New residential and office towers are flying up. Amazon is the primary driver on this. That being said other tech companies are moving into SLU so it may be a moot point.

https://bellevuewa.gov/sites/default/files/media/pdf_document/2020/Major%20Projects%20Downtown.pdf

38

@32 -- " What this will do is any higher pay jobs that may come up simply won't be based in Seattle or those wages will be capped to avoid the tax."

Bullshit. Again, you don't understand business. Fucking hell, this is a 0.7% tax. Imagine you want to hire a software manager for your company. He is currently making $250 grand. He applied for the job, saying he would like to work in Seattle. You have three choices:

1) Offer him $150 grand.
2) Tell him he can work in Bellevue, even though all the employees work in Seattle.
3) Pay the $700 tax.

Holy shit, man, you pay the $700. You pay it every year and you don't worry about it. Jesus, you would pay a headhunting firm a shitload more than that just to find a guy. You will give this guy stock options (if you are a public company) worth way more than $700. If he is actually worth $250,000 a year, then he is worth $250,700 and you sure as hell want him in Seattle, with the rest of your workers.

So, you idiots are fixated on Amazon (probably because of Sawant, and her ego) but what about Expedia. They are a big company, and actually have something huge to lose in moving to Seattle. They will definitely lose employees, who don't want to commute to Seattle. So, what do you think Expedia will do, now that they know there is a big tax coming soon? Will they stop all construction in Smith Cove and sell the property? Will they keep all the high paid workers on the East Side, and the low paid workers in Seattle? Or will they just ignore this tax, and focus on everything else that is going in with the company? Obviously, it is the third.

39

Doubt this will stand up to legal scrutiny.

40

@1 demonstrates that the difference between a thinking person and a conservative is that you always know what a conservative will say.

41

@37 -- And Boeing moved to Chicago because the taxes were lower. Wrong! They moved to Chicago DESPITE the higher tax rate. Illinois has a corporate tax rate of 5.25%, a shitload more than this tax.

42

Bring it. The combination of so many people working from home AND higher taxes in expensive urban areas will usher in an era I will call: The Great Spreading Out. More companies will be inspired to set up in smaller cities. This is a good thing. It will only be bad for the politicians that can't figure out why it didn't work out as planned.

43

Hahahha the butthurt in here is great. Sad that so many of you feel the need to white knight wealthy people who do not give a shit about anything except generating more wealth. But...cry more!

45

So a tech company that currently has most if not all its workers working from home won't move its head quarters thus rendering this tax pointless. Got it. I am just thankful my council member is one of the sane ones.

47

All characters like Sawant are achieving is damaging the real progressive movement long term. Sure, let's spend even more money attracting even more drug addicts, mentally ill into Seattle. Let's turn the whole city into CHAZ.
No sane person, left or right wants to live in a filthy, crime ridden hell hole.

That's why we need a socially progressive mayor, but she/he should be tough on crime like Rudy Guliani.

48

@34 -- Some do, some don't. That's my point. Just ask yourself -- why is Amazon in downtown Seattle? Seriously, why? They could have moved to the East Side, where there was plenty of existing talent and lots of cheap land. So why pay such a huge amount of money for very expensive land? Because that is how you attract workers! Sure, some prefer living in the boonies, but a lot don't. That is why companies have been slowly moving away from their "suburban campus" model. https://www.curbed.com/2017/8/1/16072568/companies-downtown-corporations-suburbs-jobs

It is absurd to think that this very tiny tax is going to change the dynamic for Amazon. Of course they will have additional employment elsewhere -- that is because, in part, Seattle real estate is expensive, and full. But that, by itself, shows how popular working here is. Even second rate property like that at Smith Cove is enough for Expedia to move their company to Seattle (something Amazon isn't doing). There is no reason to believe that any company will move out of Seattle because of this tax -- it is just too tiny.

49

1 Get a job, welfare queen.

51

Oh how people pity the corporatations, with their huge federal tax breaks and billions of offshore profits. The never ending fear mongering about how taxes will force them to leave. Oh noes!!! Better leave now, since Seattle will surely become a wasteland. I mean, Amazon is building, what, 3 different locations in New York City right now (with no tax breaks or subsidies like they insisted they had to have in Queens) and in NYC you pay a state and a city tax. But the job killers are coming!!!! Better run!!!

52

District13refugee @ 9
Your Shylock reference was very moving. Feel free to skip it next time and go directly to ”Jewed them down.”

53

@52 - Oh brother. A very common term. If he even knows who Shylock is I'll give you a $1. Perceiving grotesqueries around every corner must be exhausting for you. I hope the coming weekend is restful.

54

@30: Try looking at the graphic you provided. The overwhelming majority of jobs will be taxed at the same rate, 1.4%. (Just like the overwhelming majority of jobs which would have been taxed under the original "Amazon Tax" were not at Amazon. Please let us know when an extremely subtle pattern in communications from our City Council begins to suggest itself to you.)

Heck, the "Amazon Tax" was "progressive," too -- by your definition -- because not all jobs were taxed. As I've commented in other threads here, this new one is morer progressiver. Not actually progressive in practice, just enough to get folks like you to buy and disseminate the propaganda that it is.

Furthermore, I'd wager much of the anger here is not against taxes generally -- this is Seattle, after all -- but two other things. First, our Council's adamant insistence in slapping a tax on our jobs, in the face of our opposition the Council persistently ignores. Second, the poorly-defined expenditure plan -- not an actual budget; those are work -- which was a big part of our citizens' opposition to the previous EHT. Sir Toby has already mentioned this last point, to thunderous silence from everyone here claiming to defend the tax (or at least attacking the opponents of it).

Right now, a citizen Referendum is our best hope for avoiding an expensive legal battle we are likely to lose, and lose badly, perhaps to the detriment of the cause of actual progressive taxation.

55

AND every wingnut politician is completely butt-ugly. That alone says volumes about GOP dogma.
Teresa Mosqueda: pretty, happy smile!
Matter of fact give me ANY of the lefty women over the shriveled-up vinegar beans on the GOP side.

56

The Bellevue Chamber of Commerce thanks you.

57

@ 53
It doesn't mean it's ok, and I can't recall reading/hearing it in quite some time. Maybe it's very common in your circles.

58

@57 - Maybe. But I still (charitably) think you're reaching...it literally makes no sense to raise a Shylock connection because Sawant isn't even Jewish. Or perhaps YOU'RE the anit-Semite and just hanking to be able to write that phrase "J**ed them down." See, I can see phantoms, too.

59

Shylock is a racial slur. Believing otherwise is refusal to acknowledge fact. I mean if you're going to purposefully use racial slurs, own it. Denying it and pretending you aren't doing what you're doing makes you look even more racist (and stupid). Don't want to be called a racist, don't use racial slurs.

Today, “shylock” is considered an antisemitic slur by the Anti-Defamation League.

Jewish Americans have publicly challenged the portrayal (of Shylock) as an insult to Jews for more than 50 years, according to a review of TIME’s archive, even as it remained a fixture of the modern lexicon.

1980s:
https://www.nytimes.com/1981/02/22/theater/debate-over-shylock-simmers-once-again.html

1950s:
Writing in the journal Engage, slang lexicographer Jonothan Green has noted the word was listed as a taunt for Jews.

60

@ 58
I bet that's another "very common term" in your circle.

61

Like any of these high paying jobs will still be here in 20 years no matter what we do with taxes. Government needs to operate like a business and get it while they can cause it wont be there in the future. When was the last time a Boing worker bough his wife a car with his bonus?

62

@58 from the Oxford dictionary - pound of flesh - the full amount that someone owes you, even if this will cause them trouble or suffering. I tip my hat to you for taking one phrase and turning my comment on the Amazon Tax into an anti-semitic affront to the good people of the Slog. Truly you are a master of the spin and I am unworthy to post further comments on this matter. I will consider myself canceled for today.

63

@34:

I literally had conversations with Microsofties about that very subject in the mid/late 1980's, back when the original Redmond campus was built on what had previously been a large chicken farm in a broad agricultural belt between Eastgate and Redmond.

FWIW, they hated the commute then too (this being long before MSFT had it's own private bus service or there was even an adequate freeway exit from 520), but the free bagels and Mountain Dew, and Ultimate Frisbee field eventually won them over, proving just how little it actually takes to turn the head of your average coder.

64

As I recall, Boeing moved corporate HQ to Chicago because Phil Condit was tired of getting buttonholed over assembly jobs when he went to the opera. With no manufacture in Illinois, nobody would care how Boeing screwed the workers.

65

@63 -- Don't forget the real possibility of becoming rich. Seriously -- I'm a retired software engineer, having worked for at least a dozen companies. It is in the back of your mind, because we all know people who aren't half as smart as us, who were in the right place at the right time and struck it rich.

And let's face it. Back then the alternatives were companies like Safeco. Sure, it was a great commute, but holy fuck, who wants to wear a suit every day, and then be told by your (very nice) boss that you need to get your hair trimmed during your lunch hour because it is looking pretty shaggy, and the higher ups are talking about it. (Yes, that happened to me, too).

A company run by a bunch of nerdy, hippie-ish Lakeside dudes seems like Nirvana in comparison, even if it is in bumbfuck Redmond.

66

@ 63
Our friend @ 53 owes me a dollar, apparently you do seem to know who Shylock was.

Now seriously... admittedly my harsh tone was an instinctive shot from the hip. Apologies for the harsh tone. Please be aware that the term you used can be offensive to some regardless of what a dictionary may say, and take it into consideration next time you're about to use it. Thanks!

67

Oops,
@ 62 District13refugee

68

@67 noted. I actually did have to look up the reference. I’m familiar with Shakespeare of course but it’s not recent so I had to refresh. Apologies accepted and similarly offered for any perception that I meant to impugn anything other than Kshama’s intentions with this tax.

70

This is whack-a-mole without a regional plan. There exists such a thing called economic geography. It's taught in elitist liberal Universities.

71

Whoa, just read a bunch of the comments. Is this really just about those who couldn't do math in school getting back at those who could?

74

@68 - Thanks. I get my dollar back from @66, who took the time @60 to suggest I'm an anti-Semite. Real nice. All because I pointed out that it was entirely likely the phrase had not been deployed with a Shylock intent. Which, in fact, is exaclty what happened tyo be the case. Extra points to Xina @59 for chiming in to make a point that no one evr disagreed with...that, had the reference been explicitly to Sawant being Shylock, it would have been reprehensible. All of this is a good reminder not to assume the worst in everyone's intent. But that would mean less scolding and less victimhood, so I'm not going to be that dollar I just got back on things gettiung better anytime soon.

79

@ 74
Yes, you're eligible for your dollar back, which is actually proving my point. I didn't mean your both anti-semitic, but rather observed the level of ignorance coming from using expressions used without knowing the context, which can be offensive to some whether you meant it or not.
In closing I'd like to repeat what I wrote earlier: Please be aware that the term you used can be offensive to some regardless of what a dictionary may say, and take it into consideration next time you're about to use it. Thanks!

82

Fuck sawant.

83

@20,
Nothing you wrote contradicts the fact that throwing money at a problem can solve it.

To win the cold war, the US threw money at the problem. That solved it. Period. Capitalism? Socialism? Irrelevant. Throwing money at the problem solved it. The end.

84

So lets see, you are looking to start a company, move a company, or acquire a company and that company has say $10mm in payroll for employees making over $150k (or if starting a company you have venture capital that allows you to hire those people). Seattle has higher rents, higher cost of living and now higher taxes than say Kirkland, Redmond or Bellevue or even say Austin. Your company makes software or other things that don't require a production site and allows work from home. Why would you choose Seattle or choose to stay in Seattle given much higher costs (I see Bellevue, Kirkland and Redmond getting some new employment and revenue)?

They assume $214mm in annual revenue. If just one company (we know who) decides to move most/all of the employees making over $200k to Bellevue, then the losses in restaurant and sales tax alone plus the loss of the 1.7% tax on Amazon would reduce this $214 drastically.

Oh also, the city is advertising that: "If you are thinking of moving your company here, fine just be aware that if you are bringing high paying jobs that we want to tax them". And most companies/people believe that taxes will be going up so while it might "only" be 1.7% now, companies would be anticipating a risk that it could/will go up to say 2.5% (or higher) in the future. And it is not indexed for inflation so 20 years from now $150,000 will be entry level for most tech jobs.

86

@20, 22 - 3k vs 150k huh? So you're saying they spend every penny locally? That's crazy!

Regardless - You think even if Amazon moves Seattle jobs to Bellevue (to save around 1k? Doubtful, but still..) that they still won't be spending that money in Seattle? Those employees aren't going to move to Bellevue just because Amazon moved their job to Bellevue to save 1k per year in taxes.