Will Seattle's Plan for a Progressive Tax Scare Amazon Away?

A Seattle proposal to levy an extra “progressive tax” on the city’s biggest businesses has provoked Amazon to halt construction on a new downtown office building. It’s the latest indication that, as cities compete to host Amazon’s second headquarters, the relationship between the company and the home of its first HQ is growing more fraught.

When it comes to Amazon and Seattle, it’s been complicated from the beginning. After the tech giant opened its first headquarters in the city in 2011 (and other companies followed), home prices climbed, driving displacement and increasing rates of homelessness. By implementing this new tax, nicknamed the “Progressive Tax on Business,” the city would theoretically be able to hold companies themselves more accountable for mitigating these effects: The top three percent of the highest grossing businesses would be charged an annual tax of $500 per local employee, and their cash would exclusively fund affordable housing and homelessness initiatives—about $50 million would go to low-income housing (enough to build 750 new units a year), and $20 million to emergency shelter and services. Between 500 and 600 business would be eligible for the tax, including Amazon.