While Seattle residents held their breath yesterday hoping for a peaceful May Day, today the Seattle Council prepares to celebrate Newton’s 3^rd Law Day. It turns out the Seattle business community may have a forceful reaction to constantly being targeted by elected officials. Today’s example comes as the Seattle Council considers imposing a jobs tax. As reported by the Seattle Times:

“'I can confirm that pending the outcome of the head-tax vote by City Council, Amazon has paused all construction planning on our Block 18 project in downtown Seattle and is evaluating options to sublease all space in our recently leased Rainier Square building,’ Amazon Vice President Drew Herdener said in a statement this morning.”

Responding to Amazon’s announcement, Councilmember Lisa Herbold told the Seattle Times:

“It’s not what I would expect from a corporation that says that it is committed to working with Seattle, as it did last year when we worked together to put together the reset meeting. This is really backsliding on that commitment.”

What exactly is Amazon responding to?

As described by the Tax Foundation:

“It will be difficult for Seattle to top 2017 for the sheer number of new or higher taxes considered: a city income tax, foreign buyers’ and luxury real estate taxes, soda taxes, short-term rental taxes, a higher parking tax, and a business head tax. But it won’t be for lack of trying. After a proposal for a 4.8 cent per employee hour tax fell short last year, the city council is back with a new version: a 26.042 cent per employee hour tax. That’s more than $540 per full-time employee per year, and it is, in the literal sense, a tax on employment.”

For context on how rare a jobs tax is the Tax Foundation continues:

“At more than $540 per employee per year for eligible businesses, what Seattle is considering is an order of magnitude larger than what other cities have tried. It’s 11 times the size of a tax Chicago abandoned for contributing to unemployment . . . And it’s nearly 22 times the rate of a previous head tax Seattle repealed back in 2009. 

Though the Governor forcefully fought the President’s attacks on Amazon, it is unclear if he plans to engage on the Seattle jobs tax. According to the Seattle Times:

“Jaime Smith, a spokeswoman for Gov. Jay Inslee, said Amazon ‘reached out to us to talk at a high level about this.’ But she said the concerns raised were more about ‘the broader issue; of the company’s reputation and treatment in Seattle, and ‘not so much about the head tax, per se.’”

Meanwhile, Senator Palumbo told me today about Amazon’s announcement and Seattle’s jobs tax:

“It’s unfortunate that we are at this point in the 24-year relationship between Seattle and a homegrown company like Amazon. The potential ramifications of actions by the Seattle City Council are not confined to the Seattle city limits. This is an issue that affects our whole state economy and the competitiveness of Washington to attract new employers.”

Sen. Palumbo was part of the effort to “refresh” relationships with Amazon after it announced it was looking to locate HQ2 out of Seattle.

As for Seattle celebrating Newton’s 3^rd Law Day today, former Seattle resident Stefan Sharkansky quipped to me:

“The City Council will just try to repeal Newton’s 3^rd Law, like they keep trying to repeal the Law of Supply and Demand.”

Time will tell if Seattle can succeed in rewriting the laws of economics.

Additional Information
Dear employer: Pick Seattle and you too can pay a per employee head tax
Tax Foundation: Seattle Proposes a New Tax on Jobs
Tax Foundation: Seattle Business Head Tax Proposal Threatens its Thriving Tech Sector