Amazon Tax Passes in Seattle and the Billionaire Class Fights Back
Meanwhile the Movement to Tax Big Business Spreads to Other Cities
On May 14, the Seattle City Council passed a historic tax on Amazon and other big corporations to fund permanently-affordable, publicly-owned housing, under the leadership of Socialist Alternative, Democratic Socialists of America, and socialist City Councilmember Kshama Sawant.
The final bill, a $48 million annual tax on the biggest 3% of corporations in Seattle, was the end result of a powerful campaign by housing activists and socialists over the last nine months. What we won, even though it was substantially reduced under big business pressure and Amazon’s extortionary threat to take away jobs, is nonetheless a major victory and inspiring example for workers around the country – especially as it comes alongside Trump’s corporate tax cuts and as Amazon demands handouts from cities around the country competing for HQ2.
Big Business and the Right Wing Fight Back
Within days of the passage of the #TaxAmazon ordinance, big-business-funded groups launched a ballot referendum to repeal it, raising already more than $350,000. In addition to paid signature gatherers, big business is being assisted by conservative NIMBY groups like Speak Out Seattle, who regularly employ anti-homeless and right wing arguments, as well as by far right forces like Patriot Prayer, whose local political candidate, Joey Gibson, announced his support for the referendum.
Financial backers of the anti-Amazon-tax referendum read like a who’s who of big business and the super rich in the wider Seattle region, with Amazon, Starbucks, multi-billionaire Paul Allen’s Vulcan mega-development company, and wealthy developer Howard S. Wright III (whose family owns the Space Needle) putting up some of the largest contributions.
Labor unions, spearheaded by Working Washington, and joined by housing activists as well as Socialist Alternative, are waging a “Decline to Sign” campaign in order to try to defeat the referendum before it gets on the ballot.
Big business is enraged by the tax in spite of its modest size relative to the enormous profits they’re making off the backs of Seattle workers. This is in part because our movement’s victory bucks the overwhelming trend over the past decades of growing inequality: the slashing of taxes on big business and the rich, and the ongoing shifting of the tax burden to working people. These are central tenets of the neoliberal policy consensus and have been embraced by Republican and Democratic leaders alike. The #TaxAmazon struggle points in an entirely different direction. Rather than just defending against the endless attacks on workers’ living standards, working people in Seattle turned the tables on the billionaire class to score a major offensive victory!
As with the $15 minimum wage, opposition to the Amazon Tax has been fueled by distortions. In talking to signature gatherers, Socialist Alternative members have heard outright lies like the claim that the tax had already gone into effect and that Safeway (a local grocery chain) was already closing two stores.
If enough signatures are gathered by the mid-June deadline, and the referendum is not legally overturned due to the campaign’s dishonest methods, then the run up to the November vote will almost certainly be an all out, epic battle between workers and the billionaire class with the eyes of millions of working people watching. Already the media coverage of our #TaxAmazon victory has exceeded that of our historic victory on the $15 minimum wage, with major stories in big national and international publications and broadcast media.
Defending Our #TaxAmazon Victory
We need to have a sober assessment of the political terrain in the referendum fight. While there is broad general support among working people for taxing big business, there is also genuine concern about Amazon’s threat to take away jobs as well as considerable confusion stirred up by the dishonest arguments in the corporate media. This takes place alongside what is on trajectory to become a multi-million dollar effort to overturn the tax. While big business needs a substantial 17,632 valid signatures in less than a month’s time, we should recognize they are most likely to succeed in putting it on the ballot, given the enormous wealth and clout of their backers and a growing army of paid signature gatherers.
To defeat the referendum effort by November, our movement will need a strong united front of the left and labor movement to wage the strongest possible grassroots campaign. Our central task will be to activate broad sections of working people and youth. To succeed, we will need to not only play defense, but also put forward bold, offensive, fighting demands. We are calling not only to defend the Amazon Tax, but to extend it to a larger tax in this fall’s budget battle; to prevent any of the spending going to homeless sweeps; and to make this victory a first step toward a massive expansion of permanently-affordable, publicly-owned social housing in Seattle that can provide an alternative to the broken private housing market.
We will also crucially need to politically defeat the referendum on doorsteps and sidewalks across the city and in the media. We won the $15 minimum wage by organizing rallies and marches and mass meetings, but also because we answered all the big business political arguments and won 74% of working peopleto support $15/hr.
Amazon’s Extortion and Capitalism’s Race to the Bottom
In the weeks leading up to the final vote, Amazon sent a brazen threat to Seattle workers, promising to halt construction of its new office tower in Seattle if this tax was passed, and in so doing holding over 7,000 construction jobs hostage!
We should recognize that it was in no way financially necessary for Amazon to halt construction on this project part-way through. Amazon’s share of the tax ($11 million annually) is mere pocket change to Jeff Bezos, the richest man on earth, and the tax doesn’t even come close to making a dent in the massive profits Amazon makes in Seattle. Their threat was instead a shameful act of intimidation by the billionaire class and a blatant attempt to divide Seattle workers.
Yet by halting construction of the tower they did succeed in creating real fear about job losses, including mobilizing ironworkers and other construction workers who are understandably concerned about the potential impact on their livelihoods. Nonetheless a large number of the biggest unions in Seattle support the tax, including the MLK Labor Council, all SEIU locals, and UFCW.
Under capitalism, such threats are all too common, but even when workers bend to them there are no guarantees of stopping job losses. This was shown again and again with Boeing in Seattle, where in spite of record breaking corporate handouts, jobs have been moved out of the area anyway, in search of more exploitable workers elsewhere. Many such threats are also empty ones – during the Fight for $15, predictions of job losses were made repeatedly as well as that the Seattle economy would collapse. While any given threat by big business could be carried through, we cannot allow ourselves to be held hostage by their bullying. In the case of our current struggle, after our movement stood up to Amazon, they ultimately resumed construction of their tower.
As socialists, we are not naive about Amazon’s enormous power or the number of jobs it holds sway over, but we completely reject capitalism’s race to the bottom which seeks to pit housing against jobs, city against city, and worker against worker. Jeff Bezos’ wealth sits on top of the shoulders of tens of thousands of Amazon employees, and it’s those employees who make the company run and create its wealth. Rather than giving in to corporate extortion, we should take big corporations like Amazon into democratic public ownership and workers should run them instead. Trendsetting victories by socialists like the Amazon Tax or passage of a $15 minimum wage are critical first steps, but our movements cannot stop there.
Lessons of the #TaxAmazon Struggle
We should be crystal clear: the driving force behind this victory was the #TaxAmazon movement and ordinary working people, not the Democratic politicians who ultimately voted for the final bill.
Housing activists and socialists first put this issue on the table last fall when we protested and occupied City Hall overnight and brought our fight for affordable housing and homeless services into the November City Council budget hearings. The original big business tax proposal, introduced by Kshama Sawant, was ultimately voted down by a majority of Democratic politicians. In the six months following, our movement continuously escalated the struggle with rallies, marches, a #TaxAmazon Town Hall, and again and again packing City Council chambers to bring maximum pressure to bear on the political establishment. We won because we were ultimately successful in making it politically unviable for city councilmembers to not pass the precedent-setting tax.
Even in the final week before the vote, big business and their purchased politicians like Democratic Seattle Mayor Jenny Durkan furiously worked to water down the legislation. Mayor Durkan put forward a counter proposal, dubbed by housing activists as the Bezos-Durkan deal (after Amazon CEO Bezos and Mayor Durkan) that cut the proposed $75 million tax nearly in half to $40 million a year (after it was previously cut in half from $150 million to $75 million). It added other corporate loopholes such as a “sunset clause” to require a renewal of the tax in five years, and a redirecting of the majority of funding to temporary services – which will include inhumane homeless sweeps – rather than building permanently affordable housing.
As with the $15 minimum wage, what we were able to finally win was based on the strength of our movement, our ability to continue to mobilize broad public support and to politically defeat the arguments of big business. Amazon fought viciously against this tax in its entirety but we have nonetheless wrested tens of millions from CEO Jeff Bezos’ hands to fund affordable housing.
There were many debates over the course of the struggle. Left Democrats and some liberal leaders were initially strongly opposed to calling the proposal an “Amazon Tax” or even talking about Amazon. This would have been a huge mistake – big business wanted to make the tax about iconic local businesses like Dick’s Drive In, and it was our job to keep the focus on the massive profits of the second wealthiest corporation in the world. It was the focus on Amazon that catapulted our struggle into national media, making it a signature issue that city councilmembers knew would be politically costly to oppose.
The confusion extended to small business. From the beginning, Socialist Alternative and Kshama Sawant called for a tax exclusively on big business and argued against any idea of taxing small business. Unfortunately, a section of left Democrats and liberal leaders supported the so-called “skin in the game” proposal to include small business in the tax. Fortunately, this was ultimately defeated once “skin in the game” was exposed for what it was – a maneuver by big business to try to create the appearance of this tax being an attack on small business.
Another debate took place over the question of whether we should accept the cutting of our movement’s demand in half from $150 million to $75 million. Socialist Alternative argued that $150 million was just the beginning of what was needed to address the affordable housing and homelessness crisis, and that it was pocket change to Amazon, a claim that was ironically confirmed by the Chamber of Commerce’s own study that said we need to spend an additional $164 to $214 million a year to remedy the affordable housing crisis.
We said that the movement should keep fighting for the $150 million demand rather than negotiating with ourselves by cutting the demand in half. While left Democrats and liberal leaders argued that if we accepted $75 million that would be the basis of a united proposal acceptable to all, we argued that big business would remain fiercely opposed to the tax in its entirety, and that $75 million would in no way be supportedby Amazon. We predicted it would be only the first concession, and that the political establishment would happily take it and then argue to cut the number even further, as well as insert various corporate loopholes.
This, of course, is what ultimately happened. Socialist Alternative fought till the final hour against every loophole introduced and every attempt to undermine the #AmazonTax, though we also recognize the final result for what it is – a historic victory for social movements.
There was an ongoing debate in the movement over the question of whether we should use disruptive tactics in City Hall, including whether to chant after or even loudly applaud our speakers. We argued that the silencing of our movement would only help big business, and at each stage we took up disruptive tactics in a proportionate way based on the stage of the struggle and balance of forces in City Hall. This included chanting at the evening public hearing on April 23, where we dealt the establishment a major defeat after Councilmember Bagshaw threw the public out of the public hearing and we were able to unite the movement to force the establishment to allow everyone to return and continue public comment.
Debates like these will be ongoing in social movements, and they play a vital role in helping clarify the best tactics and strategies. We should continue to discuss and take on board the lessons of this struggle into future movements.
We are Ready to Fight! Another World is Possible
The victory our movement has won in Seattle has the potential to spread around the country, and in fact it has already begun to do so. A discussion of a “Google Tax” and taxes on Big Tech is taking off in California, including San Francisco, Silicon Valley, Mountain View, Cupertino and East Palo Alto. Meanwhile, corporate media and political establishments around the country are trying to get out ahead and proactively discourage any such developments in their cities.
As with the $15 minimum wage, one of the most important ways to defend our victory is to spread the movement. If the $15 minimum wage we won in 2014 had remain isolated in Seattle, it would likely have been overturned or seriously compromised in the years following. Every gain by workers against the bosses is continually under assault and we must organize to defend and extend those gains. As Kshama Sawant said in her speech after the final vote on the Amazon Tax, referencing the bill’s “sunset clause” loophole: “Capitalism inherently puts a ‘sunset clause’ on any reform that we succeed in winning.”
We must continue the struggle. This system is incapable of providing quality affordable housing for all, and we need to fight for an alternative to the broken private housing market. Just to begin to seriously address the housing crisis, we need rent control and a massive expansion of tens of thousands of units of publicly-owned and operated social housing which is not susceptible to the whims of the market.
And we must fight not only for immediate gains in the present, but for an alternative to the bankrupt system of capitalism. We need to unite our struggles – to tax Amazon and big business, for a $15 minimum wage, to strike for fully funded education, to end police brutality and mass incarceration – to fight for a different kind of society, based on solidarity, equality, and genuine democracy. We have a world to win.
First published on CounterPunch.org.