Socialist Alternative

After the Amazon Tax Betrayal

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Time for a Left Alliance to Kick Out the Corporate Politicians

In the wake of the Democratic Party’s shameful betrayal over Seattle’s Amazon Tax – a tax on big business to fund affordable housing – housing costs continue to soar off the charts with no solution in sight. Nearly half of the city’s renters are now officially “rent burdened,” while one fifth spend more than half their income on housing.

As in other major cities around the US, the long established link between rising rents and homelessness continues to play out at an ever higher human cost. Seattle now boasts the third worst homelessness crisis in the nation, with 53 people already dying on the streets this year, while the number of homeless public school students went up 22% in just one year.

It was against this background that seven Seattle City Councilmembers voted on June 12 to repeal the tax, capitulating to big business pressure to overturn the ordinance just passed unanimously less than a month earlier. The Seattle Time’s Daniel Beekman called it “a stunning reversal without parallel in Seattle’s recent political history.”

Meanwhile, the wealth of the Emerald City’s business elite continues to grow at breakneck speed. The irony of the world’s richest billionaire, Jeff Bezos, bullying Seattle over a tax of 47 cents an hour (and in the wake of Trump’s massive corporate tax cuts) was not lost on millions of working people here and around the country, nor was it likely meant to be. Amazon’s glittering spheres in Seattle’s upscale South Lake Union neighborhood, where our housing movement held multiple protests, are suggestive of our deeply unequal economic reality: the working people who make this city run are increasingly shut outside, looking in, at the glass house of wealth in Seattle.

We should be clear: this repeal will do absolutely nothing to address any of these ugly realities. While some councilmembers have spoken abstractly about a “Plan B” for affordable housing, none have so far laid out any progressive alternatives. And if Amazon and corporate politicians continue to have their way, we all know what the real “alternative” will be: continuation of the housing crisis and regressive taxation, where taxes and social responsibilities fall overwhelmingly on the backs of ordinary working people.

This capitulation makes things clearer than ever: standing up to big business will require building a political alternative. The progressive and socialist groups who have led Seattle’s housing justice movement should unite for the 2019 elections to run independent left candidates against the four corporate-backed Seattle City Councilmembers who led the council opposition to the tax, namely Harrell, Bagshaw, Juarez and Johnson. At the same time, the disappointing spectacle of left Democrats Herbold and O’Brien also bowing to Amazon’s pressure shows that, to hold candidates accountable, we need to organize a new left alliance, completely independent of corporate cash and the Democratic Party, which has again failed to be a reliable voice for working people.

Working people and socialists in Seattle have the chance to set a national example in showing what is needed.

That potential was already shown in 2017, with the Seattle People’s Party backing Nikkita Oliver and the Democratic Socialists of America (DSA) backing Jon Grant. Building on this, a 2019 left alliance could bring together the forces behind the Amazon Tax including Socialist Alternative, Housing for All and the Transit Riders Union, the DSA, the People’s Party, left trade unions, and others. Linked with a serious movement-building strategy, a left alliance can give our movements a united political voice to challenge the corrupting power of Amazon and big business.

How Did We Get Here?

Seattle’s housing crisis did not begin overnight, but has been decades in the making, long presided over by a Democratic establishment which has worked hand-in-glove with big developers. But the “just let the market work” model will never work, because developers build to maximize profits, which means high-end units, not affordable housing.

In terms of city priorities, we were told that $48 million annually was too much of a cross to bear, yet the city just approved a $1.6 billion convention center project (largely a vanity project for the hotel industry).

Corporate and conservative opponents of the Amazon Tax said “look, the city is spending $61 million a year and the homelessness crisis isn’t solved.This is voodoo math, lacking even a basic sense of the scale of the problem as shown by a recent study which estimated $410 million annually was needed in King County. And this doesn’t include the broader project of providing affordable housing for the working people currently being gentrified out of the city.

And in fact our movement was never calling for the majority of the money to be spent on temporary homeless services. We were calling for the building of permanently affordable, publicly owned housing, not only to address homelessness, but as a step toward a massive expansion of social housing to begin to provide working people a real alternative to the broken private housing market.

Washington has the most regressive tax system in the country, which also did not happen overnight, but from years of Democratic Party capitulation to big business and Republican leaders.

Our movement’s victory on the Amazon Tax stood out as a shining counterexample to decades of corporate tax cuts and attacks on public services, which is no small part of why it received such enormous national (and also international) attention, including the support of Senator Bernie Sanders.

As even the Washington Post noted, the takeaway of the present debacle is that Amazon threw its weight around and got what it wanted. Don’t think for one moment that with this kind of encouragement Amazon executives will stop there.

An Unwinnable Fight?

Some city councilmembers explained their reasons for capitulating on the Amazon Tax as regrettable but necessary because, in the words of Councilmember Lisa Herbold, the referendum launched by the so-called No Tax on Jobs campaign had “unlimited resources” and that defending the tax was “not a winnable battle at this time.”

I point this out with all due respect to Councilmember Herbold, a sincere progressive who (to her credit) did support this tax from the beginning, including last fall when our People’s Budget movement first put forward the demand to tax big business to build affordable housing.

But who said this fight was going to be easy?

It was predictable that big business would launch a referendum effort to overturn the tax – they also attempted this during the $15 minimum wage struggle. From the beginning, Socialist Alternative and I predicted big business would fiercely oppose any such tax. Many of the progressive councilmembers and some community leaders seemed to believe opposition could be neutralized by making drastic concessions – like cutting the original demand of $150 million by half – rather than defeating big business by building a fighting movement.

In the struggle for any serious reform, we should plan for determined big business opposition and setbacks along the way, because the interests of working people and the billionaire class are fundamentally at odds under capitalism. Which is why I’m a socialist.

Was the referendum fight unwinnable? I don’t believe so. Speaking of uphill battles, Queens Berniecrat candidate and DSA member Alexandria Ocasio-Cortez just came from out of nowhere to decisively defeat the fourth-ranking Democrat in the US House, Joe Crowley. She did so with a powerful grassroots campaign and bold left demands like “Medicare for All” and “Abolish ICE,” and in spite of the opposition of the entire establishment and being outspent 10 to 1.

But even if we assume a likely referendum defeat we need to recognize that serious progress rarely takes place in a straight line. The victory on marriage equality was decades in the making and suffered many setbacks. The massive defeat represented by California Proposition 8 became a rallying cry which invigorated a movement determined to finally win marriage equality, which it did several years later.

Last summer, Minneapolis became the first Midwest city to pass a $15 minimum wage. But getting there involved major setbacks: first the narrow defeat of Ty Moore’s 2013 socialist city council campaign which put $15 on the map, then the killing of a ballot measure by the Minneapolis City Council. It was only with fighting tactics and a powerful grassroots campaign that we were finally able to pass $15/hr last year during Ginger Jentzen’s groundbreaking Socialist Alternative City Council campaign.

No one disputes our Tax Amazon movement had our work cut out for us. But I have no doubt that we could have built a serious citywide campaign to win over tens of thousands of people, and lead the way towards building the broader movement to tax Big Tech and Big Business nationally.

In spite of initial unfavorable polling in the city, we were off to an auspicious start. Millions of workers around the country had already been inspired by our example, and efforts were springing up elsewhere. In spite of the repeal, the Google Tax being discussed in Silicon Valley is still going ahead onto the ballot this November. Now with their repeal vote, the seven Democrats in City Hall have sent a mixed or even discouraging message – just as Amazon executives want it.

In Seattle, Socialist Alternative was already preparing the launch of a massive defense campaign to defeat the referendum, and was in active discussions with other progressive groups to do just that.

We have no guarantees that if we fight we will win in any given instance. But the most discouraging and damaging thing of all is to accept defeat without even putting up a fight.

A Turning Point in Seattle Politics

We need to recognize that with this capitulation by the Democrats, working people have lost more than just a single battle. This has given enormous encouragement to big business as well as the right populist groups that have sprung up recently in Seattle, such as Speak Out Seattle and SAFE Seattle. Many members of these groups, with their anti-homeless, anti-poor rhetoric and right wing arguments, were no doubt already encouraged by the ascendency of Trump and right populism nationally, though certainly a section of their members also identify as Democrats. After the vote, they gathered together at a restaurant owned by former pro-corporate City Council candidate Sara Nelson to celebrate their victory and plan their next steps.

Tim Ceis, a general consultant to the highly dishonest and shamefully anti-poor “No Tax on Jobs Campaign,” confirmed this perspective with his comments recently reported in The Atlantic: “What do we want? A new city council.”

Next year will see the most polarized Seattle City Council election in many years, whether we like it or not, but we should be clear that we can’t back down from this fight either. The result of capitulation by working people and the left is not peace, but further growth of the right and corporate politics.

A Tax on Jobs?

The Amazon Tax was the opposite of a tax on jobs or working people. It was a long overdue tax on wealthy businesses, specifically the biggest 3% of them in Seattle. Amazon and Starbucks and Vulcan know this, and that is why they are so fiercely opposed to this example being set.

In fact, the Amazon Tax would have created hundreds or thousands of jobs, injecting $50 million annually into construction and social services, with many other jobs being created in the economic ripple effects.

Would big business have cut wages or jobs or otherwise made workers pay for the (modest) Amazon Tax? Speaking as a PhD economist and socialist, I can tell you that’s not so easy for business or even sensible. First of all this tax was a drop in the bucket to Amazon, Starbucks and the rest, and they’d already saved far more money through Trump’s corporate tax cuts last year than the tax would have cost them. Also, under this system big business pays wages the market forces them to pay – they would cut workers wages right now they could. They would move jobs now if they found a more profitable spot worthy of relocation costs. Amazon is here because there is a large pool of highly skilled workers in Seattle, which they have used to their advantage to become the second wealthiest corporation in the world. They’ll move jobs if and when it suits their bottom line, independent of modest taxes like this one.

But we should be clear that any given threat could be carried through by big business under capitalism. Amazon could have halted it’s tower construction and taken those 7,000 jobs away, even though it would have cost them a huge sum of money, in order to make an example of Seattle. Of course, in the end they resumed construction – most such threats are empty threats.

The Boeing example shows that capitulation is no solution. Two of the biggest corporate handouts in US history were given by Washington State to Boeing executives, but they’ve moved the jobs anyway.

That’s why it is a losing strategy to capitulate to corporate bullying. Doing so only further fuels capitalism’s race to the bottom, allowing big business to pit city against city, and worker against worker.

Mass Corporate Misinformation Campaign

An enormous amount of confusion about the Amazon Tax was spread in the corporate media, while the so-called No Tax on Jobs campaign collected signatures on a highly dishonest (as well as shamefully anti-poor and anti-homeless) basis. Among the many outright lies, signature gatherers said the tax was on employees not employers.

There can be no doubt the corporate media and referendum campaign succeeded in creating temporary confusion, as shown by a May 13 poll, with 54% of people surveyed opposing the tax.

But we also have to recognize that there is broad general support for taxing big business and the rich in the US. Is Seattle somehow less progressive than the rest of the country on this issue? I don’t think so. What we’ve seen is a mass corporate misinformation campaign, which needed to be answered at the doors and on the streets by a grassroots movement.

An Alternative to Corporate Politics

Working people need to draw our own line in the sand. But to do so, we will need to build a stronger movement. We must use the coming months to prepare the launch of a broad progressive alliance to fight for affordable housing and replace the establishment politicians in Seattle City Hall.

We need a new mass party in the US that will fight unambiguously for working people and the oppressed, and which accepts no corporate money.  While the forces do not yet exist to launch such a party nationally, the progressive and socialist groups in Seattle are well positioned to offer a local model of what is needed. The time has come to begin building a left alliance in Seattle, linked to building the power of our social movements. If we get organized, the 2019 city elections offers us an opportunity to make an important breakthrough and begin a systematic struggle to wrest control of our city from the hands of big business, and to fight for a truly transformative policy agenda.

Lastly, we’re not conceding anything on the Amazon Tax – we continue to demand the promised “Plan B” for affordable housing and homelessness services. In this fall’s Seattle budget, we’ll fight for a minimum of $50 million annually, as a basic starting point, to be funded this year and going forward, until we can pass a larger and permanent big business tax. As before, the way to win is by building a powerful grassroots campaign. We’ll be campaigning not only for a big business tax but also more broadly for a genuine “People’s Budget.” The budget vote happens in the fall, but the fight starts now.

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