Councilmember Kshama Sawant unveils big business tax proposal

Good morning, everyone.

Welcome.

Thanks to all the activists and community members who are here today for this historic unveiling of our movement's tax Amazon legislation proposal.

And thank you to the members of the media.

This morning, we're going to be detailing our long-awaited proposal on taxing Amazon and big business in this city to fund a major expansion of social housing and a Green New Deal.

After I finish with the presentation, I'm happy to take your questions.

All of this discussion highlights the backdrop of the unprecedented crisis in our city.

We know that 46% of Seattle's renters are officially rent burdened, and one quarter of all homeowners, especially elderly living on fixed incomes and struggling with rising property taxes, which are also regressive taxes, are also at risk of being pushed out.

The crisis is so widespread and acute that it is not only poor people, the most marginalized, who are obviously the first hit by the crisis, and communities of color, immigrants, and LGBTQ people, but even tech workers are feeling the vice grip of a private housing market that has failed working people, with average rents in Seattle up 69% since 2010. We've seen what was originally sponsored by the Chamber of Commerce, and they didn't like the results, McKinsey and Company's report, which demonstrated the stark scope of this crisis.

This study, which was recently updated, reveals that we need, our region, King County, needs between 450 million and 1.1 billion each year, each year for the next 10 years.

And this is, again, in the background of a for-profit market that we know is not going to work and is not going to fill the need, because despite a construction boom, we are seeing this historic crisis.

As a Socialist City Council member elected by and accountable to working people, it is my duty to put forward, in coordination with our movement, bold policy proposals to match the scale of the problem and to mobilize our communities to win them.

We know big business isn't paying their fair share.

Washington is the most regressive tax system in the nation.

I think the picture says a thousand words.

And this situation has persisted for decades.

We know we need to shift this situation.

And this proposal, while it won't be able to address all of the problems in our state, will begin to shift that.

Our press conference is also happening in the wake of the historic victory that working people won last year despite everything thrown at us by big business and the Chamber of Commerce and Jeff Bezos himself attempting to carry out a corporate takeover of City Hall.

We are still here, our movement is still here, and we are not going anywhere.

The voters have spoken loud and clear that big business needs to pay its fair share.

My re-election campaign was fought on the demand to tax Amazon and big business, in addition to rent control and a Green New Deal.

That is why we are unveiling this proposal.

This will be a big business tax.

It's a tax on corporate payroll, meaning it is not a tax on workers, it is not a tax on jobs, and it is not a tax on small businesses.

It is not a head tax.

It is a tax on Amazon and the other businesses that form the top 3% of payroll in our city.

So who pays this tax?

The top 3% of the corporations by payroll.

And let's be clear, this is not a tax that will be paid by workers.

This will be a tax paid by the owners of the corporation, meaning this is a tax on the wealthy.

It's nothing but a tax on the wealthy because it is only falling on the largest businesses.

Out of the total businesses in our city, only about 825, which form this top 3% roughly, will be subject to the tax.

And those are the businesses with $7 million or greater in payroll.

This means that the rest of the companies in the city, meaning about 22,200 companies, will not be paying the tax.

I think this is a real epitome of what a progressive tax means.

Besides the companies with those under $7 million payroll that are already being excluded from the tax, the tax would also exclude all nonprofit organizations and cooperatives.

It would exclude all grocery stores.

And it would exclude all government and educational employers.

So let's look at a little more in detail about what we will be doing, who will be paying the tax.

Sorry.

We're going to be raising $300 million each year on this basis, on making sure that it's only the top 3% of corporations by corporate payroll.

We can raise $300 million each year to fund social housing and services and a Green New Deal, and I'll come to that in a second, with a tax rate of 1.7% on corporate payroll.

The average company paying the tax has approximately $113 million in annual gross receipts, just to give you a sense of how big these companies are.

Amazon is one of them, but Amazon is hardly the only one.

And these companies in aggregate have about $90 billion in annual revenue for their Seattle business.

and they will pay $300 million per year.

In other words, what this graph shows is that what these companies, these largest businesses, what they will be paying amounts only to 0.3% of their revenue through this tax.

I think any rational person, if they're being honest will have to agree that it is more than reasonable that the biggest and richest companies in our city should pay at least 0.3% of their revenue to do their part to address our city's crushing housing crisis.

Am I right?

The $300 million tax would also be similar to a measure that was overwhelmingly adopted by San Francisco voters in 2018, Prop C, if you might remember, which taxes big businesses there to fund housing and services.

So we know that if San Francisco can do it, Seattle can as well.

In this legislation, we are allocating 75% of the revenue or $225 million per year on social housing and related services.

To be clear, social housing is housing for working people that will be union built, publicly owned or controlled, permanently affordable, energy efficient, and green.

It will be built to the standards of our Green New Deal proposal, including all electric and fossil fuel-free, dedicated outdoor air systems with heat recovery for ventilation, low-flow fixtures, Energy Star appliances, all LED lighting, sustainably sourced wood or cross-laminated timber buildings instead of concrete and steel, solar panels, green roofs.

I'm not an expert in all of these Green New Deal technologies.

I'm an expert.

I'm not an environmental...

I mean, I'm an economist, not a Green New Deal expert.

But our office is working closely with a team of environmental experts, including 350 Seattle, on ensuring that this housing meets our commitment to the Green New Deal.

And this proposal has been developed with a lot of we need to make sure that we get- input from these groups so that we make sure we do this right because we're setting a historical marker.

The housing must also support working people through jobs and apprenticeships therefore it will be built with the best union standards that have been developed for community workforce agreements.

Which means priority higher for local workers young people, especially from racially and economically marginalized communities in our city, and of course, prevailing union wages.

We will also ensure that contracting opportunities are available to minority and women-owned businesses.

This will be working-class housing that will be available broadly, it will be affordable, rents to no more than 3% of household income as a whole, and they will not be going up.

Rents will not be going up more than the rate of inflation.

Unlike the private housing market, we can have rent-controlled homes through publicly owned or controlled housing.

We do have publicly owned or controlled housing programs today, but they are too minimal and they're focused only, unfortunately, because they have so few revenues on very low-income people, including people experiencing homelessness.

We, of course, have that important component in our proposed legislation, but we also want to go beyond that because we know Through statistics and economic studies that the pipeline to homelessness, you know starts with a myriad of factors But one big factor is skyrocketing rent and then it spirals downward you have your rent going up by 50% or 100% you have some sort of medical Calamity or you lose your job and then you you know, you're you're couchsurfing and the next thing you know, you're on the streets So we want to arrest that pipeline to homelessness by making sure that this city begins to have what we call social housing, which is affordable housing that is publicly owned, that is permanently available for our working families in this city.

We can build this housing for a wide range of incomes because we are putting forward an ambitious proposal of $300 million.

But I will also note that the $300 million is less than the lower end of the estimate from McKinsey.

And McKinsey is not a hotbed of socialist politics.

So this is both not the maximum that we need, and at the same time, it is ambitious compared to where we are today.

So we think this is an important number that we can build a movement around.

And the new chart will show that we can build upwards of 8,000 new affordable homes in the first 10 years, or about 800 affordable homes per year.

And I want to be crystal clear, this proposal is not and will not be in lieu of the Seattle Housing Levy.

We support the Seattle Housing Levy and we, our movement, will be fighting to renew that levy.

Am I right?

This will be in addition to the housing levy.

I want to note that we have made conservative assumptions in calculating the number of homes that can be built, and the actual number of homes could end up higher, because we're just beginning the research on this, and we prefer, rather than giving you the outside limit, give you a conservative estimate of what could be done with this amount of revenues.

Our tax on Amazon and big business will increase by two and a half times the current rate of affordable housing construction in the city.

We know it's not enough, but we know it will also make a big dent in the crisis.

In addition to housing for working families as a whole, we need to make sure that we provide permanent supportive housing to those of us who are the most vulnerable, experiencing chronic homelessness, mental illness, and other issues that are social problems that we all need to address collectively.

This is the humane approach and also happens to be the logical economic approach.

We know that housing first works.

For people on the streets experiencing health care or substance abuse issues, we know, and our statistics dramatically show, that the first thing to do to help them stabilize their lives is to provide housing, stable housing, so that they are not homeless.

There are about 2,300 people experiencing chronic homelessness in King County.

About 16,000 of them, sorry, 1,600 of them are in Seattle.

Because of their high needs, they cycle through healthcare systems, the courts, the jails, and the social service centers.

And all of that costs public revenues.

And I make this argument and I show this chart somewhat reluctantly because this is a neoliberal argument.

But my point is that even if you are part of the safe Seattle kind of logic, where you are not worried about the inhumanity of homelessness, but more about the money that it costs, well then, even from that standpoint, this is a sensible approach.

So if you don't want your tax revenues to be used in a solution that never works and has never proven to work, which is the cycling of human beings through social service, jails, and courts, then this is the rational approach.

Estimates from City Council Central staff show that unhoused, the cost of supporting our most vulnerable community members is close to $83 million.

Housed with permanent supportive housing, we will save nearly $37 million every year.

Housing works.

We will also build in services to the new homes like child care centers and community meeting places.

We have received input from many community members that child care is such a pressing issue that not only do we need affordable child care centers, but we need easily accessible child care centers.

And so it is a completely sensible approach to have child care centers built into many of the buildings that will go up through this proposal.

In this legislation, we are allocating the remaining 25%, which would be $75 million per year, to retrofit existing Seattle homes to electric.

Currently, there are about 162,000 homes in Seattle that are powered by fossil fuels, 18,000 of them by oil and 144,000 of them by fracked gas.

The oil and gas used to heat our homes is responsible for 480,909 metric tons of greenhouse gas pollution every year, according to the Seattle Community Greenhouse Gas Inventory Emissions.

emissions inventory.

This represents around 15% of our city's overall climate pollution.

With this 75 million investment in retrofitting homes every year, we can convert 47,000 of Seattle's homes in the next 10 years.

This will, again, not fully address the problem, but imagine what a huge dent this will make in our greenhouse gas emissions.

It would represent significant progress towards the goal of electrifying homes and meeting our city's commitment to the Green New Deal.

Last year, as you know, the city council, then city council, committed to Green New Deal goals, and this was one of the key goals.

It would also be retrofitting plus building homes, new homes.

All of this will be a huge jobs program.

I think this is an important highlight of this overall proposal that cannot be missed.

Building homes will require workers to build them.

Maintaining the homes will require workers to maintain them.

But this is not the exploitative for-profit market.

This will be a huge generation of public sector unionized living wage jobs, and there will be thousands of those jobs.

In addition to building and maintaining the homes, the retrofitting program would also create jobs because that would require, again, I'm not an expert, but I will go out on a limb and say that it will require electricians, carpenters, plumbers, painters, workers in the design and logistics field, and many more.

We know there are many people in our city and in our region who are in dire need of living wage jobs that provides them economic stability and the right to a union.

We are in the process of determining how many jobs this would represent, but obviously it would be substantial.

We are also going to include a strong community oversight board in the legislation to make sure that community members elected by their peers are closely involved in making sure we are building the social housing we need and meeting the Green New Deal goals we have laid out today.

Because we know that under capitalism, as hard as it is to win a reform, that is never going to be enough.

Because as soon as we win the reform, after they have done everything to stop us, then the next step is they will try to snatch it away from us.

they will try to undermine it by appointing, by attempting to appoint big business leaders and others on such boards.

We have to absolutely make sure that in our legislation any kind of oversight body like a board or a commission will be controlled by the community itself.

As I noted, we support all efforts to raise progressive revenue from big business for affordable housing and services.

I mean, we're here after having spent over two years fighting for some version of the Amazon tax to tax big business to begin addressing this crisis.

We fought for it in 2018. We won a unanimous vote because of the strength of the movement.

And then they made a backroom deal, and seven of the nine council members repealed it.

And then they went after us in the elections last year.

So we are very clear that we are very determined that the big business will pay its fair share.

But given our history, we are absolutely supportive of any other proposal that will be brought forward, either at the city or the county or the state level, to raise progressive revenues.

So as such, we stand in full solidarity with efforts like House Bill 2907 to raise taxes on big business.

However, we also want to make another thing clear.

We are absolutely opposed to the so-called preemption or a ban on taxation.

We are opposed to the attempt to create a tax shelter for Amazon and other big businesses, which they are talking about right now.

Because if that happens, we will not be able to do what we have just put forward today.

So we say no preemption, no ban on taxing big business.

And I would welcome the media to look at the letter that I have just sent to Representative Macri, urging her, as a progressive Democrat and as the prime sponsor of the legislation, to come out publicly against preemption.

We need all progressive Democrats at the state legislature to stand publicly against preemption and say that they will not accept any ban on taxing big business.

I want to also make clear the House bill will not raise any taxes on its own.

What it would do, if passed without preemption, is it would create an authority for King County to pass taxes to the maximum limit of $121 million, which means that if the House bill passes without any state ban, then King County Council has to decide, are they going to actually take the maximum avenue and then pass 121?

If that happens, then, you know, this is all the best case scenario that I'm telling you.

And in the best case scenario, as Rich Smith from The Stranger reported, it would still be about 10 to 25 percent of our region's needs, which means that even if the best-case scenario of the House bill passed, we would still be in dire need of additional big business taxes.

We are absolutely opposed to any kind of preemption, and I would like to echo King County Council Member Girmay Zahilay, who said that if this bill comes with preemption, it's a no.

And I have, you know, I can answer many other questions that media might have about this legislation, but I will stop there and see what questions you might have.

Is there any concern that this tax will chase out or prevent other businesses from coming in, other large corporations from coming in that would essentially bring jobs to our area?

You know, Washington State's history is a sorry litany of big business making threats decade after decade that if you didn't give them this or that handout, they would take away jobs.

Three days after I was first elected in 2013, I was with Boeing workers at Westlake on a rainy and winter evening, rallying with them against what was to become a historic sellout of the Boeing workers when the state legislature and the Democratic governor gave what became the single largest corporate handout in US history, nearly $9 billion.

And that was done because they were afraid of Boeing's threats that it would take away jobs.

What happened after that?

Boeing took away thousands of jobs.

The same thing we've seen with Amazon.

They pushed for a repeal.

They got the repeal in 2018. And then we heard that Amazon is moving jobs anyway.

I think the definition of insanity, as we know, is doing the same thing over and over again that doesn't work and expecting different results.

That is why we have to do what we know works for us as ordinary people, which is something like the fight for $15 an hour, where we had the same threats.

that it would be nothing less than lights out in Seattle.

And yet, none of those dire threats came into being.

Instead, what happened was 22 cities and states won $15 an hour.

We have expanded the momentum for a federal $15 an hour.

So I am 100% confident that only good things for us will come.

I mean, I don't expect Jeff Bezos to think of this as a good thing, but that's where it matters what side you're on.

This is not a neutral issue.

I think what we need is a phenomenal and historic movement of ordinary people because it is a failed pursuit to think that in the context of capitalism, where big business has diametrically opposed interest to ordinary people, that someday, someday in the future, big business will be on our side.

Well, they have shown us over and over and over and over again that they are not on our side.

So we have to prepare ourselves to build a movement that can win despite their opposition.

And nothing's stopping the billionaires from doing the right thing and saying, you know what?

We support your legislation.

How can we help you?

The door is open.

but we are not, the door is open for them, but we are not going to hold our breath.

I think we saw from the repeal in 2018 that it won't be wise for the movement to put its trust in even those who call themselves progressive elected officials.

Just on Monday, we saw the incredible effort that many of the council members put.

And there are no Republicans on this council.

There's eight Democrats and one socialist.

And yet, it was a breathtaking display of how they will try to eke out every corporate loophole that they can to protect corporate landlords rather than ordinary people.

It was a historic victory that we won the winter evictions legislation, but the display of corporate loopholes shows that ordinary people cannot just put their faith in, you know, you cannot put your eggs in one basket, so we have to have a two-pronged approach.

And in fact, one of the strategic reasons that we won the historic $15 victory in 2014 was because the movement was fully prepared to launch a ballot initiative if the council failed to act.

Shama, 300 million versus 121 million.

Obviously, the 121 is countywide.

If we're thinking about the homelessness crisis, what cannot be accomplished with 121?

Well, 121 and 300, in fact, they are both taken individually less than the lower end of the McKinsey estimates, which say that we need anywhere between 450 million to a billion dollars every year.

So you can imagine what cannot be accomplished.

What cannot be accomplished is fully addressing the deep crisis that has been inflicted on the majority of people in this city and region.

So we have to fight for every dollar of big business taxation we can get until big business fully pays its fair share.

As simple as that.

I don't know.

Oh, I'm sorry, it's the winter evictions.

The winter evictions, yes.

Actually, Hannah, I'm glad you brought it up because look at what the politicians do.

We start fighting for winter evictions moratorium and they put a bill that will ban winter evictions moratorium.

There was a movement in the 1970s to fight for rent control.

They put a ban on rent control in 1981. Our tax Amazon movement is gaining real momentum.

They attempt to put a ban on big business taxation at the state level.

There is a pattern here.

These are not isolated occurrences.

This is what it means to have corporate politics and to have two parties that both, despite their differences, primarily serve corporate and wealthy interests.

This is why even many progressive Democrats at the state level haven't come out openly against preemption, because they are being held to the discipline of their party's establishment, and that is why I especially appreciate State Senator Joe Wynn publicly saying that he would be opposing preemption.

But what all this points to is two things.

One, we are going to need a fighting movement, a movement that is prepared to carry out peaceful civil disobedience, even if necessary, to prevent this eviction, I mean, preemption or state ban from happening.

But it also proves the urgent need for working people to have our own party because the democratic establishment is not on our side.

We're not asking we are going to be demanding and we're going to be building a movement to win At the same time if you look at how we fought and fought for and won the $15 minimum wage You could make the completely legitimate argument that $15 is not enough.

We need more we need 25 30 but when you are in the context of these, you know, it's a David versus Goliath fight where you have all these big business interests, the political establishment, even liberal politicians against you, and it forces you to have to build a movement of ordinary people who have to make enormous sacrifices, put their personal lives aside to build a movement.

The demands that we build our movement around have to be a combination of boldness and winnability.

And we believe, as a movement, based on many, many discussions with progressive labor unions, community organizations, renters' rights organizations, social service providers, with all of them, that a general consensus that is emerging is that we should go for $300 million.

I cannot win this on my own.

We are going to have to have a movement, and a movement needs unity.

And that's why 300.

Yes, I have asked several council members and we will be continuing those conversations.

Unfortunately, they're not here today, but I don't think we should conclude anything from that.

I think this is just the beginning of the discussion.

We will have City Council Central staff providing a fully-fledged legislation based on this framework in the next couple of weeks, and sharing that with council members and with the media.

Do you have legislation right now?

Well, this is the legislation, but writing it will take time.

The bulk of the time that was spent was coming up with these numbers.

It's not easy, I can tell you.

And actually, on that note, I really, really wanted to congratulate and thank City Council Central Staff, the Director Kirsten Aristead is right here, and Dan Eder and many others who are not right here, who put a tremendous effort.

I can tell you this is a day and night kind of effort.

It's not easy.

I mean, all of these charts look really fancy, but a lot of work went behind it, and to come up with these estimates is not easy.

And also, another thing is, I believe tomorrow my staff will be giving a briefing to the staff members of other offices, and they are welcome to come to it.

On the preemption question, it's not in the bill yet.

Does making this proposal now, are you concerned that that gives people who might be opposed to this more reason to push for preemption?

Legislators, please.

Well, I think the way it works, and this is, again, it's a question of political strategy, the way it works is that those politicians who are going to bring in preemption are already bought out by big business.

So nothing I do or don't do is going to influence them.

On the flip side, bringing this proposal forward and continuing to fight to build a movement is precisely what will put pressure on the Democratic state legislators to not bring this forward because it has to be clear to them.

that there are only two choices as far as our movement and their voters are concerned.

It's either you fight hard against preemption and stand with us, or you pay the political price for not doing the right thing.

Because, let me remind you, when we talk about the state ban, we are not talking about this or that bill where they carved out this or that corporate loophole.

We are talking about what could be, if the ban passes, a historic sellout of the working people all the way from Seattle to Spokane.

So this is huge, and we will hold them accountable.

I do have something to say about that.

I don't believe it's an opportunity, but I'm happy to do that.

But I want to see if there are any other questions on the legislation itself.

Do you believe your re-election and the election of candidates to Amazon and Post give you a mandate to do this?

Do you think the residents of Seattle are pushing for this because of your election?

I have no doubt that we have the mandate, but more importantly, elected representatives who got elected on a progressive agenda have a responsibility to deliver.

They have a responsibility to deliver.

And as I said, specifically my reelection campaign, we campaigned very clearly and visibly on taxing Amazon and big business, on citywide rent control free of loopholes, and on the Green New Deal.

We didn't win by lying to the voters about where we stood.

We won by speaking the truth and winning voters over despite everything that was against us, all the attacks against us.

So the election, if it meant anything, what it meant was a referendum on who should run this city, big business or working people.

It looks like, oh, go ahead.

She can do it.

Go ahead, go ahead.

Sorry.

The Tax Poster Reveal in 2018 was for housing and homelessness services.

You mentioned permanent supportive housing.

Would any of this money go towards other services for people who are homeless?

The problem with the status quo is that we have so many needs.

I mean, we're unfortunately spoiled for choices because so much of our society's needs are unfunded and so we cannot pretend that all of the ills of society will be fixed with one bill, but it will make a huge dent.

And again, with community conversations with many organizations, it is very clear, again, another sort of consensus that's emerging is that we need a housing-first approach.

And that is why the primary goal of this bill is to fund housing, including permanent supportive housing.

But there is no question, our whole myriad of services are deeply unfunded, which is why we are against the state bank, because we need to raise more taxes on big business.

It's looking more and more likely that Nicole Macri's bill won't pass unless it does have preemption language added to it.

Is that okay with you?

That it dies if it doesn't get that language?

And that the King County money doesn't end up happening?

So just to be clear again, the House bill, if it does pass, you know, I'll address the question of preemption in a second.

will only create an authority for King County to raise taxes up to a maximum of $121 million.

Then, if that happens, it will be up to the King County Council to pass some sort of tax under that authority.

And so again, this whole case for doing this kind of political gaslighting on ordinary people and saying you need to support this even if there's a ban because we will get 121 million dollars.

It's a house of cards.

We don't know if King County Council is going to pass any tax and we don't know if they will pass 121 million dollars.

What we do know is that even if the best case of 121 million dollars passes, it will not be enough.

It will be grossly inadequate to win what we need for our city, which is why absolutely any bill that contains preemption is a no.

Just to clarify on the services question, the signs say fund housing and services, so is it...

Well, what we mean, what we mean, well, services are a component of it, but they're very specifically through permanent supportive housing and the services that we'll provide to retrofit homes, existing homes, and so on.

So, there are a lot of other services that need to be funded.

Council member, back to the original question.

As I said- No, I mean, this was front page news all over.

This was front page news all over the last couple of days.

Do you believe that you violated state and local laws with the launching of the tax havens on campaign maps, ethics, and elections in the legislature?

I will address that question as soon as it's clear to me that there are no other questions on the legislation.

Hearing none.

So I have a statement that I've already released, and I believe you all have already received it, but we have printed copies of that for you.

The idea that big business can make a backroom deal with Olympia legislators to block all big business taxes in the future and that we are not allowed to openly build a movement to stop them is ludicrous and we don't accept that.

I am disappointed to see this complaint filed against my office and our movement.

We have been preparing for this legislation, as you know, For many weeks, now at this point over two months, since we won our re-election in December, at the same time, we have a two-pronged approach from the movement, and we know that we need a movement out on the streets in addition to our efforts in City Hall.

And three weeks ago, my staff reached out to Wayne Barnett at the Seattle Ethics and Elections Commission with questions about how to navigate this work.

And then we were surprised to hear his interpretation of what counts as work towards ballot initiative.

This is honestly news to us.

And so as I've said in my statement that you all have access to, I don't accept that we knowingly made any errors.

and violated ethics because our understanding was that as long as we are talking about a movement that is building for efforts outside City Hall and no ballot initiative has actually been drafted or filed, which it hasn't as far as I know, that it is completely fair game for City Council to use its resources.

And I would also say, I don't accept that I cannot use my office resources to help build a movement.

That is exactly what I'm supposed to be doing.

So did he advise you then that you could post those links?

No, we sought his advice because we wanted to make sure that going forward, once the ballot initiative, if it is filed, that we were doing the right thing.

But what he gave us was his interpretation, which was completely news to us.

And I look forward to resolving this question with the Ethics Commission.

But I don't have any additional comments.

You have my statement.

Great.

That's all the time we have.

Thank you.