Amazon Pauses Huge Development Plans in Seattle Over Tax Plan

Seattle had a tax on hours worked by employees in the city starting in 2008, though it was phased out after several years. States typically grant the authority to tax at the local level, and 13 states allow some form of local income tax, according to Bill Fox, a professor at the University of Tennessee who specializes in state and local taxation issues.

Other cities with booming tech economies, like San Francisco, are also seeing housing prices soar because of intense local resistance to allowing more development. In Seattle, people unable to keep up with the costs live in their cars or in tents by the sides of freeways. Those who are better off park recreational vehicles in industrial neighborhoods.

In 2017, the Seattle area had the third largest homeless population in the country after New York and Los Angeles, according to an annual report to Congress by the Department of Housing and Urban Development.

After years of criticism for being disengaged from the civic life of its hometown, Amazon has in recent years attempted to show a more compassionate side in Seattle. It has agreed to allow a homeless shelter for families, Mary’s Place, to occupy space rent-free in another building that it is putting up. That is one of several buildings that Amazon still intends to complete.

Still, even within Amazon itself, there are haves and have-nots. While it is common for employees at its headquarters in Seattle earn $100,000 to $200,000 a year, workers at its fulfillment centers are paid only a tiny fraction of that. The company recently disclosed that median pay at Amazon last year was $28,446.

Amazon’s search for a second headquarters has also fanned criticism of the company, in large part because of the hefty tax incentives many of the 20 finalist locations have offered in an attempt to lure the company.

Mr. O’Brien, the Seattle city council member, described Amazon’s search as shopping around to see which city will give it the best deal.” We need companies that want to locate in a city and are willing to work together,” he said.