Seattle’s Socialists Are Now Enemy Number One for Jeff Bezos and Amazon

In 2018, Amazon beat back Seattle’s attempts to tax the corporation. Last week, socialist city council member Kshama Sawant and a working-class movement helped win a veto-proof majority for a new “Amazon tax.” Now it’s time to defend this victory.

During the coronavirus crisis, unemployment has skyrocketed while Amazon owner Jeff Bezos’s fortune has grown to more than $150 billion. (David Ryder / Getty Images)

Last November, Seattle’s socialist city council member Kshama Sawant was up for reelection, and unsurprisingly her opponent’s campaign was backed and bankrolled by Seattle’s economic elite. Amazon, the Seattle-based multi-trillion-dollar corporation owned by the richest man in the world, funneled enormous sums of money to defeat Sawant, and on election night the race was too close to call. But a few days later Sawant, a member of the organization Socialist Alternative, emerged victorious.

The capitalist class of Seattle had good reason to mount an aggressive offensive against Sawant: she campaigned on a promise to raise taxes on large corporations to pay for social programs. Sawant had brought this proposal to the city council in 2018 and in fact managed to get it passed unanimously. But Amazon and other large corporations threatened to move out of Seattle, leading the majority of the city council to reverse their position.

In 2019, Sawant campaigned on the promise to reintroduce the proposal. When she declared victory, she did so before a giant banner that read “Tax Amazon.” Last week, the Seattle City Council passed a new version of Sawant’s “Tax Amazon” proposal.

Sawant and fellow council member Tammy Morales introduced the legislation in the context of the coronavirus pandemic, arguing that the crisis rendered it more necessary than ever. The legislation proposed a tax on the wealthiest 2 percent of Seattle corporations. This tax would rake in $500 million in revenue, $200 million of which would be set aside for emergency cash assistance to working-class households hit hardest by the pandemic-related economic shutdown. The rest of the funds are earmarked for social housing and a Green New Deal jobs program.

Just as it had two years prior, the pearl-clutching began immediately. The Seattle Times editorial board painted the allocation of revenue from the tax for pandemic relief provision as underhanded and conspiratorial. “Under the political cover of the COVID-19 emergency, the council voted 7-2 to push through a long-term tax on the city’s richest employers for paying high-income jobs,” read the editorial.

But the pandemic “has everything to do with capitalism and inequality,” Sawant told Jacobin. During the coronavirus crisis, unemployment has skyrocketed to Great Depression levels while Amazon owner Jeff Bezos’s fortune has grown to more than $150 billion. “The same marginalized communities that were already facing a crisis in terms of skyrocketing rents for example are the ones that are also hardest-hit from coronavirus. People are understanding that the crisis is very much related to the political and economic system.”

But the main thrust of the Seattle Times editorial, and indeed of most of the criticism of the legislation, is the warning that large businesses will retreat to nearby Bellevue or leave the region entirely, taking jobs and tax revenue with them. We’ve heard this before — not just during the earlier iterations of the Amazon tax fight, Sawant says, but stretching back decades with Boeing, the largest private employer in the state of Washington.

“The Boeing corporation has a long history of having extorted corporate handout after corporate handout from the state legislature,” says Sawant. “And I use the word extortion very consciously because the argument has always been from the state legislature, both Democrats and Republicans, that if we don’t give this particular handout to Boeing executives they will take jobs away.” Corporate handouts were consistently forthcoming for decades, Sawant says, but Boeing moved thirteen thousand jobs out of the state anyway.

When corporations threaten to economically punish a region for raising taxes or tightening regulation, capitulation leads to “nothing but a race to the bottom for the working class in cities around the country and around the world.” Sawant views the Fight for $15 movement as an illustration of the principle in reverse.

When Sawant first introduced a fifteen-dollar-an-hour proposal to the Seattle city council, the same arguments were made: it would scare away business and ruin the city’s economy. Not only did this not happen, but Seattle’s Fight for $15 victory started a wave of similar minimum-wage victories across the country — a race to the top.

“Cowing down to corporate bullies is not the answer,” Sawant says. She also points to Amazon’s search for a location for a second corporate headquarters, which kicked off a municipal bidding war for the company’s attention.

Incentivized by $3 billion in state and local tax breaks, Amazon chose Queens. But with leadership from democratic socialist Rep. Alexandria Ocasio-Cortez, and with a strong socialist and progressive ground game, the working class of Queens fought back against the massive expenditure of public money on a project certain to raise rents and displace many existing residents. Amazon ended up creating a corporate campus in Manhattan, without the New York City public handouts originally promised.

The takeaway, Sawant says, is to call their bluff. Large corporations do have the power to withdraw jobs and tax revenue, but appeasement isn’t a long-term strategy for anything other than worsening economic inequality. “Accepting their logic doesn’t help,” Sawant says, “and furthermore, when you don’t accept it you spread the message of working-class confidence, and you can reverse it.”

Last time Seattle’s city council passed a proposal to tax Amazon and other big businesses, the corporate-created climate of fear compelled council members to reverse their decisions. This time Sawant says that they have something valuable that can help stop something similar from happening: a Tax Amazon movement that’s stronger than ever.

“Understanding how we won in the first place is important,” Sawant says. “The reason we won was because we built a powerful, independent movement that was democratically organized.” The Tax Amazon movement was structured around several action conferences, where ordinary working-class Seattleites discussed, debated, and voted on the key elements of the legislation.

These people are ready to spring into action to pressure city council members not to reverse their positions, if a repeat of last time looks likely. And if Amazon and other big businesses decide to bring a repeal referendum, the movement has already collected thirty thousand signatures for a Tax Amazon ballot initiative.

Whether or not a reform that advances the interests of working-class people will actually be implemented is “never about legislative details,” Sawant says. “It’s about power.” And right now, the working class of Seattle is feeling its power.