Amazon scales back in Seattle after city council passes new tax

As Dallas works to lure Amazon to North Texas for a second headquarters location, the company is unhappy with Seattle where its primary headquarters is located.

Seattle passed a new tax to raise money to build affordable housing, and it targets corporations with big revenues like Amazon and Starbucks.

Even though Dallas City Councilman Philip Kingston says he would still love to see Amazon choose Dallas, he did sign onto a letter that praises the Seattle City Council for passing the new tax that has Amazon saying it may rethink its growth there.

As Dallas and other major cities court Amazon's second headquarters with incentives that are thus far undisclosed, Seattle could be a case study for leaders to examine.

“What we see largely on the West Coast is large tech companies that are wonderful to have in your city, but there are negative externalities that arise from having these headquarters in your city,” Kingston said.

Seattle is battling skyrocketing housing prices and homelessness. To combat the problem, the city took the rare step Monday of passing a tax on jobs, with Amazon as the richest target.

But Amazon pushed back, forcing a lower tax rate by halting its expansion plans in Seattle.

"It's disturbing to me that its largest employer would bully it by threatening not to make planned investments in the city,” Kingston said.

The Dallas councilman and leaders from dozens of other cities signed a letter of support for the Seattle Council that says "by threatening Seattle over this tax, Amazon is sending a message to all of our cities: we play by our own rules."

“If Amazon were to come here, I would want to know upfront how it intends to help us with housing and transportation,” Kingston said. “We want our large companies to be partners.”

In business-friendly Texas, University of North Texas Economist Dr. Michael Carroll says cities have to be careful not to lose the golden goose.

"To be taxed on a per head basis is not something you would want as an economic development strategy,” he said. “You're really discouraging job creation if you do it that way.”

Kingston did say he doesn't think Dallas needs a tax like the one Seattle passed to fund affordable housing. He believes that the city's new housing plan will be enough to tackle the Dallas homeless problem.