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Seattle approves tax on businesses like Amazon, Starbucks to fight homelessness

SEATTLE -- After weeks of tense and raucous meetings, the Seattle City Council has approved a tax on the city's large businesses such as Amazon and Starbucks to raise money to fight homelessness.

The council on Monday unanimously backed a compromise tax plan that will charge large businesses about $275 per full-time worker a year. It's lower than the $500-per-worker tax initially proposed. The tax would begin in 2019 and raise about $48 million a year to pay for affordable housing and homeless services. 

The debate over who should pay to solve a housing crisis exacerbated by Seattle's rapid economic growth comes amid skyrocketing rents and rising homelessness. The Seattle region had the third-highest number of homeless people in the U.S. and saw 169 homeless deaths in 2017.   

Some council members acknowledged it wasn't enough to address urgent housing needs but conceded they couldn't get the six votes needed to override a potential veto by the mayor. 

Other cities have implemented similar taxes, but critics say Seattle's tax could threaten the booming local economy and drive away jobs.

Supporters say businesses that have benefited from Seattle's prosperity and contributed to growing income inequality should pay.

Councilmembers who advanced a proposal out of committee on a 5-4 vote Friday want businesses with more than $20 million in gross revenues, such as Amazon and Starbucks, to pay roughly $500 a year per full-time worker.