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Amazon exec calls Seattle's proposed head tax on big businesses 'super dangerous'

  • A proposed "head tax" would apply to 585 businesses Seattle with $20 million or more in yearly revenue, according to The Seattle Times.
  • Those companies would pay a tax of 26 cents per full-time employee per hour for 2019 and 2020.
  • Amazon cloud chief Andy Jassy said on Wednesday it's "super dangerous" for Seattle to consider taxing companies to offset the effects of gentrification and homelessness.
In this Oct. 11, 2017, photo, large spheres take shape in front of an existing Amazon building and in view of the Space Needle in Seattle.
Elaine Thompson | AP
In this Oct. 11, 2017, photo, large spheres take shape in front of an existing Amazon building and in view of the Space Needle in Seattle.

Amazon Web Services CEO Andy Jassy said on Wednesday it's "super dangerous" for Seattle to consider taxing large companies — and risk dampening job creation — to offset the effects of gentrification and homelessness.

In particular, Jassy was critical of the proposed "head tax," which would apply to 585 businesses with $20 million or more in yearly revenue, according to The Seattle Times. Those companies would pay a tax of 26 cents per full-time employee per hour for 2019 and 2020, which would convert to a 0.7 percent payroll tax after that.

In 2015, Seattle and King County declared a state of emergency over the rising number of homeless people in the area, calling it "just as devastating to thousands as flood or fire." Proponents of the so-called head tax say that the businesses who have benefited from Seattle's economic boom can afford to contribute to programs that mitigate rising rents.

But Jassy told CNBC's "Squawk Alley" on Wednesday that he felt the city would be better off "working with the business community."

"I would say that things like the head tax in Seattle I think are super dangerous for cities to implement. What company is going to want to start — or move to or grow in — a city that penalizes them for hiring full-time employees?" Jassy said.

"These are serious problems in all of our major cities: homelessness, education, there are are a number of them. And they require hard thinking and innovative solutions. But I think cities are so better off working with the business community towards joint solutions, rather than trying to tax them."

While Amazon CEO Jeff Bezos has been criticized for his limited philanthropic giving, Jassy pointed towards Amazon's work with Mary's Place Family Shelter as an example. Amazon's new headquarters include a 47,000 square-foot space donated to Mary's Place, which will hold 65 rooms, enough to shelter 200 homeless people each night. Amazon also donated 25,000 square feet to FareStart, which helps train food service workers.

"We are very involved in the community," said Jassy, who was the highest paid executive at Amazon in 2016, earning $35.6 million.

Amazon reportedly paused construction planning on a new building in Seattle until the vote on the tax, and construction workers have protested the tax. Jassy's comments also come as Amazon reviews bids for its new headquarters — bids which may offer Amazon sizeable tax breaks in other cities.

Jassy said the final location will be announced by the end of the year.

In the meantime, some Seattle lawmakers said they are willing to meet Amazon at the table.

"If Amazon generally wants to engage about how they can be part of the solution, we welcome that conversation," Seattle city council member Mike O'Brien, a sponsor of the tax, told The Seattle Times. "But we need companies that are profitable and making billions of dollars every year to help with the folks that are being forced out of housing and ending up on the street."