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Amazon CEO Jeff Bezos in Seattle. Photo: Jason Redmond/AFP/Getty Images

After intense political pressure from Amazon, Seattle repealed a city tax on big businesses on Tuesday, the AP reports. The Seattle City Council passed the tax last month to help mitigate the city’s staggering homelessness and affordable housing crises, per The Hill.

Why it matters: The decision highlights the political power that Amazon's massive economic output can exert over its home city. As the tech giant searches for a home for its HQ2 project, the messy showdown might make cities in the running wary of the potential consequences of welcoming a powerful new neighbor.

The details: Beginning next year, Seattle's tax would have levied a $275-per-employee tax on for-profit companies making revenue of $20 million or more in an effort to fund programs intended to help the city’s homeless.

  • Advocates of the tax said Amazon and Starbucks have contributed to the city’s homelessness problem by massively driving up rental and home prices.
  • The originally proposed tax was $500-per-employee. It was eventually lowered to avoid a veto by the mayor — ironically, due to fears that Amazon might push back.
  • An Amazon VP commented publicly last month after the tax passed: "We remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.”

By the numbers: The city council planned on the tax raising $47 million for the city.

  • Yes, but: A study by the Chamber of Commerce found that the tax would cost Seattle more than 10,000 jobs and $3.5 billion in economic output — and a poll last month from Seattle TV station KIRO found that 54% of Seattle voters opposed the tax while 38% favored it.
  • Due to the tax, Amazon paused projects that could have employed 7,000 more people in Seattle and considered subleasing its office space within city limits.
  • An Amazon-led group of businesses had raised $200,000 over a few weeks in order to fund a political push for a referendum to repeal the tax during this fall's election.

The big picture: This is not the first time Amazon has exercised political know-how. Amazon increased its federal lobbying efforts and staffing last year. And it's not alone among tech giants — big tech set lobbying records last year.

What's next: One Table, a task force created last year to find an alternative to the homelessness tax, is "the only regional approach to homelessness in play," according to the Seattle Times.

  • However, it also notes that the effort "stalled during the head-tax debate and another meeting of the group isn’t even scheduled."
  • Seattle city officials' announcement about considering the repeal: "The City remains committed to building solutions that bring businesses, labor, philanthropy, neighborhoods and communities to the table. ... The state and region must be full partners and contribute to the solutions, including working for progressive revenue sources. Seattle taxpayers cannot continue to shoulder the majority of costs, and impacts."
  • The VP of Amazon, Drew Herdener said in a statement that the repeal "is the right decision for the region’s economic prosperity" and added that Amazon is "deeply committed to being part of the solution to end homelessness in Seattle and will continue to invest in local nonprofits like Mary’s Place and FareStart that are making a difference on this important issue."

Go deeper: Big Tech reckons with calls to be a better neighbor.

Go deeper

Resurrecting Martin Luther King's office

King points to Selma, Alabama on a map at his Southern Christian Leadership Conference office in Atlanta in January 1965. Photo: Bettmann/Getty Contributor

Efforts to save the office where Dr. Martin Luther King, Jr., planned some of the most important moments of the civil rights movement are hitting roadblocks amid a political stalemate.

Why it matters: The U.S. Park Service needs to OK agreements so a developer restoring the historic Prince Hall Masonic Lodge in Atlanta — which once housed King's Southern Christian Leadership Conference — can tap into private funding and begin work.

Off the Rails

Episode 4: Trump turns on Barr

Photo illustration: Eniola Odetunde/Axios. Photos: Drew Angerer, Pool/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 4: Trump torches what is arguably the most consequential relationship in his Cabinet.

Attorney General Bill Barr stood behind a chair in the private dining room next to the Oval Office, looming over Donald Trump. The president sat at the head of the table. It was Dec. 1, nearly a month after the election, and Barr had some sharp advice to get off his chest. The president's theories about a stolen election, Barr told Trump, were "bullshit."

In photos: Protests outside fortified capitols draw only small groups

Armed members of the far-right extremist group the Boogaloo Bois near the Michigan Capitol Building in Lansing on Jan. 17. About 20 protesters showed up, AP notes. Photo: Seth Herald/AFP via Getty Images

Small groups of protesters gathered outside fortified statehouses across the U.S. over the weekend ahead of President-elect Joe Biden's inauguration Wednesday.

The big picture: Some protests attracted armed members of far-right extremist groups but there were no reports of clashes, as had been feared. The National Guard and law enforcement outnumbered demonstrators, as security was heightened around the U.S. to avoid a repeat of the Jan. 6 U.S. Capitol riots, per AP.