On Tuesday, June 12, by a vote of 7 to 2, the Seattle City Council reversed its unanimous decision of one month earlier to impose a new tax on the wealthiest Seattle corporations. The tax would have raised $50 million per year for programs to address the challenges posed by Seattle’s high rate of homelessness, a consequence of the sky-rocketing housing costs that have accompanied the city’s economic growth. The corporations on which the proposed tax would have fallen — including Amazon, Microsoft and Starbucks — waged a massive campaign against the tax, and the result was a humiliating reversal of the City Council’s previous decision.
To understand the effect of the proposed tax on the corporations that would have been paying it, let’s ask how the tax compares to the earnings of Amazon and the wealth of its founder and CEO, Jeff Bezos. Amazon’s 2017 revenue was $178 billion, and Mr. Bezos, who is the wealthiest person on the planet, has a net worth (as of June 29, 2018) of approximately $137 billion. The proposed tax would have cost Amazon $12 million per year, equivalent to roughly one fifteen thousandth (0.0067 percent) of its annual revenue and to one eleven thousandth (0.0087 percent) of Mr. Bezos’ personal wealth.
To put these numbers in perspective, imagine a football field in which each yard represents $1 billion. Mr. Bezos’ personal wealth corresponds to the length of the field — 100 yards — plus the end zones (10 yards each) and 17 more yards. By contrast, Amazon’s $12 million annual tax bill corresponds to less than one half of an inch. The next time you visit a football field, walk over to the goal line and place your hand in the grass. The width of your pinky corresponds to the tax; the length of the entire field and the end zones and beyond corresponds to what would have been left over if Mr. Bezos had paid it.
As another way of thinking about these numbers, let’s ask how much Mr. Bezos’ personal wealth changes from minute to minute. Most of his wealth is in the form of Amazon stock, and according to NASDAQ’s public records the value of this stock fluctuates up or down by approximately $100 million every few minutes. Thus, Amazon’s share of the annual tax to help Seattle’s homeless citizens corresponds to about one tenth of the minute-to-minute fluctuations in Mr. Bezos’ personal wealth.
This brings us to the obvious question: How can we convince our business leaders, whose talent and wealth could do so much good, to embrace their civic responsibility? With American society and much of the world experiencing record levels of wealth inequality, this is one of the most important ethical challenges of our time, and its outcome will have enduring effects. The essential mindset has been stated in many ways over the past 2,000 years — from Luke chapter 12, verse 48, to the first Spider-Man comic book — but the message is always the same: With great power, there must also come great responsibility.
Dr. Jeremy Nathans (email@example.com) is a professor of molecular biology and genetics, neuroscience and ophthalmology at the Johns Hopkins University School of Medicine.