Taxes

Jobless in Seattle

Seattle's new "head tax" of $275 per full-time employee is going to kill jobs.

Nate Jackson · May 16, 2018

Here’s irony for you: Seattle is penalizing the companies most responsible for employing people while rewarding the city officials most responsible for creating a crisis of homelessness. What do we mean? We’re referring to Seattle’s new “head tax” of $275 per full-time employee for companies earning at least $20 million in annual revenue. Nearly 600 employers will be hit by the tax, which was dialed back from the initially proposed $500 per job. It was unanimously passed by the Democrat-run city council this week with the ostensible aim of raising nearly $50 million per year to pay for affordable housing and other “homeless services” — services needed because Democrat policies cause poverty. Seattle and King County, “home” to the third-highest number of homeless people in America, already spent $200 million on the problem last year.

The resurrected and greatly expanded tax is significant for two reasons: First, and most important, it serves as a Democrat model for other cities. Democrats always aim to punish the successful so they can redistribute to their favored constituency groups in return for votes and, thus, power.

Second, Seattle is home to both Starbucks and Amazon, two of the nation’s largest employers, both of which oppose the tax. Now, don’t get us wrong, we have little sympathy for either company. Starbucks has been at the forefront of leftist social justice battles, albeit recently getting a taste of its own medicine. And Amazon founder Jeff Bezos is the world’s richest man and a stalwart financier of leftist causes, not least of which is owning The Washington Post. Amazon recently justified some anti-conservative discrimination based on the work of the radical leftist hate group known as the Southern Poverty Law Center.

But Amazon Vice President Drew Herdener sounded downright conservative in denouncing this “tax on jobs.” He hammered the city, saying, “City of Seattle revenues have grown dramatically from $2.8 billion in 2010 to $4.2 billion in 2017, and they will be even higher in 2018. This revenue increase far outpaces the Seattle population increase over the same time period. The city does not have a revenue problem — it has a spending efficiency problem. We are highly uncertain whether the city council’s anti-business positions or its spending inefficiency will change for the better.” Indeed, Amazon is looking to expand elsewhere.

A letter signed by more than 100 Seattle business leaders likewise nailed it: “We oppose this approach, because of the message it sends to every business: if you are investing in growth, if you create too many jobs in Seattle, you will be punished.” Companies won’t hire more workers, and they’ve stop shy of earning $20 million.

As Fox News dryly notes, “Seattle once had a $25-a-year per head tax, but killed it in 2009 because leaders said it sent the wrong message to businesses during the recession.”

Back to homelessness, again, Seattle’s city council helped create the problem. Investor’s Business Daily reports, “From 2010 to 2013, the city saw an explosion in the construction of ‘congregate housing units’ — basically, affordable, dorm-room size apartments with shared kitchen and living areas. Within those three years, private developers constructed 1,800 units. But by 2015, not one was built. Why? In 2014, the city stepped in and smothered this option with regulations that required the apartments to be bigger, banned them from more desirable areas, and forced builders to jump through costly design reviews.” Voila, housing shortage.

And that’s on top of Seattle’s job- and pay-crushing $15/hour minimum wage, its income-redistributing tax on high-earners (that was struck down as illegal), its tax on property owners to pay for political speech, its soda tax and its gun tax, just to name a few.

It sure seems Seattle’s Democrat overlords are doing everything possible to follow in the footsteps of the socialists killing Venezuela.

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