Tax Policy

Never mind: With disastrous results mounting, Seattle will repeal its new tax on employment

By —— Bio and Archives--June 13, 2018

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Seattle will repeal its new tax on employment, Tax Policy
It’s the New Coke of tax policy! (If you don’t know what that means, ask your parents. They’ll remember.)

It’s not as if Seattle is about to become a beacon of small-government, low-tax, free-market economics. They’re still chasing fast-food chains out of the city with a $15 per hour minimum wage.


But we now have an answer to the question: How disastrous does a tax have to be to get the business-hating liberals who passed it to admit they screwed up and repeal it?

Turns out, this disastrous:

The about-face shows how severely the tax debate polarized Seattle, pitting some politicians and city residents against big employers like Amazon, Starbucks Corp. andNordstrom Inc.

It also reflects the depth of divisions about how best to deal with growing homelessness in West Coast cities where wealth, spurred by technology companies and other fast-growing businesses, has raised the cost of living, pushing more people into poverty and homelessness.

Among councilmembers ready to repeal the tax, some characterized it as caving to business interests but said they had no better options. Councilmember Lorena González, who signed the statement on the repeal, criticized the business community for “choosing to double-down on polarizing the issue of homelessness and fostering divide amongst Seattle residents.”

“I regret that it appears that powerful and well-resourced interests have swayed public opinion to believe that more is not needed,” she said.

The Seattle tax passed after months of debate and a last-minute flurry of public protests on both sides of the issue. The tax would have levied $275 per employee on companies with more than $20 million in annual revenue, or about 3% of Seattle-based businesses, according to the City Council. It was projected to raise about $47 million a year, to be spent on affordable-housing and homeless services.

Think about the logic of this: You want to help the homeless, so you put a tax on the thing that would help homeless people the most – a job. And in the course of doing so, you also add to the cost of creating jobs for everyone else too.

If we’re to be honest, we’d have to acknowledge that most homeless people are not simply down on their luck or having an inexplicably hard time finding work. Most homeless people are drug-addicted or otherwise mentally ill, and can’t function in even the most basic roles in society that the rest of us consider basic and fundamental. There is plenty of affordable housing for people who can show up for work regularly, but people with problems like these can’t even do that.

I’m not sure what Seattle had in mind by “homeless services,” but what I do know is that destroying the ability of the local economy to provide work for people ready and able to do it would not help the homeless or anyone else. And chasing away companies completely, as this tax risked, would have been a total disaster.

Say, since Seattle’s liberals have just admitted that excessive taxation kills jobs and economic growth, will those in the rest of the country get the memo as well?


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Dan Calabrese -- Bio and Archives | Comments

Dan Calabrese’s column is distributed by HermanCain.com, which can be found at HermanCain

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