Seattle’s socialists have a plan to construct affordable housing and aid the impecunious: make Amazon pay. The likes of Councilmembers Kshama Sawant, a self-proclaimed socialist, and Mike O’Brien think that waging a war on jobs – and basic economics – will cure poverty in one of the wealthiest and most progressive municipalities in the country.
Later this month, the Seattle city council will vote on an employee head tax, a proposal to slap a 26-cent tax on every hour completed by an employee at businesses generating $20 million in revenue per year. The levy, which is estimated to impact as many as 600 companies, is believed to raise as much as $75 million a year for housing and the homeless. It’s more likely to plant the seeds for a mass exodus.
Amazon has already hinted that Seattle won’t have Jeff Bezos to kick around anymore. Seeing the writing on the wall, not only has Amazon initiated its quest for a second headquarters, the e-commerce juggernaut has temporarily suspended construction planning for a new 17-story building expected to house approximately 7,000 employees.
When the concept was first introduced, it was projected that Amazon would pay $8 million a year. Today, that figure has spiked to $20 million. Despite Sawant demanding Amazon accept the levy, it is clear that the website is already making plans to flee the progressive capital of the nation.
This has incensed Sawant and O’Brien. The former organized a rally outside of Amazon’s headquarters, accusing the company of “blackmail.” The latter told The Seattle Times that it’s time billion-dollar companies start helping people who have been forced out of their homes and ended on the streets.
But these central planners may be more perturbed by the fact that businesses, unions, and even progressives are coalescing to fight the jobs tax. The leaders of the Downtown Association, the Seattle Chamber of Commerce, and the Greater Seattle Business Association recently penned that the tax won’t solve homelessness, while Iron Workers Local 86 shouted “no head tax” at a counter-protest
If there is one common cause that can bring together capital and labor, it’s the fatuous nature of leftism.
Soaking the Rich is a National Pastime
Seattle is the fourth wealthiest city in the U.S. Because it is the home of two of the biggest brands in the country today – Amazon and Starbucks – local politicians have established clever new taxes to ensure they get their fair share of the enormous pie. Other councilmembers have been blunt: raise current tax levels on the affluent, as well as average folk, in the name of helping the poor.
In July 2017, the city council voted to hike the individual income tax rate from 2% to 2.25% on residents earning $240,000 or more per year, or $500,000 for joint filers. Earlier this year, Seattle enacted a controversial sweetened beverage tax of 1.75 cents per ounce. It also adopted a gun tax in 2015.
These revenues have allowed the jurisdiction to install new progressive pet projects – for now.
Could this be why Seattle taxes are ranked the most unfair in Washington?
It is these types of measures that prompt the rich to absquatulate from high-tax jurisdictions. A levy on millionaires or successful businesses has been tried across the country and it typically results in the government abandoning the scheme.
Connecticut is a great example of this. The state tapped corporations and wealthy individuals for so long that they finally vanished. General Electric relocated to Boston, while 38,000 people packed up and left over the course of 12 months.
Governor Martin O’Malley (D-MD) thought the state could add $106 million to its coffers from a new millionaire tax. Millionaires paid $100 million less in taxes because the idea drove the wealthy out.
Experts are already sounding the alarm on Massachusetts and New Jersey’s proposed millionaire tax.
What Happens When Amazon Leaves?
In The Simpsons episode, “Radioactive Man,” Hollywood producers decide to film their next superhero project in Springfield. As they arrive, the government institutes new taxes and local businesses increase prices. Filmmakers eventually shut down production when they have $1,000 left in the budget, prompting Mayor Joe Quimby to quickly apply a $1,000 leaving town tax.
This is exactly how Seattle is governing.
Seattle can afford its leftist ideas. It can raise the minimum wage to $15, unionize workers of the sharing economy, ban landlords from running criminal background checks of prospective tenants, and even declare the simple act of power washing sidewalks as racist. But the charade will not linger forever.
It is no secret that Amazon’s pursuit for a second home stems from the current tax situation in Seattle. As Reason’s Andrew Heaton recently quipped, any city would be more than willing to shift the tax burden from Amazon onto other residents and small businesses.
But what happens to Seattle when Amazon eventually transitions operations to another part of the country? Or, what if Amazon falls victim to the forces of the free market and sees its market share crater? Who will be left to fill the gaping budget holes? Who will cover the tab for the next big progressive plan? Who else will Sawant blame for red ink in the books?
Liberty Nation’s Tess Lynne opined last year that “Seattle has grown too big for its britches.” She may be right. A tax on jobs is only a symptom of Seattle’s greater disease: arrogance. As the old proverb states, “Arrogance is a kingdom without a crown.”
Do you support an employee head tax? Let us know in the comments section!