Freedom Foundation

Seattle’s head tax: Look carefully at who’s behind it

Surrendering once more to its weakness for the sort of linear thinking that ultimately dooms all liberal ideas, the Seattle City Council seems determined to inflict a crippling tax on its most successful, job-generating businesses.

The scheme de jour is a so-called “head tax,” and its ostensible beneficiary is the city’s exploding homeless population. But the formula on which it’s based is invalidated by the same obvious miscalculation backers of the $15 minimum wage ignored when the council embraced that boondoggle two years ago.

By imposing a tax of 26 cents for every hour worked by employees of the 600 or so Seattle companies with gross revenues topping $20 million a year, the council boasts it will raise $75 million – with which it intends to build even more homeless shelters, “tiny house” villages and affordable apartments.

This is a terrible idea for myriad reasons, but let’s focus on just the most obvious.

First of all, it’s axiomatic that when you reward behavior – by incentivizing poverty, for example –you only get more of it. According to a May 2 article at FoxNews.com, “Despite spending in Seattle and King County that has ballooned to $200 million a year, the number of people living in tents, on Seattle streets and in vehicles has grown 20 percent since 2016, to nearly 4,000 individuals.”

By that reasoning, spending an additional $75 million a year – an increase of 37 percent – Seattle can expect its homeless population to grow by another 1,500. At a minimum.

So much for “fixing” the problem.

But wait, there’s more. The council’s tax revenue projections are based on the simple expedient of multiplying the number of taxable employees by the amount it intends to tax per hour. Unfortunately, that assumes the number of employees will remain constant.

But it won’t – unless you believe, as liberals always do, that companies want to be taxed as much as the council wants to tax them.

In fact, the objects of the council’s lust are already making noises about taking themselves out of the line of fire. Amazon, to name just one, has already halted construction on its downtown headquarters building until the council puts the head tax question to a vote, and other companies are threatening action, as well.

All of which begs the question: Why are we doing this?

To answer that question, you simply have to look at who supports the tax. And once you sift through the usual socialists, business haters and economic illiterates, the finger of blame points squarely at SEIU 775 President David Rolf and others who represent public employees.

SEIU 775 supported a head tax back in 2015 to fund the city’s Office of Labor Standards, which enforces Seattle’s increasingly byzantine labor laws. Part of SEIU 775’s plan involved using some of the funds to provide grants to unions to educate workers about the city’s labor laws and file complaints against offending businesses. When the plan met with skepticism at city hall, SEIU 775 threatened to put it on the ballot as an initiative.

After floundering in 2017, however, the city formed the “Progressive Revenue Task Force on Housing and Homelessness” to determine how to raise additional tax revenue. The members of the task force represented many liberal nonprofits and two labor unions, SEIU Healthcare 1199NW and UFCW Local 21. The task force’s report, released in March, called for adoption of “an Employee Hours Tax (EHT) to generate new revenue to address the housing and homelessness crisis.”

Left unacknowledged in all the city council’s altruistic rhetoric about helping the city’s less fortunate residents is the reality that generating an additional $75 million in revenue will inevitably create more than just homeless housing. With it will come the need for additional city employees to administer the program and redistribute someone else’s wealth.

And each of them, unions understand, will be a dues-paying union member.

Again, linear thinking. Like all bad liberal ideas, Seattle’s head tax – at its core – has nothing to do with alleviating the problem of homelessness. Indeed, the scheme will only make the problem worse.

Meanwhile, the perpetrators are succeeding as always at their true objective of making the city even more dependent, growing the size of government and lining the pockets of those in the business of profiting from others’ misery.