Mindless in Seattle
As unemployment soars, the City Council wants to tax job
creation.
By The Editorial Board
April 30, 2020 7:17 pm ET
The economy is on life support, but that isn’t stopping the
Seattle City Council from trying to soak employers with a new tax
on hiring. The wizards seem not to have heard that when you tax
something you get less of it.
The proposal is a reprise of the council’s 2018 tax on each
new hire that was repealed amid public opposition. The new proposal
“is 10 times larger than the 2018 version, and it’s also in an
economy that’s about 1,000 times worse,” says James Sido of the
Downtown Seattle Association, which represents business and
nonprofits.
Co-sponsors Kshama Sawant and Tammy Morales want to raise $500
million a year with a 1.3% payroll tax on most Seattle businesses
with $7 million or more in payroll. The Seattle Chamber of Commerce
says this would hit some 800 businesses. The minimum liability
would be $91,000, but many companies would see a six-figure hike or
more.
Businesses would be assessed based on the prior year’s
payroll, but revenue has cratered this year amid the pandemic.
Amazon will be fine, but businesses on the margin that have been
forced to lay off or furlough employees may not bring them back if
it means crossing that $7 million payroll threshold. The tax would
discourage smaller companies from growing in Seattle.
Ms. Sawant blames corporate greed for lost jobs: “As long as
capitalism is in existence, the billionaire class will extract its
vengeance for whatever we can do as far as reforms.” Yes, trying to
stay in business is now “vengeance.”
Most of the new tax revenue would go to public housing for
those earning up to 100% of area median income, which was $85,562
in Seattle from 2014-2018, according to the U.S. Census Bureau. The
tax would also pay for Green New Deal initiatives like converting
homes from natural gas to electricity.
Councillors Sawant and Morales are pushing for a vote in
mid-May, but support isn’t unanimous. One risk is that their fellow
far-left councillors will pass a scaled-down version of the
business tax and portray it as moderate.
The personal-finance website WalletHub reported this week that
Seattle is the hardest hit city in the U.S., with unemployment
rising 105.92% between January and March. Only a socialist would
think now is the time to further punish job creation.
Economic Issue: Taxes Matter
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