Seattle’s socialist tax bill fails, as simple economics predicted

The Seattle government is a little behind the times or perhaps they forgot to pay attention in their high school economics classes.

Last month, Seattle passed a tax on business that was set to take effect in Jan. 2019, which would impose a yearly fee of $275 per employee for the city’s largest corporations, including Microsoft, Amazon and Starbucks.

City officials thought the tax would generate revenue to help tackle its homeless problem. They predicted it would raise $47 million a year.

That’s right they thought if they taxed businesses, the businesses would gladly give up their revenues, hire more employees so they could be taxed even more, and homelessness would be eradicated in the entire city.

Boy, were they wrong.

Instead, corporations threatened to move away from Seattle or base their employees just outside the city borders to avoid the tax.

The tax proposal was ultimately killed due to public pressure form a business-backed referendum campaign that had already gathered twice the number of signatures required to have the tax rejection placed on the November ballot.

City politicians decided to kill the bill themselves instead of letting voters do it.

“We heard you,” said Seattle Mayor Jenny Durkan in a joint statement on Monday with city council members who supported the tax. “This week, the City Council is moving forward with the consideration of legislation to repeal the current tax on large businesses to address the homelessness crisis.”

There are reports of other West Coast cities, including some in the Bay Area like San Francisco, Cupertino and Palo Alto, who were playing with the idea of imposing a similar tax.

Hopefully they took economics classes. And if they didn’t, hopefully they are paying attention to their neighbors to the north.


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