To help Seattle’s large homeless population, the city council recently passed a massive tax on companies with at least $20 million in total annual revenue. These large businesses will now be forced to pay $275 per employee to the city government, in addition to the numerous other local, state and federal taxes these companies are already required to pay.
Following the passage of the tax, Seattle Councilmember Teresa Mosqueda said the new levy “will have a meaningful impact on addressing our homelessness crisis by building housing and providing health services.”
Helping the homeless is a noble goal, but if expansive government social programs were an effective way to end poverty, cities such as Chicago, Detroit, and other left-wing bastions wouldn’t be crumbling urban war zones after a half-century of continuously implementing multibillion-dollar government poverty initiatives. What the left refuses to admit, no matter how much evidence is presented, is that government is completely incapable of fixing poverty, and in many cases, it only makes the problem much worse.
Seattle’s newest tax is a perfect example of how liberals’ good intentions end up hurting the poor and working class. Once a business in Seattle is required to pay $275 per employee, who do you think that business will lay off first: the highly paid and educated executives or the lowest-earning employees whose jobs can easily be replaced? The tax is applied the same, regardless of how much money an employee earns, putting employees in less-important positions at greater risk.
When it comes time to expand business, do you think these companies, many of which are in the technology industry and can easily conduct their operations anywhere in the world, will stay in Seattle, or will they relocate to avoid millions of dollars in additional taxes? If they do leave the region, who will be hurt the most: the lowest-earning employees who may not be able to afford packing up and moving with the company or big-money executives?
And what about all the small businesses that don’t earn $20 million per year (and thus don’t have to pay the $275-per-employee tax) but profit off those businesses that do? For instance, lower-wage service industry workers in restaurants and coffee shops located near Amazon’s headquarters will suffer if Amazon packs up and leaves town or chooses not to expand to avoid paying Seattle’s new tax. In many other cases, businesses might choose to stay but raise their prices, which, depending on the business, could hurt the poor the most.
Liberals’ strategy for fighting poverty and improving people’s lives has been the same for a century: They want to raise taxes, increase regulations, and force lower-income families to rely on government for all their basic, and even many of their non-basic, needs. While their hearts may be in the right place, their plans almost never work as advertised because government is completely incapable of consistently providing high-quality services.
The reason for this is simple: Because government agencies don’t have to worry about staying under budget or earning a profit, they operate incredibly inefficiently, and many of their employees are able to use political pressure to negotiate above-market salaries and lavish benefits, such as lifetime pensions and health coverage.
The government can’t figure out a way to operate the Post Office without losing millions of dollars. It can’t operate a well-functioning Department of Motor Vehicles, either, or properly educate our children. It rarely completes public works projects without going over budget, and the federal government is more than $20 trillion in debt.
Yet, despite all these problems (and many more, too), leftists desperately want to empower bureaucrats by giving them even more cash, which they can only get by taxing people who run their businesses much better than bureaucrats run the government.
Proponents of the new tax say it’s necessary to help the homeless, but the city of Seattle spends more than $5 billion every year. Are these city councilmembers really saying they can’t find any room in their already massive budget to build a few more homeless shelters and primary care clinics?
No matter how much of people’s money is taxed and spent, left-wing politicians will never be satisfied. There will always be another “urgent crisis” around the corner that can only be fixed by the army of fearless social justice warriors that now occupy thousands of taxpayer-funded government buildings across the country. There will never come a day when families and businesses have been taxed enough to satisfy their desire to create the perfectly designed government-run society. Why? Because the longstanding American commitment to individual liberty and self-reliance doesn’t help bureaucrats, crony capitalists, or the ruling class obtain more money or power.
If the definition of insanity is trying the same thing over and over but expecting different results, Seattle’s bleeding-heart politicians need to be locked away — for the good of the taxpayers and the millions of families who remain trapped in poverty as a result of America’s failing government social programs.
Justin Haskins (Jhaskins@heartland.org) is executive editor and a research fellow at The Heartland Institute.