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Opinion: Seattle tries to tax the rich to enrich the poor

By Wray Haynes

Seattle-(Liberty Report)-Liberalism strikes again. Proving the point you cannot tax the rich to enrich the poor.

Seattle, Washington. Iconic, and a pillar of liberal ideas it is home to Amazon, Starbucks, and several other multi-billion dollar businesses. Some might say that it has become a “second Silicone Valley.” It is one of the first cities to adopt the “living minimum wage.” For such a progressive city, why is it victim to a growing homeless problem?

In recent years the homeless population has skyrocketed. If the living wage was supposed to fix this issue, and allow people to have the means to pay rent and live, why did the level of homelessness explode? Why did the city council considering a punitive tax on its major economic contributors to combat the problem?

Amazon, in particular, had halted construction of several multi-million dollar office spaces and warehouses and would limit new hires – thereby exacerbating the problem – because of proposed new “head tax” amounting to about $500 per employee per year. In Amazon’s case alone it would mean over $20 million in new taxes, and that figure would likely go up as it transitions to a .7% payroll tax in 2021.

In a city that is home to so many large businesses, a bustling commercial sector, and a bustling nightlife and restaurant scene, why the struggle? It’s a complicated answer, but can be boiled down to a simple truth. You cannot tax the rich to make the poor prosper, and you cannot artificially inflate wages without an economic backlash.

Small businesses cut employee hours and staffing because they simply couldn’t afford the new wage. Skilled labor cost increased as their value didn’t change, but the minimum wage did, driving increased wages. People were supposed to have more money to push the economy to new heights and create a level playing field. That just didn’t happen.

Economics is a complicated issue, but there are a couple of simple truths. If you artificially inflate and inject an economy with a false value, more than the market will bear, then the whole thing will shift to make up for the gap. Give every citizen in a town a free house, and $1,000,000. Soon, eggs will cost $100/dozen. The market will correct, and you are left back where you started. By trying to tax significant economic contributors for whatever reason, you will soon see those businesses go to more friendly areas, hire less, and stop construction to conserve costs. There will soon be a lack of new jobs, less development, and the problem only grows.

Amazon, before this tax, has donated two buildings on its campus to house homeless. It’s building homeless shelters. This is the libertarian ideal. A private business using its success to care for the community. If a private company is doing these things, what is preventing the city government from using existing taxes, from effectively combating these issues?

I don’t have an answer. I’m left wondering why so many people support these types of liberal agendas. Taxes aren’t the answer. Look at the sin taxes passed in the Commonwealth of Virginia. Supposedly to fix the roads, recent a major highway failed, and VDOT was left with a giant bill to pay for repairs to taxpayers cars. Where did the money go?

John Crump

John Crump

CEO & Co-Founder Black Swan Media Group, LLC

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