The Seattle Homeless Tax Conundrum

Seattle, Washington has been one of the fastest growing cities in the world in the recent decade. It houses the headquarters of some of the biggest companies in the world like Amazon, Microsoft, and even Starbucks. However, the expansion of the city does not seem to have benefitted everybody. Politicians in Seattle claim that the rate of homelessness has more than doubled in Seattle during the last decade. As a result, they want to introduce a $500 per employee “homeless tax” on mega-corporations. This has led to several protests and counter-protests all over the city. In this article, we will have a closer look at the rationale behind this tax.

Is The Homeless Tax Justified?

Politicians from the Seattle area want to tax mega corporations because they believe that the homelessness problem has been created by mega-corporations. These corporations have created thousands of jobs. As a result, hundreds of thousands of skilled employees from all over the world have migrated to the city. This has led to an increased demand for housing which supply could not match. As a result, the prices have risen rapidly pricing many poor people out of their homes and onto the streets.

This argument seems deeply flawed. This is because Seattle is not the first city in the world to have undergone an increase in employment opportunities. Usually, when employment grows, politicians change the zoning laws to accommodate more people. This has not happened in Seattle. It is still illegal to build a skyscraper in most parts of the city. Most of the housing units in Seattle still house single families. Also, the building laws in Seattle are extremely complex with absurd rules. This discourages builders from creating new units in the area. Hence, in one way, the politicians of Seattle are the ones who should really be blamed for the homeless crisis that is being faced by the city. Firstly, they have been inefficient which has created a problem which did not exist in the past and now they want to extort even more money from corporations to supposedly cover up their inefficiency.

Amazon’s Response to the Crisis

At first, the local council in Seattle implemented a new tax wherein companies would have to pay $500 per employee per annum as a homeless tax. For a company like Amazon which employs 40,000 employees in the city, this works out to more than $20 million. Understandably Amazon was not happy about this tax. Amazon was being taxed for being efficient. They had created the jobs which are increasing the revenue in the city. On the other hand, this tax money was going to flow to politicians who have been incredibly inefficient in doing their job. Amazon quickly stopped construction on its new building being built in Seattle. This started a flurry of counter-protests by Amazon employees and construction workers who felt that their jobs were jeopardized because of this tax. The end result has been that the tax rate has been reduced to $275 per employee. Companies like Amazon will still have to pay over $10 million per annum to politicians to solve the homelessness crisis, a problem that the politicians themselves have created. Amazon is not really happy with this decision, but they have resumed work on the construction site. It is likely that this high handed behavior by the Seattle city council will prompt many companies to look for other alternatives where they would want to relocate their headquarters.

Competitiveness of Seattle

The new homeless tax being levied by Seattle is having a significant impact on the competitiveness of the city. Many businesses have moved to this city because there are no state and local income taxes imposed. Seattle is now trying to negate some of these advantages by legislating more taxes. This is the reason why companies like Amazon have already decided to build a second headquarter out of Seattle. Many other companies are also in the process of abandoning the city. The competitiveness of Seattle vis-a-vis other towns is taking a beating. If these taxation policies are allowed to continue soon, there will be no mega corporations left in the city.

Political Plans

Amazon has alleged that the plan to tax corporations that earn more than $20 million per year is not an economic plan. They believe that this is a political plan. The government is basically trying to find ways to extort big businesses. They are then redistributing this money in the poor. This makes the government look like Robin Hood, even though, they are the ones who have indeed created this problem. However, the appearance of being a problem solver is what would help them garner votes from the homeless people and other economically backward citizens.

Amazon is of the opinion that it is a poor economic idea to give more money to people who are known for not being able to manage it well. Instead, the entire “homeless tax” program is actually political propaganda.

The writing on the wall is clear. If a tax discourages a company to employ more workers, then the tax should be abolished. Amazon and other companies shouldn’t be punished for being efficient at what they do. This is socialist propaganda and must be discarded.


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