Tuesday, May 15, 2018
Has Seattle Sacrificed Amazon for the Homeless?
The nation’s rapidly rising ranks of the homeless is a modern American Tragedy. The problem is especially acute in Seattle, Portland, San Francisco, Los Angeles, Orange County, and San Diego. Cities are struggling trying to cope with the growing homeless problem. A common approach has been to build shelters for them. Some areas rent motel rooms. Orange County has a federal judge attempting to resolve the homeless issue. Seattle’s City Council pondered a different approach to funding the shelters: taxing the city’s large employers. The proposal two weeks ago was to impose a tax of $.26/employee hour on employers with taxable gross receipts of $20 million or more, about 600 employers in Seattle. This head tax would amount to about $540/employee annually. It would shift to a payroll tax of .07% in 2021. About 1/3 of it would fall on Amazon, the largest employer in Seattle. Let’s go back five decades in Seattle history. Seattle and its environs were home to several companies, but Boeing was the large employer. Microsoft, Nintendo, Starbucks, and Amazon had not yet arrived on the scene. Nordstrom’s was still a small, regional department store. Boeing was the industrial giant driving Seattle’s economy. The billboard went up: “Will the last person leaving Seattle please turn off the lights?” Seattle today is a great, booming city. The average price of a home in Seattle is $820,000. I wish I still owned my house on Capitol Hill. 48% of the city’s renters are spending at least 1/3 of their income on rent. The South Lake Union District between Lake Union and downtown was economically depressed, covered with a multitude of parking lots. Now it is wall to wall condos, fueled by Amazon, which currently employs 45,000 workers in Seattle. Let’s go back over a century. John D. Rockefeller’s burgeoning Standard Oil colossus was based in Cleveland. It was outgrowing the city, which tried to impose a $1.5 million tax on Rockefeller over his opposition. It went ahead anyway. Rockefeller moved the base of his operations to New York City. John D. Rockefeller left Cleveland behind, only returning for his internment at Lake View Cemetery. He co-founded the University of Chicago with a $600,000 gift and then later donated over $30 million to the University. He donated a total of $34,708,375.28 to the University of Chicago, providing it the financial means to achieve greatness. He also founded the Rockefeller University, nee Rockefeller Institute. A research powerhouse. Contributions to Cleveland’s case Institute of technology were lacking. Seattle is doing its best to antagonize its biggest employer and discourage employers from moving to the Emerald City. Amazon’s immediate response to the Council proposal was an announcement that it had ceased construction planning on a new 17 story building and might lease out space in another building it was planning to occupy. Mike O’Brien, a Council member said “From my point of view we have a crisis in our town around housing affordability and homelessness. They’re closely related, and it’s related to the booming tech industry in Seattle.” He further stated “I need to run a city that has room for prosperous businesses but doesn’t do it at the expense of people getting pushed into poverty.” Seattle has long been a politically progressive city, but it is now trying to outdo San Francisco. It attracts idealistic, young students to the University of Washington and a large number of potheads with the state’s marijuana law. They vote progressive, even socialist. Lisa Herbold, a council member emailed “A progressive tax on businesses most benefiting from this growth is our best option because we already rely heavily upon regressive property and sales taxes that hit everyone equally.” Lisa totally misunderstands reality. Amazon is creating the growth, not benefitting from it. Kshama Sawant, a socialist member of the City Council, said the Council should “stand up to Amazon and Jeff Bezos bullying.” The other seven members are progressive Democrats. Council member Teresa Mosqueda wanted a higher tax. She said “people are dying on the doorsteps of prosperity. This is the richest city in the state and in a state that has the most regressive tax system in the country.” A prevailing view was that Amazon could afford it. Steve Leigh writing in the SOCIALISTWORKER.org headlines the traditional talking point “Amazon puts profits ahead of Seattle homeless.” He accuses Amazon of “blackmailing Seattle.” Seattle is not starving for revenue. The City’s revenues in 2010 were $2.8 billion. They were up 50% to 4.2 billion in 2017. Its spent $68 million in 2017 on the homeless. Seattle and King County are together spending $200 million on the homeless population. Washington’s Governor Jay Inslee is offering another $40 million from the state. But where is the money going? Seattle has the nation’s third highest homeless population with nearly 4,000 still living on the streets, up 20% from 2016. There’s never enough revenue for progressive politicians for whom the needs are infinite. Mayor Jenny Durkan said “We cannot tax our way out of this problem, we won’t have a big enough population to do it.” The Mayor then proposed a compromise of .14/employee hour, equaling $275 annually per employee. The new tax would be in effect for 5 years, and then replaced by a .7% payroll tax. If $.26 cents won’t do it, then what can you say about $.14 cents? Does anyone believe that these taxes won’t be increased in the future? Teresa Mosqueda simply called the new tax a “downpayment.” She said before the May 14 meeting “We have community members who are dying. They are dying on our streets because there is not enough shelter and housing.” Has she asked how the current $68 million is being spent? The Council unanimously passed the compromise last night. Amazon’s Vice President for Global Corporate and Operations Communications Drew Herdener said after the vote “We remain very apprehensive about the future created by the Council’s hostile approach and rhetoric towards larger businesses, which cause us to question our growth here.” He added Seattle “does not have a revenue problem – it has a spending efficiency problem.” That’s often the case with progressive government! Lorena Gonzalez, yet another progressive council member, she was disappointed with Amazon’s response, and that “their tone in this message that is clearly hostile to the city council is not what I expect from a business who continues to tell us they want to be a partner on these issues.” It’s hardly a partnership when one side is mugging the other. John Kelly, Senior Vice President for Global Public Affairs at Starbucks said “If they cannot provide a warm meal and safe bed to a five-year old child, no one believes they will be able to make housing affordable or address opiate addiction” through the new tax. He also said “The City continues to spend without reforming and fail without accountability.” Progressives ans socialists are good at spending other peoples' money. The eight members of the Seattle City Council are the second highest paid of the 40 largest cities in the United States. The latest tax is but one in a series of progressive tax moves. The Council earlier raised the minimum wage to $15/hour, closing several restaurants. It imposed a 1½ cent/ounce tax on sweetened beverages, but exempted Starbucks drinks from the tax. A classic move was its anti-gun tax. It enacted a $25 per gun purchase tax and $.01-.04 tax on each round of ammo sold in Seattle. It hired 7 employees to enforce the tax. The payroll cost is $678,000. The tax raised $93,000 in 2017, down from $104,000 in 2016. The City had 40 federal firearms licenses in 2015, but dropped to 32 by December 2017. More significantly, all Seattle gun stores closed. The City had estimated the tax would raise $300,00-500,000 annually. An understanding of basic economics and history is lacking in Seattle. Capital is mobile. Corporations can move their headquarters. Boeing did it in 2001 when they moved to Chicago from Seattle. Boeing has also opened a large assembly plant to South Carolina. Not all their operations have to remain the in the greater Seattle area. Amazon is already looking for a second headquarters as it is outgrowing Seattle. Most of its jobs do not have to remain in Seattle. Studies show a large percent of young Americans support socialism. They are well represented on the Seattle City Council. They believe in taxing the rich. The intolerance of the radical socialists is shown by two incidents at the University of Washington. The outspoken conservative Milos Yiannopoulos spoke at the University on January 20, 2017. Protestors began rioting around 6:00pm, clashing with police. The speech was scheduled for 8:00pm. Milos spoke to a half-empty room because the protestors blocked access to Kane Hall. One person outside the building was shot during the melee, but bot by the police. The suspect claimed self-defense. The riot-clad police had to surround the aptly named “red Square” on campus. More disturbances occurred a year later as the intolerants clashed with a Republican Party organized “Patriot Prayer” at a “Freedom Rally.” The irony is that both Amazon and Starbucks are progressive companies. Jeff Bezos and Amazon can afford the tax. Jeff Bezos is a political progressive. It was only a few years ago that he was personally placing books in boxes to be shipped to a few customers. He runs a fiscally conservative company.