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Letter to the Editor: Denying Gravity

To the Editor:

It’s a simple principle. If you tax something, then you tend to get less of it. That’s why there’s such a high tax on cigarettes, for example – to dissuade the behavior.

Conversely, if you subsidize something, then you get more of it. Hence, “tax incentives” to lure new businesses, build stadiums, etc. It encourages what you want to promote. And yet, governments somehow forget this truth when it’s inconvenient.

In 2014, Seattle adopted a $15 per hour minimum wage law, to be phased in over the next several years. The number of low-wage jobs promptly dropped. In 2015, it declared a “state of emergency” in homelessness. Go figure. Who’d have thought?

Now, Seattle wants to fix its homeless problem with a new tax on large businesses, based on their number of employees, to “address” [read: subsidize] homelessness and build more affordable housing. Good intentions, bad idea.

Predictably enough, its biggest employers, especially Amazon, are balking. Companies can and do move or transfer operations elsewhere based on things like taxes. Even New York, that liberal bastion, has been trying lately to lure businesses by advertising new, lower tax rates. And yet Seattle still thinks it can simply ignore basic economics and force a contrary outcome because it wants one. Sure. ‘Cause that works so well whenever it’s tried.

James R. Stein

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