Seattle as a city and as a government is becoming notorious for creating task forces, committees, and other convening’s to come up with solutions to “big problems.” Almost without exception, the task force states the problem as “severe” a “crisis” or a problem at such as scale to demand action now. Usually there are big numbers to set the need, and then a decision that the problem simply needs more money. The recently convened task force to consider the reimplementation of a tax on jobs has followed the same pattern. This time, the task force wants $75,000,000 in taxes to help “resolve” homelessness and housing insecurity. But like every time before, there’s little concern about whether the solution, more cash, will actually solve the problem. Here’s the draft recommendations. It’s just assumed, more money solves problems — unless it’s prosperity.

There’s a long history with what has been called the Employee Hours Tax or the Head Tax.  In 2009, the Seattle City Council acted to abolish this tax that was, at the time, rather modest. It generated about $5 million annually and was used mostly for improvements to bike and pedestrian infrastructure. Most business paid less than $100 for the tax and some bigger ones paid only in the thousands of dollars. At the time, I supported it because for a relatively small amount of money per business lots of money was available to make improvements to support people doing what we want them to do: walk, bike, or take the bus to work rather than drive.

Nevertheless, the Council acted on behalf of the business community and ended the tax. Now, the politics have turned and the Council has its eye on taxing jobs not for a few million dollars but $75 million and the task force said in it’s report, and even more on top of that in the for of debt, borrowed against the tax. The report shows the muddled thinking behind most Seattle efforts to solve “big problems.” Let’s take a look at the report.

First, one can detect in the document the words of someone trying to use reason. There is a voice somewhere on the panel pointing out that the

In considering the dedication of funding from an EHT, we recommend that the City give deep thought to the wide spectrum of needs and situations of people experiencing homelessness, recognizing that what works for one person may not work for another.

When talking about homelessness, the City likes to use the one night count then declare that the number indicates the number of units needed or likes to multiply that number by some factor to indicate how much money is needed. But that’s faulty. An accurate assessment of each and everyone of those people without any housing would indicate a “wide spectrum of needs” that might be helped with money but might be eased with process improvement. Figuring that out would, well, require work, something this City doesn’t like to do. Getting a big number and multiplying it by dollars is a lot easier.

But why even do that? The $75 millions doesn’t seem to be connected to anything about the costs.

Given the scale of the need for deeply affordable housing, shelter, and services, we recognize that an adequate response to the housing and homelessness crisis calls for hundreds of millions of dollars per year in new revenue in Seattle for at least the next ten years.

Why hundreds of millions? Who knows? The report doesn’t point back to any needs assessment. They might as well have said, “lots, and lots of money.” Just make up a number.

That voice of reason pops up again, though

The capacity of non-profit housing developers to take on new projects should be assessed and considered in making this decision. The difficulties of acquiring suitable land should also be taken into account.

Yes, that’s an interesting question. Once this fire hose of cash is trained on the problem, can the non-profits even lock up land and build all this housing they’d supposedly build? How much would it cost? Would it be in the $350,000 to $500,000 per unit range that it has been costing? This is a bit of an afterthought. And then there’s this comment in the report which would be hilarious if it wasn’t so outrageous,

Because of the cost of living in our region and the cost of new construction, we find that to resolve homelessness and the low-income housing crisis in Seattle would require new public funding on a grand scale –hundreds of millions of dollars per year for at least the next ten years.

See, we already have something grand, the Grand Bargain. Remember that? That’s going to tax new housing at about $14,000 per unit or more until 2025 and based on what the City is after will produce somewhere around $70,000,000 in money for housing each year. Zero consideration was ever given or even discussed on how that would impact prices of housing or whether it would realistically pay for it. I guess that bolsters the argument that we need “hundreds of millions” to build housing even though it’s unclear whether that is the solution that is most efficient, desirable or even achievable.

And speaking of where the money will come from,  the thinking that supports all this is bizarre.

Despite the economic prosperity driving growth in the City’s revenues, and in part because of it, Seattle is facing a homelessness crisis of unprecedented proportions. (emphasis added, citation 2018 Proposed Budget Executive Summary, page 2).

That’s right, the reason why we’re in trouble here is because of jobs! All the prosperity is making things worse for poor people. So what do you do when something is bad for people and you want to discourage it? Tax it! That’s why there’s no other way to describe the recommendation other than a tax on jobs. If we had less prosperity and fewer jobs it’s for sure all those homeless people we see would just melt away back into the housing economy. Problem solved.

And here’s another gem from the report, this tax on jobs is

Inherently progressive in the specific sense that, because it is levied on employers rather than individuals or households, it is a way to raise revenue for public use without directly and disproportionately impacting lower-income residents in the way that, for example, sales taxes and property taxes tend to do.

Ahhhhh. Right. Lower income people won’t be impacted because the tax comes from employers (their emphasis), employers. Get it. Employers are’t people, and with all that money they’re making it won’t impact the way they do business at all. It certainly won’t discourage hiring new people and creating more jobs for poor people would it? I mean  those new jobs are why people are poor in the first place? Well,

We note that there are no known data establishing that an EHT-like tax adversely impacts employment opportunities.

Got it. But then you can hear your elementary school teacher’s voice telling you why you should eat your vegetables.

And there is much data to show that business-friendly climates are jurisdictions that adequately address homelessness, fund quality schools, and maintain infrastructure necessary to move people and goods.

So don’t start walking around town suggesting that this new tax doesn’t make this an “unfriendly” place to do business because “much data” shows you are wrong!

And by the way, the assessment of this tax might be a little uneven. You know it’s going to be hard to tell and figure out exactly which business might be hurt by this and which ones will see the tax as a rounding error, because

The variables listed above that, as far as we understand, the City has the power to adjust are admittedly imperfect.

But the report goes on to say, let’s not let “the perfect be the enemy of the good.” Tax them all and let God sort them out!

Will non-profits pay? Maybe. How about the big non-profit housing industrial complex banging the drum for more money, more money and even more money?

It is reasonable and important to exempt many non-profits, especially those that provide housing, shelter, and services to low-income and homeless populations.

Well, sure, because those non-profits make housing, something that developers and builders and land lords don’t do; they make profits not housing, remember? When we tax market rate developers for new housing, that doesn’t add cost to housing making prices higher. Umm, the price of the land goes down! Yep, that’s it. The land owner takes it in the shorts. And will people who build and operate housing have to pay the jobs tax? Of course! They are just an employer, remember. And employers wouldn’t stop hiring employees and they certainly wouldn’t pass the cost of the tax on to consumers as higher prices for housing.

And all of this, a jobs tax, the housing tax that is part of Mandatory Inclusionary Zoning, rising property taxes, and increases in minimum wages, requirements for paid leave, and micromanaging of employee schedules is simply not enough. Of course not!

We also urge that the City work together with King County to prioritize lobbying the 2019 state legislature for more progressive revenue options, beginning mid-2018.

The depth of avarice and ignorance of how the economy works and lack of awareness of other extortion of businesses and property owners is staggering and seems studied. The bent of this group is, I guess, that all these costs will just get absorbed by the Tax Fairy; just put your latest tax under your pillow and tomorrow you’ll wake up and find all your problems are solved. It’s one thing to see prosperity and say tax it, but magical thinking to say, “prosperity causes poverty, therefore we should tax jobs so that there’s less prosperity.” Making more housing just makes the housing problem worse, so let’s tax that too. It’s only fair, right?