Debiting Amazon

Seattle can’t tax housing problems away

Seattle is bursting with so much economic development that the community cannot house everyone who lives there. The population of the metro area is said to be expanding at a rate of 1,000 people a week.

You might say that’s a good problem to have. Not entirely.

So many people are flocking to Seattle that the streets and parks and school playgrounds are dotted with the tents of people who have no place else to live.

According to Seattle City Council, some 3,800 people sleep outdoors in the city every night, and King County has 12,000 homeless people.

So, while Seattle is one of the most desirable, economically successful and progressive cities in the country, and home to Amazon and other enlightened employers, it has badly mismanaged its housing.

The solution? According to city officials, it is taxation.

Noting the massive profits being generated by Amazon — $2 billion last year — the city of Seattle decided it needs some of that money and that it should assess Amazon, and other corporations, a fee, well, basically for being Amazon.

The city will impose a “head tax,” a fee of $275 per employee, charged to the city’s 585 largest employers — any company taking in more than $20 million in annual revenue. Approved unanimously by city council, it is known as the “Amazon tax.” Its moral basis is the same one Willie Sutton used for robbing banks: “Because that’s where the money is.”

The city expects the tax to raise roughly $47 million per year this way and that, somehow, this will fix the housing problem. It will go, Amazon and the world was told, for “low-income housing, homeless shelters and emergency services.”

If you are wondering how — for none of these plans is in place — you are asking the same question Amazon asked and that the city has not yet answered.

Government doesn’t work that way. Housing doesn’t work that way.

does not work that way. Affordable housing is notoriously difficult to create. And housing costs are impossible to control in an open economy. Eventually, the market will catch up, but, in the meantime, government can create bridges to compensate for market failures and help the most needy. That’s a complicated, subtle process.

Government cannot make a social or structural economic problem go away by simply socking it to those who have money.

Seattle has an acute housing problem, but it also has a separate homelessness problem, and has had for years. So there is a long-standing social problem that has converged with poor public administration and a market out of sync.

A solution is possible in a city that is prosperous. Seattle is prosperous because of the enterprises it is now waging war on. Amazon take note: This will not happen in Pittsburgh.

The other convergence here is of liberal guilt and a “prosperity bomb.” Many a city is hoping for such a bomb from Amazon right now. Those cities can learn a lesson from Seattle. Instead of “tax first, plan later,” make your housing contingency plans now, and think about an equitable and rational way to pay for it.