Friday, May 11, 2018

Don't Mess with Amazon

The moral of the story: don’t mess with Amazon!

That’s what the mentally challenged city council of Seattle, WA tried to do. As you know, those who putatively govern blue cities have a very limited imagination. All they can think of is: raising taxes on prosperous enterprise. They want to use the money to care for the burgeoning homeless population-- and to pay for failing programs. Having fostered homelessness they now want big business to pay for it.

Anyway, the city of Seattle decided to hit on Amazon for more money. Steven Malanga reports in The City Journal (via Maggie’s Farm):

While cities around the country dangle huge tax incentives at Amazon in an effort to attract its planned new headquarters, the Internet giant’s hometown of Seattle is trying to wallop the company with a $20 million-to-$30 million new tax. The effort is not going well, as the company, construction workers, editorialists, and residents balk at the idea of squeezing more dollars out of Amazon and other big firms in a city with coffers already overflowing with revenues. The uproar might be evidence that the progressive strategy of forcing big businesses to pay their “fair share” has its limits.

It’s not just Amazon that objects. Other significant players have joined the chorus:

Last week, Amazon put on hold the construction of a new tower in the city for 7,000 more employees; if the city passes the head tax, these new workers will cost the Internet retailer millions. Residents appear sympathetic to Amazon. At a town hall meeting on the proposal, they lambasted city leaders for “lax financial management” of the money that Seattle is already spending on homelessness and for the city’s failure to address the growing number of homeless encampments. A Times editorial observed that the city and county are already spending $200 million a year on homeless services and affordable housing to aid 5,500 people living on the streets and another 6,100 in shelters and transitional housing.

Residents laid the blame for the crisis on city leadership. “Your policies and what we’re doing to this city has unleashed chaos and crime on law-abiding citizens,” one speaker complained. Newspapers further noted that Amazon had already pledged around $10 million toward a homeless shelter to be built in its new tower. The raucous meeting, which one council staffer described as “shocking” in its anger, was only the beginning. Later, when a councilwoman who supports the tax tried to hold a rally outside of Amazon’s headquarters, construction workers crashed the event chanting, “No head tax. No head tax.”

And then there’s the municipal pension crisis. Just another detail in the city’s record of fiscal recklessness:

Left unsaid, but lurking in the fiscal background, is the city’s deep public-pension problem. Seattle has one of the worst-funded municipal pension systems of any major city, and its annual costs have been rising rapidly—from $40 million to $108 million over the last 10 years. Over the next decade, the city projects that it will have to dedicate about $850 million toward paying off the pension system’s debt—and that’s on top of nearly $600 million that it will cost the city over that same period to fund new pension credits that workers are currently earning.

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