A Message about Negative Externalities to the Competitors for HQ2

One of the things that is never considered when large firms try to extort subsidies is the fact that with additional jobs, they bring additional costs, and when you give into blackmail, the costs outweigh any benefits.

The good people of Seattle, who have learned about the downside of being a one industry town from the travails of Boeing in the 1970s, and now the Seattle City Council has voted unanimously to institute a head tax on large firms in order to pay for the costs that they impose on everyone else:

Following months of debate, raucous protests, and a threat from Amazon to erase 7,000 jobs from Seattle, the City Council on Monday voted to pass a head tax to fund housing and homelessness services.

The tax, which passed unanimously, is nearly half the size that four city council members originally proposed in April. Under the plan, Seattle would collect $275 per employee from businesses grossing more than $20 million in annual revenue, or about three percent of the businesses in the city.

The tax is projected to bring the city about $45 million of new annual revenue in its first year, according to a spending plan prepared by council staff. Under the legislation, council members would have the option of renewing the tax after five years.

Now the bill heads to Mayor Jenny Durkan’s desk. In a statement, she says she plans to sign the legislation. “This legislation will help us address our homelessness crisis without jeopardizing critical jobs,” Durkan said.

The tax proposal represents a compromise between city council members who aimed much higher—$500 per employee to raise $75 million—and their colleagues who believed the initially proposed rate would be too costly for businesses. Mayor Durkan fell in the latter camp. Late last week, she put her support behind a $250 per employee tax.

Amazon achieved market dominance with a deliberate strategy of tax avoidance, its treatment of employees is horrific, and Jeff Bezos has aggressively campaigned against anything resembling an income tax, meaning that he has to a been a major cause of the problem, and a major impediment to any potential solution.

My position is to tell Amazon to go f%$# itself, though I do understand how most politicians would not find this a good campaign strategy.

Enough with paying off parasite billionaires in the vain hope that they will scatter a few crumbs before us.

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