Seattle Sisyphus: Reflections on Where We Are Today

A very smart and trusted colleague and I were sitting in the Neighbor Lady a few weeks ago. He said, “I think you and I, for the foreseeable future, are doomed to keep rolling a rock up a hill just to have it come rolling back down.” His reference to Sisyphus hit home, since from my introduction in 6th grade to the Greek myth of the man punished by forever rolling a rock up a hill but never to get it over has been etched in my mind. Really? Nobody in this town will ever use a calculator? Nobody in Seattle has the sense to stop and look at their attempt at compassion and the policies they are pushing for and see the two things as inconsistent? After the passage of the tax on jobs last week, it might be true.

Later this morning the City Council is going to pass a tax on every hour worked by employees in companies that have net revenues of $20 million per year, about 3 percent of the businesses operating in Seattle. The tax will generate, by City estimates, about $75 million per year, taxing each hour worked by employees at 26 cents an hour, hence the name, The Employee Hours Tax (EHT). Setting aside for a moment what might happen — loss of existing jobs and fewer new jobs created — think of the message such a tax sends: jobs are a bad thing that have a negative impact on our community and must be slowed and offset with a fee.

Taxes should do three things: collect money for public benefits, redistribute money in the economy, and encourage or discourage behavior. When we tax something whether we mean to or not, we send a signal into the economy that using that thing should be limited or avoided. Gas taxes and taxes on cigarettes are just such taxes. The higher tax should translate into fewer gallons of a scarce resource used and in the case of cigarettes fewer deadly things consumed. Meanwhile, the money generated from these kinds of taxes gets used for the other two purposes, paying for things the market isn’t producing like parks or road repair or cheap or free health care.

If, on the other hand, we want the economy to produce more of something to increase its use, then we’d tax it less, not at all or actually have a negative tax, a subsidy for its production and use. To me, this seems like basis stuff.

But here in Seattle, taxes are about punishment.

When your theory of taxation is that it should be used to exact a penalty on a bad actor or someone or something that has done damage to other people or institutions, then there is less concern about the signal it sends. In fact, in the case of the tax on jobs, there is outright denial that it will actually hurt while at the same time saying that it should hurt. The best example of this is the talking out of both sides of the mouth by tax advocates.

One side of Seattle’s mouth says that Amazon has killed off local businesses, wrecked havoc on the local economy by creating lots of high paying jobs. Those high paying jobs in turn create “skyrocketing rents” and economic growth which correlates to homelessness. That’s right, noted consulting firm McKinsey and Company produced a blog post about a study (nobody seems to have the actual study) that concluded that jobs were part of booming cities unintended consequences. The post commits perhaps one of the greatest fouls in argumentation and debate, confusing correlation with causation.

You see, as the economy grows, and rents go up so do the number of homeless people. More prosperity means that there will be more homeless people. That’s how it works. Therefore we need $400 million a year to build housing units for the homeless. Again, that huge figure apparently tracks to construction of units. How many years we have to pay the $400 million is unclear. Councilmember Lorena Gonzalez, after reading the figure reported by Crosscut and the Seattle Times cited the figure as proof, conclusive proof, that we…..wait for it….need to raise $75 million with the jobs tax.

Again, the sophistry used by Gonzalez is childlike but brilliant: You see, McKinsey and the Seattle Chamber of Commerce (who inexplicably paid for the study) say we need $400 million; we’re just asking for $75 million after all. I say childlike because it is the kind of argument a kid in trouble makes to a parent once caught stealing cookies. “I could have taken the whole jar, but I just took one for me and one for my friend.” That shows both restraint and altruism, right?

Meanwhile, David Rolf the relentless campaigner posted on Facebook this meme:

So while McKinsey says that the problem with housing and homelessness is caused by “swelling ranks of high-income digital workers,” the unions are saying that the workers are being exploited and are poor. Hmmm.

The argument for the tax becomes all about how huge the problem is, in fact, Congresswoman Pramila Jayapal says it is “a humanitarian crisis” which calls up images of war, famine, and natural disaster. Wow. A humanitarian crisis that could be solved according to the geniuses at McKinsey with $400 million a year. The need cited by the City is not just homeless which they say stands at 8,500 people but 29,000 cost burdened households earning 30 percent or less of Area Median Income (AMI).

All we’re asking for is $75 million for 356 units a year for a total of 1,780 units five years from now. Surely Jeff Bezos could afford that; he makes more than that in about 7 hours and most of his employees are on food stamps. But they’re also high paid tech workers “propelling” the crisis. Big businesses can afford this tax and they should pay it since, after all, they caused the problem in the first place. This amount we’re asking hurts those businesses just enough that they won’t change their practices. They can afford it.

So there you have it, a tax that is aimed at punishing a company that is damaging the local way of life and creating suffering but that will produce very little, if anything, that will actually ameliorate that suffering. The champions of the tax revel in wringing out Amazon, making them pay, because of the huge problem the company has created; yet, those advocates also say it won’t hurt a bit. And what do we get for all this: less than 5 percent of the units needed, five years from now, for the supposedly 37,850 suffering today.

Something interesting to note about Sisyphus is the question of why he was punished. From the Ancient History Encyclopedia.

He gained infamy for his trickery and wicked intelligence, but his greatest feat was to cheat death and Hades himself, not once but twice, thus living up to Homer’s description of him as “the most cunning of men” (Iliad, 6:153). In the first episode the king, after dying and descending into Hades, audaciously managed to capture Thanatos, the personification of Death, and chain him up so that no humans died thereafter. Only the intervention of Ares resolved the crisis, and Death was freed to pursue his natural work.

Perhaps Sisyphus is far too lofty a metaphor for me and my calculator.

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