Forbes writer: Seattle’s head tax won’t fix anything

A Forbes contributor is saying that the Seattle City Council’s proposed head tax an “absurd” idea.

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“The council is not functioning as an organization that can operate or run the city,” Seattle for Growth Director and Forbes Magazine contributor Roger Valdez told KIRO Radio’s Dori Monson. “I mean, we’d be better with an algorithm running it than those nine people.”

The tax, which the city is promoting as a “progressive tax on business,” would collect $75 million from the top-grossing businesses of Seattle (those that gross $20 million per year or more) and use the funds to combat homelessness in the city.

The city plans to build about 1,780 units of housing over the next five years. However, Valdez pointed out that, according to the most recent count, there are 8,500 homeless people in Seattle.

“They’re basically saying, ‘Wait for five years and maybe we’ll give you a unit,'” he said. “The fact is, they need help right now, and that system isn’t working … It isn’t compassionate.”

The head tax would apply to about 500 businesses, charging them 26 cents per employee per hour. For a business that has 100 employees, such as Seattle’s Merlino Foods, this calculates to over $54,000 per year. Safeway — owned by Albertsons — already stated that it cannot sustain such high taxation and would likely have to relocate.

“My concern is that they’re going to take $75 million a year … grocery stores, for example, are going to shut down in areas where there is a lot of poverty, people that have no access to grocery stores,” Valdez said.

Urban areas that don’t have easily accessible grocery stores with fresh produce are referred to as food deserts. Valdez believes the head tax will only increase food deserts, specifically in low-income areas, thus preventing people from getting healthy food.

“I’m concerned about the effect it’s going to have on the consumer,” he said.

All of these negative impacts, he said, would be the cost of a program that, in actuality, would do very little to get 8,500 people off the streets.

“They’re gonna shut down grocery stores, put people out of business, and produce 356 units a year, maybe,” he said.

“There’s nobody downtown doing the math,” he added.

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