Clear Fog Blog

Political musings from Warren E. Peterson

Do High Taxes and More Rules Hurt Job Growth?

Posted by Warren Peterson on March 25, 2013

According to Danny Westneat in Palm Sunday’s “Seattle Times”, capitalism is thriving in “Seattle with all its taxes and rules and supposedly socialistic groupthink…” He cites as evidence a “new jobs report” that shows “the city’s unemployment rate well below the rest of the state, to one of the lowest for big cities in the U.S.”

Let’s take “rules and socialistic groupthink” first. Two examples, the selected extension of metered on street parking to 8PM plus a sharp increase in rates and the requirement for businesses with a certain number of employees to grant paid sick leave. I seriously doubt companies like Boeing, Nordstrom, Starbucks, or the Port of Seattle or the University of Washington or most high tech or other major entities care about these Seattle Nanny rules. Many stay here and grow here because it is too expensive to move and they are attracted to Seattle by its location, transportation services, educated population and environment. There are some businesses, however, that are seriously affected by rules such as the two mentioned here. Ask the restaurant owner if such rules are taken into account when making decisions to expand, relocate to Seattle or hire more employees, same question for other small businesses.

And the reason for Seattle’s lower than most unemployment is? The answer according to Jon Talton’s column in the “Business” section of Palm Sunday’s “Seattle Times” – Amazon.

Oh, about high Seattle taxes. Yes, the city council is constantly looking for ways to increase revenue by new or higher taxes and fees but so far, at least for the big boys, they have not overcome the advantages of locating at the hub of economic activity in the state. There is also one other major competitive advantage to doing business in Washington State that was touted by Governor Chris Gregoire when she was encouraging companies to move here, no income tax.

Nice try Danny but there is a tipping point and Seattle may be close to it. Mr Talton notes that Amazon, like Boeing, could suffer a reversal of fortune. Should that happen we would wish Seattle had a more friendly business climate. Danny could be the last one to turn out the lights.

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