Should cities raise taxes to create affordable/free housing for the homeless?

Seattle is being transformed. Over ten years, the city has added 220,000 jobs, which is an increase of about 15 percent–and Amazon is a big part of it. The online giant has 40,000 Seattle employees, and uses about a fifth of the city’s best office space.

Thirty-one Fortune 500 companies have also moved to Seattle; up from seven in 2010.

It’s estimated that 60 people move to Seattle EVERY DAY, which marks the city’s fastest population increase since 1900.

With that, it’s facing insane real estate prices, traffic nightmares and the third-worse homeless rate in the country.

The city council had a solution to move their growing homeless population out of tents and off the streets by taxing the businesses that were largely responsible for the booming real estate prices.

Was that a good decision? Does big business need to pony-up and help out with a crisis it helped to create? Or is that the job of the government?

Let’s talk.

Big business like Amazon and Starbucks shouldn’t be forced to pay more than the taxes they already shoulder.

they’ll move

It’d be pretty easy for businesses to avoid the tax by moving. To help make that point, Amazon stopped its construction of a new downtown office building until the city council repealed the Seattle tax.

they’ll use more automation

Jobs are switching over to automation already, and a tax for each employee could push businesses to move toward that even faster–like McDonalds did. When minimum wages went up, McDonalds replaced employees with kiosks. 

they’ll use more contractors

Another way to get around the tax is to get employees off the payroll and employ contractors. These jobs typically eliminate benefits like health insurance, sick leave, paid time off, and retirement plans.

Someone needs to help, and big businesses have deep pockets.

businesses drive up housing costs

Well-paid workers living in the city drive up housing costs, leaving low- and moderate-income people unable to afford increasing rent prices. With the tax, the city could put $50 million into affordable housing, making the area more desirable for everyone.

no income tax

Income tax is a way of redistributing wealth, and ten states have chosen not to have one–including Washington. Seattle suffers from this loss of state-collected revenue.

the role of the federal government

Western cities have experienced an epidemic in homelessness — in Los Angeles, for example, homelessness is at an all-time high and ranks number one in the country.

San Francisco has the second-highest rate of homelessness in the country. Seattle is third. Since 2015, 10 or more cities on the West Coast have declared states of emergency with regard to homelessness.

busing as a way to address homelessness

In 2015, the Guardian reported that cities regularly bus homeless people to other lower-cost towns. Influxes of homeless people put a strain on these more limited social services and smaller tax bases.

But, they wrote, when homelessness is viewed as a local problem, there’s plenty of incentive to buy one-way bus tickets–which means the federal government might need to step in to help.

cost of homelessness

About 3.5 million Americans will be homeless at some point, but only about a half-million are homeless at any given time, and about 87,000 of these are chronically homeless.

Housing a homeless person and providing them with a caseworker costs about $10,000 a year.

So, for less than a billion dollars a year, chronic homelessness could be ended in the U.S.

If temporarily homeless people were also housed, and if each temporary residence were occupied half the time, homelessness of all kinds could be eliminated for about $10 billion a year. That’s less than a seventh of what the government spends on food stamps. 

Be the first to comment

Let's Talk