The post-pandemic path to economic perdition

The post-pandemic path to economic perdition

Some great writer of some great era once said something along the lines that when it comes to temptation, while discretion points out the impropriety of certain conduct, inclination typically urges on ruin.

It’s an instructive aphorism as public policy makers continue to study the economic damage from the ongoing coronavirus pandemic and undoubtedly struggle with what do to about it.

Many a government, big and small, have seen their tax receipts plummet. And though jobs are returning and tax coffers have begun to fill again, budgets will take a good deal of time to recover.

But even then, the question remains if those receipts will match pre-pandemic levels because of business closings and still-reduced business operations.

Sadly, however, too many governments’ default position will be, instead of curbing their insatiable appetite, to raise taxes. And that’s exactly what the “progressives” running the show in Seattle have done.

As The Wall Street Journal reports, the city council there has decided to impose a new, and hefty, tax on employment. It’s called the “JumpStart Seattle” tax.

Sounds a lot like the failed – thankfully – Regional Renaissance Initiative ‘round our parts nearly a quarter-century ago. Its backers then promised they could and would tax our way back to prosperity.

Only this time in Seattle, the brain trust — a better moniker would be “brain rust” – has more than quadrupled down on a since-repealed 2018 head tax totaling $47 million.

As The Journal reports it, and effective when the bells ring in 2021, about 800 businesses with annual payrolls higher than $7 million will pay a tax of between 0.7 percent and 2.4 percent on all salaries over $150,000.

As the newspaper reminds and opines, government jobs are “of course” exempt. Ahem.

And how will the expected annual tax receipts of $200 million be spent? On “affordable housing, Green New Deal projects and other progressive dreams,” The Journal says.

That is, “affordable housing” paid for with a tax that disincentivizes the creation of well-paying jobs and funnels scarce tax dollars to envirocratic boondoggles that stand to markedly increase the cost of energy while doing virtually nothing to combat “climate change.”

Who knows what else “progressives” will find to “jump start.” But it surely won’t be Seattle’s economy.

The new tax (which has a 7-2 veto-proof majority on Seattle City Council) is so radical that even “progressive” Mayor Jenny Durkin has “significant concerns” about how the tax raid will affect “the city’s ability to rebuild an economy.”

Nonetheless, one council member insists that zip-tying real growth by raising the cost to do business in Seattle (and, thus, getting less of it) will make the city’s economy “more robust and resilient.”

Consider that mindset the equivalent of the proverbial washing with the towel and drying with the water.

“Resilient,” by the way is one of those “progressive” buzzwords (firmly embedded in the lexicon of Pittsburgh Mayor Bill Peduto) that is nothing more than Orwellian double-speak.

Obviously, there are better tacks to helping municipal economies recover from the pandemic, some short and some long term.

Local jurisdictions can act by tightening their belts. And for those (typically the in-government “those”) who insist government budgets already have been cut to the bone, stop drinking the Kool-Aid.

But state legislatures and Congress must act, too.

“Prevailing wage” laws (that pay the union-set wages) and “contract labor agreements” (a fancy name for extortion) that inflate the cost of public works projects must go.

The strike “right” of public transit workers and public-school teachers must go, too. For far too long it has been an automatic de facto wage multiplier for rife inefficiencies for which taxpayers have paid an unacceptable premium.

And competitive bids must be allowed on every public service that every municipal jurisdiction now operates – and with no poison pills that coddle the public unions’ cartel.

Too much time has been wasted for too long in enacting these commonsense government reforms that will pay dividends to the taxpaying public that has been footing the inflated bill for too long.

The coronavirus pandemic should be the ultimate call to action. For continuing down the road to “progressive solutions” is the surest path to economic perdition.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).