^{Wealth & Poverty Review} Seattle’s Transformation Spawns a Long List of Problems

My wife and I returned to Seattle in early 1993 after nearly 23 years on the East Coast. We were delighted to come home. Our fair city was booming, with the qualities we always loved about Seattle still intact.

Over the past three decades, however, we have witnessed a steady erosion in the livability of both our city and our state. Today, Seattle bears little resemblance to its former self, and Washington is becoming a less attractive place to live or work. Consider a few examples:

Homelessness. In 1993, street encampments were virtually nonexistent. Today, they are widespread and growing. Yet city and county leaders continue to treat homelessness primarily as a housing issue rather than a symptom of untreated addiction, mental illness and broken relationships.

The new city budget calls for spending $349.5 million on affordable housing — five times the amount spent in 2019, yet outcomes have only gotten worse. King County now ranks among the highest in the nation for homelessness, and Seattle has the third-highest rate of homelessness of any city in the country.

Meanwhile, a large and costly bureaucracy has developed around a strategy that has not delivered results. It is time to reassess this approach and stop wasting taxpayer dollars.

Tax Policy. We constantly hear that Washington has one of the most regressive tax systems in the country. I would argue that our traditional model — taxing consumption rather than income — is fundamentally fair and effective. Under a sales-tax model, those who spend more pay more. People who make the most money spend the most and, therefore, are taxed the most.

If essential expenses such as food and housing are exempted (which can make up 80% of the living costs for low-income families), they would pay taxes only on those things they choose to buy. Unfortunately, Washington’s taxes on gasoline are some of the highest in the country, which disproportionately impacts low-income families and should be reconsidered.

Taxing consumption, not income, is the fairest system of taxation and that’s what we have or had. Historically, Washington’s tax system has generated sufficient revenue to fund its priorities while creating a favorable business climate. The budget mess we now face is a spending problem, not an income problem.

“Millionaires” Tax. We often hear that those who make $1 million or more per year should pay more in taxes. While many can afford to do so, the larger question is whether such policies serve the broader economy.

The Puget Sound area has long been a place where entrepreneurial risk-taking was rewarded — leading to the creation of hundreds of thousands of jobs in our state by companies such as Microsoft, Amazon, Boeing, Costco, Starbucks and Nordstrom.

High earners are often business founders, investors and employers. They come up with ideas, take risks, create jobs, drive innovation and contribute to economic growth. Instead of penalizing success, public policy should encourage it.

Housing. Seattle and King County face a real housing shortage, which has driven prices beyond the reach of many residents. Proposals to add 4,000 subsidized housing units address symptoms rather than root causes.

The central issue is constrained supply. Lengthy permitting processes, regulatory barriers, financing hurdles and costly requirements all limit the pace and affordability of new construction. To increase housing availability, we should streamline regulations, improve efficiency and allow the private sector to build more rapidly at lower cost.

Education. We frequently hear that schools need more funding. Yet despite increased spending, student outcomes continue to decline.

Clearly, the issue is not just financial. Washington teachers are among the highest-paid in the country, but compensation does not ensure success. Instead of focusing on increasing school funding, let’s demand accountability, performance and outcomes — ensuring that investments translate to better results for students.

Energy. Washington once enjoyed some of the most affordable and reliable energy in the country — an important advantage for both households and businesses. That advantage has disappeared.

Policies aimed at transitioning to greener energy have increased costs and reduced reliability without achieving any meaningful environmental goals. Moreover, a recent in-depth study by the Discovery Institute concluded that net-zero energy policies in the Pacific Northwest will cause typical residential and commercial customer energy bills to increase by more than 450% by 2050.

It would be hard to develop an economic plan that would be worse than the plan this state and city have followed during the last decades. Washington has now lost its competitive advantage in energy and has compounded that by losing its competitive edge for business by enacting massive tax increases. Businesses and individuals are taking notice.

Seattle and Washington were once among the most desirable places in the country to live, work and build a future. That reputation was earned through sound policy, economic opportunity and a high quality of life. It can be regained — but only if we are willing to reconsider the direction we’re heading and make meaningful changes.