What could they possible expect? Surely, they did not believe companies would just pay the taxes, right?

Seattle payroll tax revenues fall short by $47M

Seattle Mayor Bruce Harrell released his payroll expense tax (PET) report for 2024 Tuesday, and its projections came up nearly $50 million short.

“Today’s announcement that PET revenues collected in 2024 were $47 million lower than projected requires action to ensure our budget remains balanced,” Harrell explained in a statement.

Harrell said that his 2025 budget proposal was based on the projections from the independent Office of Economic and Revenue Forecasts. But since they got it wrong, the mayor said for the 2026 budget, “my office will consider all options, including additional revenue sources and appropriate expense reductions, to ensure we are making the priority investments and funding the essential services that matter to our residents.”

Did the payroll expense tax push jobs out of Seattle?

The payroll tax is levied on large corporations in the city, like Amazon and Expedia. Such a steep revenue forecast error suggests high-paying companies or their jobs are leaving the city.

It’s precisely why KTTH host Jason Rantz called the news “catastrophic” in a thread on X.

“What people haven’t realized yet—but soon will—is that the sharp drop in payroll expense tax revenue means jobs are leaving Seattle,” Rantz explained. “The whole point of the PET was to squeeze ‘free’ money out of businesses because the city arrogantly assumed it held all the cards. But what did PET actually do? It pushed Amazon jobs to Bellevue, kept employees working from home (and out of Seattle), and helped fuel layoffs at companies hit hardest by the tax—like Expedia.”

Jobs are leaving Seattle

Even Harrell acknowledged, “This decrease in revenue is aligned with recent reports of major employers moving thousands of high-paying jobs out of Seattle to other cities in our region.”

And, of course, next they will try to push jobs completely out of the state:

He noted that the Seattle payroll tax idea may go statewide with the budget proposal from Washington Democrats.

What’s next?

Republican State Rep. Chris Corry of Yakima took notice of the payroll woes in Seattle. He posted, “Paging literally everyone in Olympia.”

I just can’t believe they would deliberately kill their geese laying the golden eggs. Hence, I have to believe they really are that stupid. And since they are incapable of learning they are going to double down on their mistake.

I recently finished Judy Shelton’s book Good as Gold. Today I ran across this article about her: Trump’s former pick to join the Federal Reserve has proposed a radical solution to solve inflation (msn.com).

I have never even taken an economics class, but I found her book ideas interesting. Among other things it outlined a way for the U.S. and the entire world to ease into a gold standard. Since gold reached a new all-time high today.* The idea of returning to a gold standard has more than a little bit of attraction.

As the article points out she is also an advocate for a target of zero inflation. The article is more than a bit down on that idea. But if I were President Trump, I would set up a debate. The debate would be between Shelton and a couple opponents of her zero-inflation suggestion. A compromise of a target of 1% inflation would still be beneficial. It would provide useful data about the utility of zero or near zero inflation.

* Or, the dollar hit a new all-time low.

If the 159 countries number is true, this could be interesting.

159 Countries Set to Adopt BRICS New Payment System (watcher.guru)

Amid the alliance’s continued efforts to create a SWIFT alternative, the economic alliance has sought to create its very own BRICS payment system. It will play a major role in the alliance trade dealings. Specifically, allowing unilateral settlement to be done without the need for the US dollar.

The move is poised to be vital for the bloc and participating nations, and it appears there will be a lot of them. According to one Russian official, there are already 159 countries seeking to adopt the system currently. With a potential launch coming in October, it could have massive global market ramifications.

I’m not an economist, I have never even taken a class on economics. So maybe my concerns are imaginary, but I could see a large number of those dollars being used by other countries returned to the U.S. How many dollars?

Currency in Circulation | U.S. Currency Education Program (uscurrency.gov)

As much as one-half of the value of U.S. currency is estimated to be circulating abroad.

…

As of December 31, 2020, there was $2,040.7 billion in circulation, totaling 50.3 billion notes in volume.

From that same source we find that in 2022 there was $2,259.3 trillion in circulation. Using a bit of extrapolation and rounding we end up with about $1.2 trillion outside the U.S. in 2024. So, what happens if a substantial number of those dollars come back to the U.S.? It would seem to me that just one or two percent ($12 to $24 billion) would cause noticeable inflation. And then what? More people/countries would want to get rid of their dollars before they lose value due to inflation. It is a run on U.S. goods and property (land) to get something for those dollars. It is the dump of $1.2 trillion dollars all wanting something for their rapidly decreasing in value dollars. The GDP of the U.S. in 2023 was over $27 trillion. But GDP:

aggregates all private and public consumption, investment, government outlays and net exports.

The export portion of our GDP is about 10% of our total GDP, or $2.7 trillion. Not all of that $1.2 trillion would go into exporting of goods, but half or more into the export market would make for “interesting times.” And it would happen, as Ernest Hemingway famously said about bankruptcy, “Gradually, then suddenly.”

Prepare appropriately.