What would you do if you controlled an unpopular, unreliable public service that was being displaced by the private sector? It would make sense to restructure your service to make it more popular and accountable. You might stop wasting money on propaganda against your rival. You might even ask those who use your service to pay more for it.
Instead, the D.C. City Council has decided to punish Uber and Lyft for selling a better service than the antiquated Washington Metropolitan Area Transit Authority can provide.
“Uber and Lyft are part of the transit system here, and so they should help pay to fix Metro because they’re benefiting from Metro’s demise,” said council member and Metro board chairman Jack Evans.
The city raised its tax on ride-hailing services from 1 percent of gross receipts to 6 percent. Council Chairman Phil Mendelson said of the 500 percent tax increase, “We’re talking about a fraction of pennies here.” (It actually adds 60 cents to a $10 ride).
It also continues enabling Metro’s failures by inflicting extra costs on competitors to sluice more money into the failing system. Metro doesn’t have to improve or attract customers to get this extra lucre.
If the council’s stupidity drives you to drink, that will cost you more too. The tax on alcohol bought at liquor stores will rise by 0.25 percentage points, along with a general sales tax increase from 5.75 percent to 6 percent. Plus, commercial properties worth more than $5 million are getting a 15 percent property tax hike.
All that to prop up an increasingly irrelevant transit system that in 2017 had its lowest average weekday ridership since 2000.
Will Metrorail riders actually get any better service from their extra tax liability? Don’t hold your breath, because the trains are either delayed or not coming. Metro’s operating hours are the shortest of a major subway system in the country, and to accommodate sports fans, the city relies on the generosity of a foreign government to keep the trains running.
Washington, D.C., doesn’t have the worst local governance in the country for, thankfully, Mayor Muriel Bowser and most of the city council oppose a ballot initiative to do away with the tipped minimum wage. The accolade for worst city government surely goes to Seattle.
Despite having an acute housing shortage — Seattle has the ninth-highest median home prices in the country — the city council didn’t consider the obvious solution of allowing more houses to be built. Instead, it imposed a job-killing “head tax” that will charge large businesses $275 per full-time Seattle staff member. In case you hadn’t guessed, the council is made up of eight Democrats and one member of the Socialist Alternative party.
Amazon is reconsidering its long-term commitment to Seattle. “We remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses,” one Amazon VP said.
Starbucks isn’t happy either. One Starbucks VP said, “This city continues to spend without reforming and fail without accountability.” Sound familiar, D.C. Metro riders?
The tax, plus a $15 minimum wage on large businesses and a slew of other meddlesome innumerate measures in Seattle make one wonder why any company would go or stay there.
Cities should not target specific industries or businesses with tax hikes or, for that matter, tax breaks. Broad-based taxes are best, and user fees should fund services where possible. Even if that means Metro has to increase fares — several members of the Washington Examiner’s editorial board commute on Metrorail — it will be worth it, as long as Metro’s leadership and city politicians are held accountable for failure.
No one likes paying more in taxes. With proper governance, they shouldn’t have to.
