Guest post by Brendan Wright
I just found another scintillating read– the Bureau of Labor Statistics’ Consumer Expenditures 2019. There’s some very interesting take-aways. In fact, I’d go so far as to say that think I understand why many well-meaning baby boomers think (wrongly) that young people could afford homes if we just cut back on luxuries a little bit. It’s become a bit of a trope that your boomer relatives think that you could own a home if you just cut back on the avocado toast and Lulu Lemon pants. Aunt Linda probably thinks that way because she and Uncle Frank made similar sacrifices, and it landed them in a nice split-level ranch!
Food expenses– both dining and at home– take up 15.46% of contemporary household income. Let’s call it 15.5% to make things easy. Apparel and Services take up about 2% of household income. Healthcare takes up yet another 6% of our income. The median price of a new home in 2019 was $320,700, according to money-zine.com— Approximately 3.9 times the annual household income reported by the Bureau of Labor statistics.
I busted out another thriller– “A Century of Family Budgets in the United States”, also by those raconteurs at the Bureau of Labor Statistics. Table 4, “Historical Shares of Family Consumption” shows some interesting data for 1966– when Aunt Linda and Uncle and Uncle Frank were bright-eyed young things hoping to buy their first home. It lacks certain categories that the contemporary budgets have– like personal care. It appears to be a suggested budget, rather than what people were doing in the wild, but it’s based on actual income and expense data available to the BLS at the time. The BLS thinks that Uncle Frank and and Linda were spending 29.2% of their income on food, 10.3% on Clothing, and 6.4% on Healthcare. More importantly, the average household income in 1966 was $7400 (per Census.gov) and the average cost of a home was $14,200 (Doyouremember.com). That’s only 1.9 times average household income in their day.
If Aunt Linda and Uncle Frank were saving for 10% down on a home, they’d only have to save an amount equivalent to 19% of their annual income. If they managed to temporarily reduce the household food and clothing budgets by half– let’s say by thrift shopping, sewing their own, and eating less expensive foods– then they could free up 19.75% of their annual budget. In about a year of thrift, they could be walking into the bank and asking for a mortgage in one of America’s new suburban developments.
If a millennial wants to buy an average house right now with 10% down, they’re looking at saving about 39% of their annual income. (I didn’t factor closing costs into this, since I couldn’t find historical average closing cost estimates– but they aren’t cheap.) A frugal millennial who manages to spend half of the normal amount on food and the apparel/services category can expect to save up 8.75% of their annual income over the course of the year. In other words– they’re having to save about 4.5 times as long as Uncle Frank and Aunt Linda did. Emergencies can easily wipe out down payment savings before a would-be home buyer can use them to stabilize their housing situation. If your landlord decides to suddenly jack up your rent– common in many major cities these days– you might have to dip into those funds to pay for a deposit and moving van. Four and a half years is a much longer time to have to go without an incident.
I focused on food and clothing expenses because they’re usually the easiest for people to control. Costs decreasing in those areas mean that there’s less wiggle-room in millennial budgets. The big expenses tend to be harder to control– like housing or healthcare. Nobody asks their ambulance driver which hospital has the best prices on emergency appendectomies– they just care about getting to a place that can save their life. Housing is the big one for many young people, and there just aren’t a lot of good options in many areas. Many millennials dream of minimalist options like van life, but there are barriers– financial, social, legal, and otherwise– to get into tiny homes, van living, houseboats and many other off-beat alternatives. They’re not impossible, but they also aren’t easy and still have considerable costs.
Bottom line: Aunt Linda and Uncle Frank were playing on easy mode back in 1966.
Oh, relax already–and play a round of Millennial Millions. It’ll spare you a lot of reading.
Honestly–nice research, but what Dollars and Sense project inspired this post?
Yea, I remember my father lecturing me about how he and my mom got a crappy 2 bedroom apartment for $100/month to save up for a house when he got home from Vietnam in 1971. We adjusted for inflation in the early 1990’s, and I said…find me a two bedroom for twice that amount and I’ll take it. Now, in 2020, that $100 would be only $643. I Googled the prices for two bedroom in that town now….”The monthly rent prices of Two Bedroom Apartments currently available in Milford range from $1,050 to $4,900. Today’s average rental price for Two bedrooms here is $2,410.”
Yeah, Kate, it even gets worse from there, I did a report on this for an economics class most of a decade ago, and what really struck me then was the differences in taxation; Income taxes, consumption taxes, payroll deductions, land transfer taxes, processing fees… Not only has the price of homes in particular grossly outpaced income, but we’ve never kept so little of the income that we actually get. And while I haven’t kept my numbers up, I really doubt that it’s gotten a lick better. This is one of the (many) things Republicans are absolutely out of touch on: They need to stop harping on the American Dream if they don’t have a plan for people younger than Gen X to partake in it.
@Corso: in the 1950s the top federal income tax was over 70%. Now it is 41%.
Corso @3 the fact that you lump these all together problematic. I find suspect any discussion of taxation in the U.S. that does not begin and end with the fact that Federal Income Taxes for the wealthy (…nods to Görkem @4) and effective tax rates for corporations, with a few blips, have essentially been going down for over 50 years.
I suspect a significant portion of the increases you found were in regressive taxes and fees on the state and local level. To my mind, those are ultimately the consequences of decades of reductions in less regressive income and property taxes.
My personal experience in the U.S. was that, primarily due to the home mortgage interest deduction, when my partner and I went from being a poor graduate students to middle class home owners in around 2000, our effective tax rate plummeted. So, there were real problems with people too poor to buy their own homes being over-taxed in the federal system, particularly when you take into consideration the burden of regressive Social Security deductions on top of that.
So, again, the fact that the wealthy are contributing less and less to society over time is the root of the problem.
I guess I don’t understand your point… I grant you that the problem of over-taxation of middle to low income earners and the under-taxation of exceptionally high income earners are related, and probably have the same solution… But we’re talking about the differences between the ways Baby Boomers and Millennials interact with the housing market.
The fact of the matter is that Baby Boomers not only had a more attainable earnings:mortage ratio, but they kept more of their income because they weren’t taxed the same way.
And as to lumping it together… Yes. 100%. And we should. I’m not sure what the difference is between someone who earns $100 in a state with a zero income tax rate and an 11% sales tax and someone in a state with a 10% income tax rate and no sales tax, but I do know that it isn’t the amount of stuff they could buy.
I’m most familiar with Manitoban taxation, so your mileage may vary, But the average Manitoban making $60,000 would pay;
1.6% in EI (mandated employment insurance)
5.45% in CPP (mandated Canada pension)
14% in Federal Income Taxes
12.6% in Provincial Income Taxes
So before we even see our pay, 33.65% is deducted. Then;
Are applied to basically everything else we purchase, so functionally, we have about $0.59 to spend to get to the $0.66 we had after deductions.
And it doesn’t get better from there; this is the minimum amount people are taxed.
We’re talking about home ownership: If you buy a $300,000 home, which isn’t uncommon, The property tax rate is $19.86 per thousand, which works out to $5294 per year (There’s a $700 property tax credit, so ((300,000/1000*.1998)-700).) so if you’re lucky enough to own a $300,000 home with an income of $60,000, you pay 8.8% of your earnings in property taxes.
I got down to 50% without breaking a sweat. That wasn’t how Aunt Linda and Uncle Frank interacted with their earnings.
But, that’s not the way we’re taxed in the U.S.. Federally, we have income tax and payroll taxes. There is no national GST in the U.S.. Payroll taxes are pretty straightforward, but income taxes are mitigated by so many write-offs and rebates as to make the base rates virtually meaningless (earned income tax rebate, head of household, home mortgage interest deduction, medical expenses, work related expenses…the list goes on and on).
Sales taxes vary wildly state by state, but combined state and local sales taxes in the U.S. are well below the 12% GST/PST punch you get in Canada (no U.S. state goes into double digits, 5 have no state sales tax at all). Moreover, most do not tax groceries and many do not tax non-luxury clothing purchases. So, right there most ordinary people are not paying sales tax on a considerable percentage of their discretionary spending. Moreover, it isn’t as simple as piggy-backing, as some of these state income and sales taxes are deductable from Federal Taxes.
Property taxes are generally decided on the local level and vary dramatically as well. They are also offset (in my case they were much more than offset) by the home mortgage interest deduction on Federal Taxes.
Property taxes have also been falling drastically since the 1950s – although I am sure there are some local exceptions, the national trend is very clear.
Average disposable income (income after taxes, etc.) in 1959 (adjusted to 2012 dollars): $12,462.
Average disposable income in 2020 (2012 dollars): $47,650.
Admittedly, these are AVERAGE numbers; still looking for median numbers.
Kate, what you say does not apply everywhere in the U.S.
The states may not, but local governments certainly do. Where I live, the general sale tax is 10.25%. Some specific taxes are way, way over that, and you’d be surprised how little it takes for goods to fall outside the ‘grocery’ category. And there are cities nearby which make our local sales taxes look small.
The state income tax is separate. My wife and I, filling together, still reach a double digit tax bracket, and we are both workers, by the Marxist definition – i.e. we own no means of production, we sell our labor, etc.
I’m sure that you are right about the national trend, but that’s definitely not true in the part of California where I live. I pay property taxes on both the house in which I live, and on the vehicles I drive/sail. The former has historically increased, probably because the state can’t reassess the taxes of people who have owned their house for decades. The latter are not called property tax, they are called ‘registration fees’, but one of the line items increases proportionally to the value of the cars/boats.
In addition to this, on the last ballot there was a measure about a new 3/4 of a billion bond for one of the local colleges, and a choice to make an expiring bond for the other college permanent. Both of those are assessed on the property value, so it is another property tax.
By the way, I do not mind paying any of these. Our little group of friends are literally buying out a street in our city (we have 9 out of 12 houses already) We chose to live here. High property taxes make for one of the safest cities in Southern California, and a school district that has been often ranked the best in California.
I like paying taxes. They buy civilization.
As for the historical trend, it is simple. The very rich buy themselves politicians, so their taxes decrease, while the taxes are born by the professional class. The poor are taxed not because it makes economical sense, but to make the rest feel better.
Big picture, when is comes to housing, the increase in the price of housing relative to inflation is the primary obstacle to young people developing stable, independent lives in rentals and in saving up to become home owners in areas of the country where there are jobs. Obviously, in places where there are few jobs, housing prices are relatively depressed and the lack of jobs is the primary obstacle.
I’m skeptical that changes in tax rates contribute much to the obstacles that young people face in paying for housing in the US. I suspect that median real income has grown faster than aggregate tax rates. But I haven’t found any neat analysis of this question.
Instead I found a graph of the growth in the average rate of real disposable income—that is, income after taxes, adjusted for inflation—since 1959. Alas, that graph does not report the growth of the median income; massive growth among the wealthy skew the data. And I found a graph in the growth of real median personal income since 1974. Alas, that graph doesn’t account for taxation.
Combining a bunch of stuff, I’ve generated a graph of the growth of MEDIAN personal income minus AVERAGE federal/state/local taxes. It shows that median income growth outstrips the growth in the tax burdens.
Indeed, the graph understates this growth. The graph ignores the fact that many of our taxes are progressive, and thus we should expect people in with median incomes to pay less than the average tax burden. (However, the graph also assumes that everyone in the population–even a 1-yr-old–was paying taxes.)
With those caveats, here’s the bottom line: If we want to explain why people are having more difficulty affording something today than yesterday, we should probably look for some variable other than tax burdens. At least in the US.
So, what might help explain why young Americans have difficulty affording housing?
AmpBrendan identifies many.
AmpBrendan is also analyzing the cost of the average home today compared with the average home in the past. This is akin to comparing changes in price of the average car or the average health plan. There’s no mystery to why today’s stuff might cost more: today’s stuff is BETTER. The average house of today vastly outstrips the shoeboxes of Levittown. We’re comparing apples and oranges.
This fact might vindicate both parties: Yes, today’s young people inevitably have more difficulty affording the average house today than yesterday’s young people had affording the average house of their day. But if today’s young people actually seek to buy that average house, they are seeking a luxury product from the perspective of yesterday’s young people. Even if the AVERAGE kind of toast served in restaurants is avocado toast, you could still find regular toast if you looked for it.
3. Also, in yesteryear more people were living in rural areas and small towns–and those areas offered employment opportunities. Today’s young people prefer urban areas–perhaps because you can find more employment opportunities there. Thus we get into a supply and demand problem: It’s hard to invent more real estate in urban centers to match the demand. Principally, we can try to reduce zoning law restrictions.
But, to some extent, we observe high-earning people living in high-cost areas–and then turning over a substantial share of their high earnings to their landlords, and to government via taxes. Thus, they may not generate much more net worth than their peers who live in areas with lower salaries and lower expenses–except in Social Security, which is calculated based on their earnings, not earning after expenses.
[Edited by Amp to correctly attribute authorship.]
One thing to remember is that the stock of houses in the country doesn’t really change – and you add the usual number of housing starts every year, which doesn’t seem to be dramatically different.
Someone is living in those houses. Or the prices would come down. So you have the same number of people buying houses.
I don’t particularly think it’s that hard if you want to buy a house. Many lenders will work with you, interest rates are really low etc. But again, someone is living in all of the houses you see in the USA.
“I’m sure that you are right about the national trend, but that’s definitely not true in the part of California where I live. ”
Well strangely enough this is not actually a discussion about your personal circumstances.
I’m intellectually aware that the US, from an European perspective, is just a few dozen countries thrown together, but I am still amazed how different the perspectives in this conversation are from the reality around me.
No, the houses in the US are not all full. There are whole neighborhoods with row houses that are boarded up, there are whole counties with farm houses that have not had anyone living in them for decades, and there are whole housing developments that are sitting empty. I’ve personally walked through such places, respectively in Maryland, Colorado, and Arizona. The US has multiple states with more than a quarter of the houses sitting vacant. The estimate of the vacant houses, which doesn’t include total wrecks, is between 15 and 20 millions.
No, it is not easy to find a ‘regular toast’ house in every area. Existing home owners resist housing projects with tooth and claw. People who sublet or share housing are sought out and targeted for eviction. Local governments try to mandate affordable housing, and get defeated in court. There are a lot of reasons that the residents of specific neighborhoods do not want sub-million houses nearby, and they have plenty of tools at their disposal to keep it that way. And once such people get a foothold in an area, they attempt to displace even existing residents of affordable homes.
No, the state government’s taxes are not the only reason property in good areas can be very hard to afford. Municipal bonds, local sale taxes, home owner association fees, various charges, etc. add up. But even without any of these, there were a few years in which California collected more in property taxes than in state income taxes.
But all of this is peripheral. Once again, in this discussion, it becomes about identity politics – those filthy rich Boomers vs those poor misunderstood Millennials. Goddess forbid anyone brings class and political power into it.
From a different point of view, this is all about efficiency gains having been exclusively kept by employers, about unions having been declawed and subsumed into political machines that only give lip service to workers’ interests, and about professionals and blue collars workers having been set against each other by political parties that all serve those deluded voters’ masters.
Remember when the bright beacon of the American Left, while whoring herself to Wall Street bankers, was reassuring them that she held no loyalty to the middle class? With such champions in your court, why do you expect relief?
Aunt Linda and uncle Frank may have had some things easier, because corporative interests had not yet secured their choke-hold on politicians, had not yet muzzled unions, and had not yet perfected the propaganda machine that convinces plebs that their main problem is plebs with different skin pigmentations and gender identities out to get them.
Using averages and global trends, you can get a very inaccurate picture.
In some part of the US, there are millions of houses sitting empty, and there is no income to be had. In other parts of the US, incomes are high, but houses are still prohibitively expensive.
Use the averages, and every is A-OK. Use specifics, and it’s a disaster.
I have lived and worked in three different states, and had people in my department living in about 30 states. I bet I have a better picture of the state of affairs in the US as a whole than an average can offer. My specific circumstances are a data point. When someone makes a statement like “no X does Y”, one data point is enough to disprove it.
This discussion is full of statements that are simply wrong, or at best irrelevant. Yours was just one of them. Average disposable income means nothing:
– the 50s, the bottom 80% controlled 60% of the wealth
– nowadays, the bottom 90% control 30% of the wealth
“The estimate of the vacant houses, which doesn’t include total wrecks, is between 15 and 20 millions.”
According to the US Census, there are 14 million vacant housing units (see table 3). “Housing units” includes apartments, though, not just houses. And a house like mine with, with a basement apartment with a separate entrance, counts as two housing units. So although I’m not sure how many vacant houses there are, I’d expect it to be quite a bit lower than 15-20 million.
I don’t think it’s helpful for you to paraphrase what others on this thread have said, except recasting it in far more aggressive and insulting rhetoric. And there’s no rule that bringing in one kind of analysis (generational) means that the person is “god forbid” about bringing other kinds of analysis (class, political power) into it.
Also, please dial back your tone several notches. Thanks.
I don’t know who “the bright beacon of the American Left” is. I’m guessing you mean Hillary Clinton? But it’s not like she’s adored on this blog.
Going forward, please avoid the “whoring” language, which can be read as both misogynistic and anti-sex worker. Thanks.
I did not think of checking the month old census data before posting. The 2019 estimate was 17.4 millions, with a -/ two million margin of error.
Note that the census will not count buildings which the owner has not declared as housing, for example, when a family sells their farm to a farming corporation, nor condemned buildings, nor buildings that have been sold for redevelopment, but the project has staled. I know this for a fact, as the county I live in is slating old farming groves for redevelopment, and what used to be a farmhouses with multiple seasonal worker quarters is now classified as just land, no vacant residences.
So if you want to argue that 14.2m vacant housing units that are ready for occupancy, is SO far off from my 15-20m vacant houses, which includes ghost towns, abandoned farms, condemned row-houses, etc… Well, OK.
All I know is, in 2008, the company I worked for bought four houses in South Carolina because they were dirt cheap, and snapping the land up would allow us to close their access road, and install heat treatment facilities on it. The plant was sold in 2018, but I’m sure the new owner did not relist them as housing units for the census, especially since we cannibalized at least one for the bricks. Good bricks, too.
Yeah, yeah, my personal experience again. But that’s what’s happening in Boston, Charlotte, San Fransisco on one hand, and the South and the Great Plains on the other hand. You may be OK with living in a 70m² apartment, but no one is building those in expensive areas, because they much rather sell a single family residence with underground pool and a three car garage. And the locals do not want you there, either, if you do not have the millions it costs. At the same time, you can snap, for a pittance, a 3,000f² house with acres of land in Colorado or Idaho, but will have a hard time finding work within an one hour drive.
On, average, it looks great, though. Plenty of income, and plenty of housing.
With respect to vacant housing units, it’s not uncommon for people to own second (and even third, or more) residences that sit vacant for most of the year- for instance, my wife and I own a northern Michigan Great-Lakefront cottage that’s only occupied at the moment due to the fact my son-in-law is working from home (rather than his Manhattan office). The miles of lakefront in either direction is probably less than 20% occupied, and occupancy is probably even less when all of ‘up north’ Michigan is considered.
Does anyone know whether houses that are occupied for 50% (‘snowbirds’) of the year or less are considered “vacant” for the purposes of the statistics that have been cited?
The census bureau considers such houses “vacant,” but if you dive into the details (they have subcategories of different types of vacancies) you can separate them out from the others.
“All I know is, in 2008, the company I worked for… ”
There are always going to be people whose personal experiences run in the opposite direction of overall trends. It doesn’t prove anything. This is like an LGBT person or PoC saying they have never personally experienced discrimination therefore it isn’t a problem.
If you do not understand that “My city has 10 % sales taxes and my state income taxes reach 10 % brackets with just two salaries” is directly relevant to the statement “no U.S. state goes into double digits”, there is little I can say to convince you.
One single data point disproves a blanket statement.
In the same way, examples of vacant homes that are not included in censuses are relevant to the number of empty houses in the US.
According to the census, the number of vacant homes in Missouri has decreased by a factor of three in the last 12 years. Just from 2018 to 2017 the vacant homes decreased by 25%. What do you think is more likely? That Missouri’s experienced a population boom, or that a number of houses were taken off the list, because they are no longer habitable, or zoned as residences?
Or take Connecticut. It’s one of the fastest shrinking states. Yes, the population is actually shrinking, and yet, the number of vacant homes is also decreasing. Young, educated people are leaving the state, and its cheap, numerous houses, and going to places where housing is anything but affordable.
And finally, your example of increasing disponible income. Leaving aside the fact that a personal computing device, an ISP, a cellphone plan, etc. are not exactly optional if you want to be employed, or that charges and fees have risen in the 21 century, it does not matter than the average disposable income has increased. Wealth disparity has increased a lot more, and while the rich are gathering more wealth, and the professionals are threading water, people who are just entering the game may be facing problems unfamiliar to earlier generations.
As our company had locations all over the country, I know that real estate trends are completely different in different parts of the country. Before I got married, I was actually flying out, setting up POS networks in distribution centers and training employees multiple times every year. I’ve done in it places as different as San Juan, Baltimore, Charlotte, Austin and San Fransisco. I know damn well that my experience in Southern California is not representative of much. But I also know that if you average the data for Baltimore and San Fransisco, all you get is garbage.
“But I also know that if you average the data for Baltimore and San Fransisco, all you get is garbage.”
You really believe there is no place for national averages in analysis? Is it really impossible to make statements about the direction of American economics as a whole? That seems very dismissive.
For example, we can say that Kenya has a lower average income than the USA – but if we believe the USA’s average income figures are “garbage”, then does that mean that this comparison is also garbage, so we actually cannot say anything about Kenyan vs American incomes? (Perhaps we should consider the Kenyan average income figures garbage too, because it obscures the significant differences between Nairobi and Mandera?)
Costs of housing have gone up considerably faster than income has. When I was a grad student at an urban school, our professors were shocked that we were all paying AT LEAST half of our stipends in rent even with roommates and all the usual student rent saving stuff. They were under the impression that things were not too different from their grad student years, and had not adjusted their mental pictures of what affordable housing looked like or cost. And that is not considering that many people starting out have considerable school debt even before a mortgage comes in to the picture. It is not a surprise that young adults have problems saving for a house, or that older relatives are unaware of this. Who looks at prices of starter homes when they are not in the market for one (or need to know this for other reasons)?
It will be interesting to see if there is an impact from the pandemic-induced travel crash on housing prices in destination cities. There are more than a few cities where large swaths of apartment buildings are given over to short term rentals that would have been regular housing before the rise of Airbnb, VRBO, and the like.
The San Francisco 49ers get their name from the nickname of the people who came to California in the 1849 gold rush. Many of these people would acquire their supplies in St. Louis, Missouri, before making the long wagon ride west. And in the midst of this activity occurred the Great St. Louis Fire of 1849. One consequence of this event was a new building code that future structures had to be made of rock or brick.
Today St. Louis is famous for its … murder rate. Before that it was famous for the death of Michael Brown in the suburb of Ferguson, the ensuing riots, and the ensuing Justice Dept. investigation that found rampant discrimination and patterns of unlawful conduct by the police. The population of St. Louis has declined for decades.
With all that adversity, what assets did the city have? High-quality, well-aged bricks. Thus for the past decade or so, the city has experienced a rash of fires in unoccupied houses. The fire department comes and turns on the hoses, knocking the house to the ground—and nicely cleaning the bricks. And by morning, the bricks are all gone. Apparently Cleveland and Detroit are also seeing this pattern.
So this explains SOME of the loss of housing stock.
I’m wondering: Any proposed solutions?
Price caps on house sales? Government aid to young people in buying a house?
In the end, I think housing prices being too high are a supply and demand problem. There’s only so fast new housing can be safely built, and in areas of the country a lot of people want to live in, it takes many years (if ever) for the supply to catch up to demand. (That’s certainly true in Portland).
Price caps? No.
Government aid? That can be part of it. Our house was bought with the help of a (local) government program to improve the neighborhood by encouraging more owner/residents. (This was years ago). Buying through that program, iirc, meant that we had a lower interest rate on our initial mortgage. (I don’t see any reason to limit a program like that to young people, though.)
I favor looking for zoning laws that can be changed. Not all zoning laws are bad, but some are bad (or at least, do more harm than good).
Such as: Neighborhoods zoned as single-family-dwelling only (i.e., you can’t get a permit to build a new granny flat, or build a duplex, etc) are pretty common, and they eliminate one way affordable homes can be added relatively quickly. Oregon passed a law banning such bans last year; we’ll see if it does any good.
This year Portland passed a stronger version of the law, which makes it legal to build up to four dwellings on a single lot, or six dwellings if three are reserved for low-income renters. It also reduces required parking.
Zoning laws that make it hard to build single-room-occupancy buildings should also be eliminated.
The zoning stuff I just mentioned will directly help renters more than new homebuyers. (Although it will make it easier to build “cottage clusters,” making more new, small houses available.) But if rent is extremely affordable, that would bring the demand for houses down, perhaps lowing house prices. (And anyway, lowering rents is good for its own sake.)
Finally, if there are cities which have jobs available and relatively low housing costs, it might be worth it to subsidize grants for people to move to those cities. I know that some countries have done this as a way of fighting unemployment, but I don’t know if any such programs have ever existed in the US, or even if they’re viable here.
I’m sure there are other ways, but those are the ones I’ve read about. (That I remember offhand).
Here’s a graphic showing the some of the zoning changes Portland is making to zoning to increase housing density and (hopefully) make it more affordable.
The State of Illinois’ sales tax rate is 6.25%. Cook County is at 1.75%. The Regional Transportation Authority (covering Cook County and the counties contiguous to it) gets another 1%, and my municipality gets another 1%, for a total of 10%. So technically you are correct, but overall I’m paying 10% – and if I moved to Chicago it would be 10.25%.
When I moved here I paid $90K for my house. Property taxes were about $1.2K. It is currently valued at ~$290K. Property taxes are now $7.7K. The valuation has gone up 3.2x. Property taxes have gone up 6.4x. I assure you that I am not getting twice the State and municipal services I did back when I bought this place. The money in fact is going towards a desperate attempt to get the various public employee pension funds into some semblance of solvency. In an unaccountable spasm of public accountability my property tax bill has a table showing the various public employee pension funds’ projected liabilities and the percentage of funding needed to pay off those liabilities that they actually have. Most are below 50%, some down to 25%. When your liabilities are projected to be in the hundreds of millions or more for some of the funds (State, County, Township, Police, Fire, town/village, elementary school district, high school district, community college district, library district, sanitary district, mosquito abatement district, forest preserve district, etc.) that’s a lot of money.
Election News from the State of Illinois:
I thought you might be interested in a tax issue that was on our ballot. Illinois is a flat-tax State with regards to income – that’s baked into our State constitution. You pay 4.95% on your Federal adjusted income (the rate is NOT baked into our constitution), with a relatively few deductions. It was 2.5% when I moved into this State. A constitutional amendment was offered this election cycle that would have eliminated that and permitted the General Assembly to set graduated tax rates. The pro-“Fair Tax” argument was that the law that the GA passed in anticipation of it’s passage would only lead to an increase in tax rates for people earning $400K or more per year. Early polls had it winning handily. Then the opponents pointed out that it would allow the GA to change that in subsequent years, and since the State is in such bad financial shape the GA would quite likely raise taxes for the middle class soon. They also pointed out that 1) while the Governor had stated that he would propose a budget with spending cuts and property tax relief he had not yet done so, 2) in previous years various taxes and fees had been created or increased with promises that they would be dedicated towards specific debt reductions but in practice had not been spent on those purposes, and 3) that the placement of a constitutional amendment to permit adjusting public employee pension benefits downwards (for future contributions, not for existing ones) on the ballot, which would do much for the alleviation of the State’s financial crisis, was blocked by the GA.
The “Fair Tax” amendment lost, with 54% “No” to 46% “Yes” – it needed 60% “Yes” to pass. This in a deep blue State that re-elected a Democratic Senator in the same election and went 56% / 42% for Biden.
I don’t question the DoJ’s conclusions in the areas you point out. However, I do think it’s worth pointing out that it also concluded that Mr. Brown’s death was due to neither. His death was in fact due to his own bad actions and the need of the police officer involved to defend his own life.