Is this Carly Fiorina ad the worst political ad of all time of this year? Yes, but of course, the year is young.
So much fail, so little time. Is it the way Fiorina suggests that good fiscal conservatives are mindless sheep? The way she attacks Campbell for deficits while simultaneously attacking him for supporting tax hikes that might have ameliorated them? No, truly the best part of the ad is the Demon Sheep Itself:
Be afraid. Be very afraid.
Incidentally, the title of this post comes courtesy of Cake:
I still can’t imagine anybody who owned HP consumer harware over the past decade looking at the quality of that equipment and saying “y’know what? I’ll vote for the person responsible for this.”
In the ’90s, HP was a name that resonated with scientists and engineers… and under Fiorina, they spun out the high-quality scientific equipment into a new company, and used their brand name to shovel out crap. She turned the proud HP into a less-popular version of Dell.
I respectfully disagree. I’ve been very satisfied with my HP purchases. Admittedly I was disappointed that there was so little development of the S.P.E.W./house elf thread, but I guess that just leaves more to the imagination.
HP makes awesome b&w high speed laser printers that are inexpensive compared to the alternatives. The HP4250 is one of the best of all time. Fast, reliable & durable – you can’t ask for more. It’s replacement seems to be pretty good, too.
Their PC’s, however, I’m not a big fan of. Too many problems to be worth the effort.
Hm. I don’t know the players here (I know OF Carly Fiorina but not anything about her politics). But just in viewing the ad:
Is it the way Fiorina suggests that good fiscal conservatives are mindless sheep?
It seems pretty clear to me that the ad is portraying the voters as sheep if they vote for Tom. Given the way that people vote for the Combine candidates in Illinois I’d have to say it’s a viable comparison.
The way she attacks Campbell for deficits while simultaneously attacking him for supporting tax hikes that might have ameliorated them?
You seem to neglect considering that there’s alternatives to raising taxes to ameliorate deficits. A fiscal conservative doesn’t raise taxes to deal with deficits, they reduce spending.
No, truly the best part of the ad is the Demon Sheep Itself:
That’s for sure. I LOVE the Demon Sheep!
When people ask me about how I work with Scouts I often say “subtlety is wasted on 12-year olds.” I’d say the same for political campaigns.
And WTF do those guys have against goats?
That ad was truly awesome, particularly the last shot of the guy’s butt as he crawls away in his sheep costume.
Demon sheep aside, it’s not actually a bad attack ad: if you’re a “fiscal conservative” then you’re supposed to be voting against all tax increases, voting against all deficits, and solving any problem by cutting services/benefits. Raising taxes is a no-no.
This is a real thing in the world? And not something from the Onion? Hilarious.
Isn’t the Cake song about the separating the sheep and goats thing that Jesus is supposed to do? “As you did for the least of these,” etc. etc.?
Totally. The problem in the context of California is that something like 75% of our budget spending is non-optional, thanks to California’s initiative system … so even if we were willing to try and close the gap with cuts alone, I’m not sure it’s even possible.
—Myca
RonF’s interpretation of the sheep is probably what the ad was going for, but I’ll admit the whole time I was watching it, I was thinking “Who the fuck do the sheep represent?” It’s confusing because Campbell is the highest and best sheep, who then falls from the pedestal, so it’s not immediately apparent the sheep are the voters, as opposed to a type of politician.
The ad also never mentions Fiorina, except in the paid for by. I think it’s a problem to hint at who the better choice is but not actually tell people who should get their vote.
Demon sheep was the best. I think my favorite part is around 2:50 where it seems to be licking the ground or something. This right before we see his butt as he crawls away.
Part of my sensitivity to that is that we just had our primary here in Illinois this Tuesday past. The Chicago Tribune has been running features for months about how our elected officials have been servicing their own personal interests instead of those of the people and how the electorate has generally talked big but done nothing about turning them out. Understand that they’re not talking about liberal vs. conservative interests, they’re talking about officials that hire their own relatives and campaign contributors, sit on tax assessment boards while being members of law firms that practice in front of those boards, etc., etc. They’ve been exhorting people to get off their a$$es, read up on the issues and vote.
It was a mixed bag. The Senate seat that Pres. Obama held was up for election – a very liberal Democrat will run against a liberal Republican. The Tea Party folks are not at all enthusiastic about the Republican. My guess is that unless they can hold their noses and vote for him he’ll lose. But if they can, he stands a reasonable chance. The seat is not a lock for the Democrats by any means.
Patrick Quinn, the Democratic gubernatorial incumbent just barely beat out a challenger by 0.8 percent. As you may recall Quinn succeeded to his position after his predecessor was impeached, but I’m dissatisified with him because while he’s run as a reformer all his life he has done little to oppose the existing power structure now that he can. The Republican gubernatorial candidate has as of this moment yet to be decided – a candidate from Downstate favored by the Tea Party movement who got little MSM coverage and who was outspent 5 to 1 by each of his other two main opponents leads his closest challenger by 406 votes out of 750,000 cast. That’ll probably go to a recount.
The other most striking contest was for Cook County President. Cook County Government’s budget is greater than about 1/3 of the States, IIRC. It’s rife with cronyism and corruption. The incumbent succeeded to his position when his father, then the incumbent, had a stroke just before the last primary, refused to release any medical info, won the primary, and then quit and promoted his son to the candidacy. His son claimed that he would not run the office the way his Dad did; he’d lower the payroll, stop corruption, etc. Once elected he proceeded to add about 1700 people to the payroll, many of whom were relatives or relatives of friends or contributors, and so on. He also led the Cook County Board to raise the Cook County sales tax to 10%, the highest sales tax in the nation I”m told. Afterwards some of the board had a change of heart, but the Board’s bylaws require a 75% vote to override the Board President’s veto (and you thought 60% for a cloture vote was un-democratic). It got so bad that the Cook County Democratic Committee did something unheard of – they refused to endorse the incumbent for the Cook County Board. They refused to issue ANY endorsement for the office.
Anyway – in a 4-way primary he lost, getting about 13% of the vote making him dead last. Preckwinkle won with 49% of the vote. So there was one victory we can all cheer. The “sheeple” are starting to cast off their fur coats.
Myca, is there a convenient way to summarize what in California’s budget is non-optional and what is not? And is any spending “non-optional” if the state simply doesn’t have the money to spend? If both raising taxes and borrowing money require approvals that are not forthcoming, spending gets cut.
I’m sure there is, but I couldn’t do it with a little googling. I’ll look more later.
Well, what non-optional means in this case is that the voters have mandated that we ‘spend money on x’ or ‘spend x amount of money’, and the California legislators simply don’t have the authority to change that.
The other side of the problem is that the California Republican Party is one of the most extreme in the nation, in terms of saying no to taxation … and raising taxes in California requires a 2/3 majority, which the Democrats do not have.
When you add “you MUST spend $20 a month,” “you only HAVE $15 a month,” and “you are not ALLOWED to make more than $15 a month,” you get to where California is now.
Well, in that the state is very close to declaring bankruptcy, yes that’s true.
What has been happening as a stopgap measure is that all state employees have been given ‘furlough’ days and their pay has been cut by 10%. Buuuuut, back at the beginning of the month, that was ruled unconstitutional.
So now? I don’t know.
What NEEDS to happen is a constitutional convention for California that will hopefully do something useful with our stupid initiative system and move our budget to a simple majority approval, but I’m not hopeful.
—Myca
Better like this:
http://www.youtube.com/watch?v=VvclTQcF5uk
Thanks for revealing this awesomeness to me, Jeff.
Can you give me an example of a citizen initiative-passed law that forces the State to spend $x for a given purpose? I wonder what proportion of the budget is based on such, what proportion is based on legislative acts and what proportion is based on government union contracts and associated benefits.
It’ll be interesting to see what California does. In fact, what would be most interesting would be if California does, in fact, go bankrupt.
If an individual goes bankrupt their debts get settled for some discount off of their face value and they start over. What, then, happens when a government declares bankruptcy? Are it’s legal obligations wiped out? Maybe that’s what would force the Constitutional Convention you think the State needs.
As far as your budgeting process goes; you state that you need a 2/3 majority to raise taxes. Do you need a 2/3 majority to pass a budget that doesn’t raise taxes? Or only a majority vote?
It seems it’s 2/3 majority to pass any budget.
This is a pretty good post on the evolution of the 2/3 majority from a history blog I like.
Right. It’s just that the California Republican legislators have taken a blood oath to nevereverever vote for any tax increase, so the 2/3 majority for a non-tax-increasing budget is not a problem.
I mean, look, our Republican governor has had a couple of good-sized public moments of exasperation about this.
—Myca
This paper is skeptical of the contribution of the initiative process to the budget deficit, but contains a chart of spending mandated by initiatives. It’s kind of old – from the 03-04 budget year. He estimates that a little more than 30 percent of the budget is locked in by initiatives. He also says most of this money would have been spent anyway, though obviously that’s up for debate a bit in a fiscal crisis like the one California is in now.
When looking at these numbers, it’s important to remember that not every initiative mandates an actual dollar amount but mandates that a service be provided or a policy followed and that has fiscal impact. If a service is then cut, you end up in court over whether the state is complying sufficiently with the intent of the initiative, etc. Also, policies put in place under initiatives cannot be changed by lawmakers, no matter how much they cost. For example, a lot of states have offered early parole to reduce prison costs. Can’t do that in California for anyone who falls under three strikes, you’re out.
So the dollar amounts in this chart (Table 2 from the paper) will be different than what they are today and some of them will be subject to interpretation. Amounts are in billions.
Prop. 98 Education 30.000
Prop. 10 Early childhood development 0.522
Prop. 99 Tobacco tax [funds for anti-smoking, wildlife, research] 0.509
Prop. 21 Juvenile crime [for prisons] 0.428
Prop. 184 Three strikes and you’re out [for prisons] 0.300
Prop. 116 Rail bonds [authorized $1.99 billion] 0.131
Prop. 36 Drug treatment 0.120
Prop. 70 Natural land preservation bonds [authorized $776 million] 0.042
Prop. 117 Wildlife protection 0.030
Prop. 103 Auto insurance [administrative spending] 0.023
Prop. 97 Cal/OSHA 0.013
Prop. 50 Water projects bonds [authorized $3.44 billion] 0.007
Prop. 9 Political reform [California FPPC administration] 0.003
Prop. 132 Gill net ban [enforcement spending] 0.002
Prop. 86 Toxic discharge [enforcement spending] 0.002
TOTAL
32,132.262
Sure. California Proposition 98, passed by the voters in 1988, requires minimum funding of local schools based on local population, cost of living, and a few other factors.
For this past year, the minimum is $49.1 billion.
Or a more recent example: Prop 1A, a high speed rail initiative from 2008, costs 9.95 billion.
Now, look … no legislator, Republican or Democratic, and no Governor, Republican or Democratic, can legitimately spend less than that. To do so is unconstitutional.
And there are a lot of these.
And we can’t raise taxes to pay for them.
—Myca
Oh yeah, and our prison spending is pretty fucking inviolate. Keep in mind that the 2009 budget cut $8.6 billion from public education, but did not touch prison spending.
As of Schwarzenegger’s most recent budget, incidentally, we’re spending 2.something billion under the prop 98 education minimum.
—Myca
And don’t forget that California’s property taxes, on both residential and business property, are artificially low thanks to Prop 13.
So what’s the end result likely to be? Will the Dems eventually support cutting benefits and support a constitutional amendment that lets them do that? Will the Republicans eventually support raiding taxes? Or will both sides continue to stand firm and watch the state end up in BK?
Honestly? That.
BK=bankruptcy, I presume.
Again then I ask – if the state goes into bankruptcy, then what? Is there any precedent for this? In Illinois there’s been a couple of towns that have ended up in bankruptcy. The State took over law enforcement, etc. Eventually the government of the town reorganized. But that’s a town. Would the Feds come in and take over? Interesting ….
So, Myca, that paper chingona cites claims that only 30 percent of the 2003-04 budget was fixed by initiative – and much of that money would have been spent on the purposes so defined anyway. How much has that changed in the last 7 years? Because otherwise it would seem there’s still plenty of leeway for the legislature to make revenue and deficit neutral changes in the California State budget. Not pleasant changes, certainly, but changes nonetheless.
I think that part of the failure here is that the California legislature refused to politically recognize a plain reality – the U.S. economy (not to mention the world’s economy overall) never has and never will continuously expand. Like the dream that Daniel interpreted for Pharoah, the economy expands, then contracts, then expands again. The length and spacing of these changes, but the change itself seems to be inevitable.
If government expands services when times are good without putting any money away for a rainy day, then it should expect to have to contract services when the inevitable economic downturn comes. People who are financially productive are not going to be willing to turn ever-increasing amounts of the product of their efforts over to the government, especially in times when the rewards for their efforts are themselves contracting.
Oh yeah, and our prison spending is pretty fucking inviolate. Keep in mind that the 2009 budget cut $8.6 billion from public education, but did not touch prison spending.
That’s interesting. I remember hearing about that, but I didn’t dive into the details. What was the rationale on that?
I’ve noticed that whenever a governmental unit is backed up against the wall by the electorate’s refusal to provide more funds, somehow government officials always find highly visible and emotional places to cut funds. They generally threaten stuff like school funding, instead of, say, consolidating some departments and firing some administrators. Cutting school funding isn’t management, it’s hostage-taking. Of course, if they consolidate some departments and fire some administrators and workers they are throwing friends, contributors, campaign workers and relatives out of work and are threatening someone’s political base. It’s way more important to preserve those than to ensure that the schools are adequately funded.
Elusis:
Interesting phrasing. Do you own property? Proposition 13 (IIRC) sets a ceiling for property taxes, but I’m curious as to how you arrive at the terminology “artificially” low? Is there some natural level of property taxes?
My observation of the effects of property taxes and their utilization in Illinois leads me to believe that they should in fact be kept low or even non-existent. I base that on what happens to school funding. In this state schools are mostly funded out of property taxes. That means that locations with low property values don’t have a strong tax base to use to fund the schools. That means that the schools can’t maintain and upgrade their facilities and materials and pay their teachers as much as locations with higher property values. So people with money move out, and property values go down as living in the town becomes less desirable that towns with good schools. That drops the property values further, funding for the schools goes down even further, and the whole thing implodes in a negative feedback loop until you reach the floor of what the State provides out of the General fund, which is inadequate.
Understand that this is not me saying “OOOOOO taxes is teh bad”. Schools have to be funded. Unlike some conservatives I see a role for government in education – although I think it should be tilted back towards the States and municipalities and away from the Federal government. No, I’m talking about the model of taxation, not the total amount.
Ron,
I’d say a couple things on the spending side. 30 percent of the budget to be fixed seems to me to be a not insignificant amount. But beyond whether it’s a lot or a moderate amount, what it does is it prevents you from looking at the budget as a whole and making the most logical or appropriate cuts. I mean, I don’t know what gill net enforcement is and I’m sure it’s very important, but maybe during a crisis, they would want to scale back gill net enforcement instead of cutting a more essential service, but they can’t.
As for the prison spending, I know that California’s prisons are notoriously overcrowded, and I think there are a lot of court orders related to fixing that (can someone back me up on this? I don’t have time to Google it. If I’m pulling this out of my ass, someone please speak up) and related to prison conditions. A lot of California prisoners have been outsourced to other states and private prisons, and the amount the state is paying is fixed by contract.
And with three strikes, a third felony puts someone away for life. So you’re paying the room and board for 30 or 40 years for someone who stole $1,000 worth of crap and there’s absolutely no way out of it. No one can look at this person’s record and say, well, their record isn’t violent, let’s parole this guy. That’s huge and that’s cumulative.
there are enormous problems with california’s huge prison system. the system is drastically overcrowded after decades of “get tough on crime” measures. the entire prison system is under a federal receivership because of its inadequate health care for inmates. the prison guard’s union is one of the most powerful political forces in the state. california has cut programs that might reduce recidivism, and has one of the highest rates of re-offenders in the nation.
this is a disaster that has proven resistent to fixing. here is an article about folsom prison, which touches on some of the issues: http://www.npr.org/templates/story/story.php?storyId=111843426
here is a page from the UC berkeley institute for governmental studies, focused on the prison guard union but also mentioning other challenges: http://igs.berkeley.edu/library/htCaliforniaPrisonUnion.htm
here is an LA times article from last fall, concluding that the prison system is collapsing under its own weight: http://articles.latimes.com/2009/aug/20/local/me-prison20
here is a washington post article from a few years ago, also lamenting the state of the system: http://www.washingtonpost.com/wp-dyn/content/article/2006/06/10/AR2006061000719.html
here is an up-to-the-minute article about the release of prisoners shifting burdens to communities that do not have resources to cope — part of california’s temporary budget fix has been to raid funds that would go to local communities: http://www.nytimes.com/2010/02/05/us/05sfprison.html
Thirty percent certainly is not insignificant, to be sure. But I’m going to guess that a good deal of that would in fact be spent on the purposes mandated by the initiatives anyway, so the actual amount that you’d ever change that by would be less than that 30 percent.
Gill net enforcement probably involves restricting or banning their use in certain areas and fashions, as use of gill nets in fishing is notoriously non-selective and can threaten non-target and endangered marine species including not just fish but reptiles and mammals (e.g., seals and porpoises trapped in them will die when fish would not).
I also wonder what the financial impact of “3 strikes and you’re out” – should be “3 strikes and you’re in”, eh? – actually is, considering how many people are involved, and how many of them would have been incarcerated anyway even without that law. Interestingly enough Gov. Quinn here in Illinois tried releasing a bunch of prisoners to save money. A number of them (not actually all that many, mind you) immediately went out and committed crimes. It almost cost him the primary we just had.
So my point is that that 30 percent has less real effect than a full 30 percent of the budget, and the legislators have seventy percent of the budget to play with yet. It seems to me that the electors are telling their legislature “balance the budget, and don’t cut spending in these areas”. If over 70 percent of the budget is unrestricted then the legislature can balance the budget. That may mean that they have to cut spending in areas that you don’t favor. But the people have spoken, and that’s democracy, isn’t it?
People on here frustrated with the actions of the Senate with regards to the Administration’s healthcare plan proposals have considered it anti-democratic and have suggested changes to it’s rules to make it more so. Well, nothing’s more democratic than citizen initiatives. Beware what you ask for, you may get it.
here is a link to california’s prison law office’s page on recent news: http://www.nytimes.com/2010/02/05/us/05sfprison.html
In my opinion the problem with California property taxes is that they are distributed inequitably.
Basically, once you buy some property in CA, your rates only go up at the rate of 1% per year. This means that when I bought my house, the mean assessed value on houses (in our town) was about $100,000. We bought one of the cheapest houses available, and it was $360,000.
This gives a huge advantage to people with Money, as they never sell property, and (as housing values go up) pay a smaller and smaller percentage of the costs that are needed to maintain a community. This is made worse by laws that allow one to pass one one’s house to one’s children (or grandchildren) without the house being reassessed.
One of the many other things that irritates me about prop. 13 is that it requires any new property taxes to pass with 66% of the vote of the people (if done in a proposition), but prop. 13 did not pass with 66 % of the vote.
Side effects of Prop 13:
When it passed, commercial real estate paid 50% of the property taxes, It now pays 20%.
Retired people generally can’t afford to move to a smaller house, (as their property taxes might go up 10-fold) so fewer family-friendly houses enter the market, driving up housing prices, making the disparity between old and new money even larger.
New companies often find it difficult to move into towns to compete with other companies. (Macy’s was paying twice as much as JC Pennys in 1991)
which is anti-competitive.
It can be argued that I benefit from prop 13, as the sales price of my house has tripled in the last 15 years, while my property taxes have gone up only about 20%. However that also means that, after adjusting for inflation I am now paying less taxes than I was 15 years ago. I am capable of looking at the numbers and seeing that this is unsustainable.
Would I vote to repeal prop 13? Yes.
The property taxes are a “last man on the island” concept. While they’re neutral in language, they effectively overtax immigrants to the state and/or those who are new to purchasing property, while preserving the wealth of those who already own it.
It’s a bit bizarre. But until 66% of the people in California own property which is subject to the higher tax, it may not get changed. Mathematically that’s a near certainty to happen eventually; perhaps someone can predict when.
That may also happen with other things. The incumbent power structures in CA have done an excellent job of not only securing their position through influence, but of securing their position by changing the rules to make themselves less liable to attack. It may take a whole scale flameout for those structures to be dismantled.
So in one respect, it might be good for CA to finally get “broken,” if it led to fixing some of its problems. In another respect, there would be a lot of collateral damage in the process, I suspect primarily to the less well-off.
I’ve become really pessimistic about our ability to address problems before they reach complete and total meltdown stage.
Mike addressed the property tax question pretty effectively – they don’t track with the increase in property value, which exploded during the dot com boom. And corporations are disproportionately benefitting from the ceiling, as are historically wealthy families who pass along under-taxed property via inheritance. So the rich get richer.
The prisons are an additional stranglehold on the CA budget beyond the mandated 30% or so.
Oakland itself is far worse; one of the local blogs estimated that after mandates, police, and fire contracts, less than 20% of the city budget was even available to the city council to have any say over distributing?
The flip side of the property tax argument is people living on fixed income. In addition to helping the wealthy it helps the elderly and people on low incomes who happen to live in an area with rising property values. Sucks to buy a house, live there forever and than find out you can’t pay the taxes now that your neighborhood is cool.
But then you have acquired massive equity, which you can either 1) borrow against, or 2) sell the house and benefit from.
i think that joe’s point about people with fixed incomes benefitting from california’s post-prop 13 property tax scheme is the one that sold it in the first place.
but it makes no financial sense for the state. and elusis is right — with values having gone up over the years, those folks who have owned for a while have a lot of equity.
we’ve had our home for 14 years. as far as i can tell, the value is close to 3 times what we paid [even after the housing crash]. no, i wouldn’t be that happy with triple the property taxes all of a sudden — but i also would not think it unfair.
of all the bad initiatives, prop. 13 was one of the worst, with huge and longlasting effects.
More to the point, there’s no rational reason to prefer “fixed income 10 year resident” over “fixed income 2 year resident,” seeing as they’re both citizens and taxpayers and voters. Yet the law functionally does that (note: 10 years is a guess, insert the appropriate number.)
We’ve got the freedom to move around in this country. As I once said to a town administrator who was giving me shit for being a recent resident: OK, then, I’m happy to cede some of my citizenship rights to the locals. how much of a tax rebate are you offering?
Generally, I agree with you, Sailorman.Legally a resident is a resident, and that’s as it should be. I do think that’s there’s an interesting conversation to be had about encouraging long-term residence in a community rather than urban nomadicism, but that’s an ‘in addition to’ conversation, not an ‘instead of’ one.
—Myca
I think there’s a legitimate concern around the issue of people on fixed incomes in times of rapidly rising property values, but I also think there are much more targeted ways to help those people without distorting the tax burden the way Prop. 13 sure seems to.
But then you have acquired massive equity, which you can either 1) borrow against, or 2) sell the house and benefit from.
But that’s the last thing that someone on a fixed income wants to do. If you’ve acquired equity in your house through rising property values, then the values of what you’d want to buy have gone up as well and unless you’re downsizing there’s no benefit – and much cost – in leaving. And as far as borrowing – why would someone on a fixed income want to take on debt? How do they pay it back?
This is what I’m worried about. My wife and I bought a quite modest home, a tri-level with 1700 square feet of space. We bought it for $90K back in 1986. The changes in the neighborhood have been such that my house is a teardown, which means that if I sold it, probably for 2.5 or 3 times what I paid for it, the new owner would tear my house down and build on the property.
The increased value leads inevitably to a concomitant increase in property taxes. Add to that a propensity for local government to increase services and thus taxes and my property tax payment is close to my mortgage payment. If taxes keep going up, by the time I retire I may well not be able to pay the government enough money that it will let me stay in the house I worked so hard to buy and pay for. Selling won’t do me any good. What will I buy that I will be able to afford to stay in?
That’s gentrification in sheep’s clothing.
Oh, sure, it may be driven by something other than white people moving into a city filled with nonwhite people. But that steep rise in property value is the same driving force:you can’t afford to own your house any more.
No it doesn’t.
Property taxes are calculated by a mil rate, and the mil rate is set after the budget is set. Your property taxes are NOT related directly to the value of your house, but are actually equal to (value of your house as a fraction of the total town assessed value) * (total town tax.) If your house goes up 10%/year and so do all the other houses, then any increase in property tax is due to a TAX increase, not an ASSESSMENT increase.
From a capitalist perspective, why should we care that you can afford to stay in your house, or your town for that matter? You can just move. Sure, you don’t want to move. But frankly, lots of people don’t want to do lots of things. At least you’re being forced to cash in on a windfall, rather than being forced to LOSE your investment.
I mean, really: You buy a house, you presumably gain all the benefits of home ownership which aren’t available to non-home-owners (credit issues, tax deductions, etc.;) you maintain those benefits for years; and your worst complaint is that you have to move and sell for a significant profit? As positions go, yours isn’t an especially sympathetic one.
Sailorman, you pretty much nailed my response.
I cannot figure out what set of values is represented by the idea that someone should be allowed to accrue an increasingly-valuable asset to themselves that they should be legally protected from having to sell by artificially depressing its maintenance costs (not “the cost to maintain the property in good shape,” but “the cost to continue owning the asset”) and thereby increasing the overall costs to others who don’t own the asset, but they’re not values I ascribe to, nor values I can find any justification for in the Constitution.
I mean, if I bought a very low-mileage, gas-guzzling car back before oil prices shot up, I might have found myself in a position where the increasing cost of gas would force me into a decision about whether I should try to sell my car. But it would be wildly inappropriate for me to suggest that society shouldn’t make me pay gas taxes because doing so was going to interfere with my ability to continue to afford my asset. And that’s a case wherein, unless my car had become collectible or something, its value would have inevitably *decreased* over time!
I have bought two houses in my life thus far, and lost money on their sales both times. I have zero compassion for anyone who owns a house that has appreciated in value who could opt for a sale that would result in enough money to buy another place to live and perhaps even a profit for themselves. Perhaps I fail to comprehend the sentimental attachment of “but we’ve always lived in this house” since, due to divorce and remarriage and divorce again, I moved around many times as a child. But nowhere in the Constitution do I find any kind of right to maintain one’s sentimental attachments at the expense of others’ well-being.
Tea Bag Party types seem to like to get worked up about how their money shouldn’t go to subsidize anything for anyone else (you name it: schools, health insurance, whatever) because they’re utterly unconvinced that there are any benefits to them of having a social safety net in place. (In total disregard of the fact that red states tend to receive more subsidies and benefits than they collect in federal taxes, while blue states tend to receive less, so who is subsidizing whom again?) Well frankly I’m repulsed by the idea that my tax money should in part prop up other people’s sentimental attachment to extremely valuable properties.
Which I think is, in large part, a red herring anyway: There are a lot of rich people who are not “Grandma who’s in danger of being on the street if her taxes get re-assessed fairly” who benefit from this law. And let’s not forget that Prop 13 applies to corporate property as well, so I’m not only subsidizing Grandma staying in her big ol’ house in Piedmont that she bought for $20K back in 38, but I’m also subsidizing Pixar’s campus in Emeryville that is increasing substantially in value now that Emeryville is gentrifying.
Maintenance cost?
The money and time it took to climb up on a two-story ladder, rip out rotten boards, tar paper and shingles, repair the flashing and replace all the torn out stuff with new materials is a maintenance cost. Taxes are not maintenance costs. To define them as part of “the cost to continue owning the asset” is to attempt to hide their nature. If my financial circumstances get to the point that I cannot maintain my house I ask for no sympathy. What process is more artificial than the imposition and collection of taxes?
The set of values being represented here is the concept that people have the right to profit by the results of their efforts and that it the duty of the State to ensure that people should be secure in this. I don’t challenge that taxes are necessary. But using them to take property from one private party and cause it to be conveyed to another private party solely to ensure that the State increases it’s revenues perverts the role of the State.
First – the name of the movement is “Tea Party”. When is the left going to grow up and stop trying to attach sexual innuendo to the name of this group?
Second – the number of people involved in or sympathetic to the movement who hold the kind of position you describe is in my experience very small, probably fewer than the outright Marxists, Communists, et. al. on the left. Sure, we could each throw quotes at each other from extremists the other’s side, but that is essentially anecdotal. Cite a source that shows that the position you state is held by anywhere near a majority of them.
From a capitalist perspective, why should we care that you can afford to stay in your house, or your town for that matter? You can just move.
Hmm. To me, that sounds strikingly similar to arguments against sexual harrassment laws or protections against racial discrimination—“you can just get a different job voila! problem solved!” Realistically, if it were that easy, if RonF. or another hypothetical person being forced out of their home due to gentrifying could find another affordable home within a reasonable distance to their work, this wouldn’t be a topic of discussion—moving would just be a minor irritant. That isn’t the case. It also isn’t the case that these instances always involve people making a windfall on their home—sometimes, it involves predatory gentrifying landlords that buy up properties with the intent of letting them fall apart; when the neighborhood then gets labeled “blighted” by the city fathers, the remaining holdouts can have their properties condemned under eminent domain (and receive an engineered “market rate”), while tax dollars flow into the arms of wealthy developers in the form of grants for “redevelopment projects”.
‘Nother words, folks with money and power crushing the folks without the money and power. That fits in pretty well from the capitalist perspective; from from a sustainability perspective, not so much. Do we really want cities to be enclaves of the wealthy, with the common working folks using up fossil fuels to get back and forth to work? Because that’s what we have now, and there isn’t much public will to invest in public transportation out here in flyover country. Even Chicago has had a hell of time getting funding for its aging el system. Downstate? Fuggetaboutit.
Realistically, that so-called windfall that comes with the home sale gets eaten up in transportation costs within a year or two. Remember, it’s not just the person forced into the home sale that bears a cost. The environment also bears a cost as more people are forced into lengthy commutes.
(keep in mind I’m writing from the rust belt, where the cost of owning is significantly less than the cost of renting—and that’s fairly common out here.)
Maintenance costs add to the value of your home. The land presumably stays pretty much as it is; the physical home degrades in relative value yearly (much like a car) unless you maintain it.
I’m not sure why you would try to make a distinction here.
And I would also note that your distinction favors the wealthy again. If you own property with a brand new well-built house on it, LEED certified perhaps, then you have comparatively low maintenance costs although your taxes may be high. If you own a piece of property with an old falling-down house on it, then you have high maintenance costs although your taxes may be low. Why should the first person get financial benefits, and not the second one?
But you DO have the right to profit. Profit away: sell your house, and move to Wisconsin or something. A relative of a friend just bought a house somewhere in the Central US–brick house, two bedroom, 12 acres, stream on the property–for $120,000. You just don’t have the right to profit AND ALSO do other things you want. Welcome to the world of choice.
that’s not what they’re used for.
The first part: “take property from one private party” is what taxes ARE.
The second part: “cause it to be conveyed to another private party ” is simply a collateral effect, and not a goal of taxation.
Not really. Sex harassment or discrimination are per se bad. We’d all be better off if neither of them ever happened. Moving isn’t necessarily a bad thing and the country wouldn’t work very well if nobody ever moved.
You make a lot of arguments below about whether the collateral effects of moving are good or bad. I agree with some and not with others. But I think that the overarching point I’m trying to make is that ALL these things–choice or not–both have consequences. It’s a zero sum game.
If you enact a lot of rules which restrict certain sales in order to give benefits to the “right” people working at the “right” jobs and living in the “right” areas, then you’re limiting choice fairly severely. If you act protectionist towards existing residents (“don’t evict the people who grew up here!”) then you’re making it harder for NEW people to move there.
And the reverse is also true. If you make it easy for new people to move there (“don’t screw over people just because they didn’t grow up here!”) then you’re increasing the likelihood that existing folks will lose their homes.
While I find it fascinating that RonF would be arguing AGAINST capitalism and the effects thereof, my main argument is really that I think it’s oh so tempting to limit the free movement of people–even rich people–because they don’t seem ‘local’ enough. But i think it’s a very important part of our economy and our nation.
Wait a second: Are you trying to set this up as a right?
Arguably people have a right to housing, as in “not to be homeless.” Even that isn’t entirely clear.
But they sure don’t have a right to OWN housing, much less to “own affordable housing within reasonable distance of the job that they personally prefer to have.”
I know people who live where they want, but they generally made serious sacrifices (job choice, life choice, etc.) to get there. I know people who work at exactly the job they want (“Lemur Portraits!”) and they make other tradeoffs.
As I said to Ron: Welcome to the world of choice. Often you can choose to live where you want, or work where you want, or have a short commute, or have a house that you like, or own, or rent, or come home at 5:30 every day, or have a four day workweek, or make some money, or avoid having to invest time and money in your training. You just can’t do ALL of those things at the same time.
So you can own a house. You can own an affordable house. you can have a short commute. You can own a house that you like. And you can work at the job that you want. most people don’t get to do them all.
Many friends have a longer commute and make more money than I do. Other friends live places that I don’t like, but pay less mortgage than i do. and so on.
It shouldn’t be common for long. If you can rent for more than your ownership carrying costs (mortgage, taxes, maintenance, etc.) then pretty soon someone will wise up and start buying houses. Then they’ll rent them, figuring that in 30 years they’ll have a “free” house.
So if rentals are staying more expensive than ownership, something is tweaking the market. Rentals should generally not be that much higher than the monthly carrying costs for the property, plus (sometimes) a premium to reflect the tied-up investment in down payment, etc. If rentals go way up, then sales prices should also go up, because people can buy and then rent.
If I may make a stab at summarizing the attitudes here, then, taxes are to be considered a cost of ownership no different than the costs of physically maintaining a property.
It seems that you all feel that the interests of the State override the interests of individuals. Apparently the State’s highest priority is maximizing tax revenue and need not consider the impact on individuals in considering whether or not to raise taxes to as much as it can get.
As far as choices go, in fact I have exercised choice a number of times; for example, turning down particular jobs because I did not like the commute. But these are choices freely made. Taxes are not something I have much of a choice about. They have increased greatly since I have come to live here.
How can you say this? Of course you have the right to own housing. Work hard at something people will pay for, earn and save money, and go buy housing. With the money in hand no one has the legal privilege to deny you from doing just that. Of course, if you don’t have the money you’re not entitled to own housing regardless – no one has to provide property to you if you can’t afford it. But black, white, male, female, hetero- or homosexual, you have a right to own housing. Everyone does.
I ask your pardon. In this instance I used the word “profit” in a more philosophical sense, not in the strictly financial sense, but in context that certainly isn’t clear. Let me rephrase, please:
The set of values being represented here is the concept that people have the right to benefit from the results of their efforts and that it the duty of the State to ensure that people should be secure in this.
It’s up to me to determine how judge what’s most beneficial to me and how I allocate my resources to maximize such benefit. As you point out, I may wish to move to shorten my commute, or to live in a more peaceful neighborhood, or to be closer to a travel nexus. But property taxes are an artificial imposition. It is the State interfering in that decision. The State has no business raising taxes on people’s homes to the point that people are faced with being forced to move. Blaming this on rising property values and millage sounds more like a politician’s attempt to avoid responsibility than anything else. In the face of rising property values the government’s failure to lower the millage rate is a raise in taxes. We see it here in Illinois in the reverse situation. Property values are falling. Are property taxes falling? No. Hell no. The various taxing bodies simply raise the millage so as to make up the shortfall. Want to bet the millage rate doesn’t come down when property values start rising? Taxes are taxes. If the government is collecting more taxes than it did a year ago then it’s raised taxes. If you’re paying more taxes this year on your property than you did last year then your taxes have been raised. How that’s calculated is moot.
I don’t understand this comment at all. Property values are certainly a function of capitalistic principles. Taxing property based on those values at all and then raising such taxes to the point that people get faced with the choice of either selling their property or having it confiscated by the State and sold against their will to satisfy the tax bill is hardly capitalistic – if anything, I suspect it’s socialist. It certainly does not honor the concept that the ownership of private property by the populace is a cornerstone of American society and is something to be encouraged and defended.
RonF says:
In California, if your property value falls below the assessed value of your house, you may submit a form to lower your assessed value. The government must respond within some time limit (months IIRC) or you win by default.
There are (of course) some slimeballs who run businesses where they flood local county offices with these requests, thereby driving up the cost of government, and (if they succeed in swamping the offices) lowering the government revenue.
This is one of the hazards of running the state by initiatives, where (for the most part) only wealthy groups can afford to get enough signatures to put something on the ballot, and run the subsequent campaigns.
Washington (state) also lowers the property tax bill when the assesed value goes down.
Property taxes are no more of an artificial imposition than the prices of gas, or food, or medicine. In all cases, the groups providing that have to provide some goods and services, and those cost them money. If you find that the good and services provided by Whole Foods are too expensive, you can drive further, or choose to buy worse quality food elsewhere. If you find that the goods and services provided by Atherton are too expensive, you can move to Milpitas, or buy a less expensive house.
The belief that the expenses for government should never go up (or should only go up at a predictable rate) is as ridiculous as the belief that the price of gas or medicine should never go up (or only go up at a predictable rate).
The changes in cost could be buffered somewhat if government would actually save when we have a surplus rather than spend, but since there is also a very strong contingent that looks at a surplus and says “oh, we must give the money back to the people”, any efforts to save the money seem to be doomed.
Ron F responds to
with
Ah, I think I see the difficulty.
Ron, in California we don’t tax property based on it’s value. We tax property based on the value it last sold at.
Since our state has doubled in size since that law passed, this means that a fair amount of property is taxed at less than 10% of it’s value.
A few of points
Is California really so messed up that there’s no way to pass any sort of property tax increase? I don’t mean that no one ever votes in favor of it, that’s a seperate problem. But I live in Michigan. Taxing authorities can and do hold referendums to raise the millage rates. There are a lot of rules and restrictions but it’s not unheard of. The city I live in today is facing a budget shortfall due to falling home values and an increase in foreclosures. They want +1.9mill increase and I’m pretty sure it’s going to go through. I like this system. If the city wants to raise taxes it asks the people that vote for permission. Seems workable to me. Maybe our laws are better written. But I don’t know.
You seem to be using ‘Owns a Home’ as a synonym with wealthy. But let’s look at the people who benefit from homestead exemptions.
-Wealthy people whose hose increases in value.
-Elderly people on fixed incomes
-Working class people who have seen their wages stagnate / keep up with inflation -over the last 20 years while the housing market boomed.
-Everyone else that buys a home and stays there for a while
I have no idea what percentage of all home owner make up each category. But elimination of a homestead exemption would not target just the wealthy. As a matter of fact, they would be the ones most able to absorb tax increases. It would harm them the least. If you did it slowly over time it would just make it harder to own a home as the total cost of ownership climbs.
There are a lot of advantages in having some stability in the pricing. I know that my tax bill will go up (or down) by no more than 3% each year. I can plan for it. I don’t have to worry that a 20% spike in home prices will use up the money I wanted to spend on my kids pre-school. Also, this has actually helped a lot of places becuase it puts a 3% floor on how much property tax payments can go down. Again, michigan not california.
But lets say my taxes go up and I can’t afford to pay them anymore.
I could move,
-costs 6% in realtor fees.
-takes 1 day to pack a house, 1 day to move all the stuff, 1 day to unpack. Several hours to sign the papers. Call it 3.5 days of lost wages/vacation time. And those are BUSY days. nights and weekends before those days are spent getting ready.
-I’ve never pulled off a move yet that didn’t have a lot of little charges. Truck rental, boxes, moving pads etc.
-Everyone can move themselves. No one’s physical condition would require them to hire movers at 80$ an hour.
-That increase in housing prices happens in an entire neighborhood. I suppose there might be places where you can downsize the cost of the house without going very far. But from my experience that means you just lowered your standard of living often in a big way. More likely I’d choose to move further from where I work/live now and deal with the commute.
Now, this isn’t the worst thing in the world. But it’s not nothing, and I thin on balance limting property tax increases to some plan is a good idea.
mike, you seem to know how cali works. Am I correct that a given city/county can’t pass a special assement? And that the assessed value never goes up? That’d be just dumb. Inflation is real. i get that the cost of government services may go up faster than inflation, but i have no problem with a system that requires the city to ask for more money when it needs it. There should be some link between services and taxes.
Not really. The State is, at heart, susceptible to the will of the people. For example, in California there are a lot of people who have supported some very odd taxation laws. In Massachusetts, people feel differently.
As a result, states differ. So not only can you affect your taxation by voting, but (if you are rich enough to make it feasible) you can affect it simply by changing your state of residence.
Well, they’re also a choice because you came there, and because you choose to stay there. Choosing the status quo is a choice like any other. You’re free to choose another location. You’re free to
You’re right; I misspoke. I was talking about an entitledment, as you accurately sussed out.
Profit away: sell your house, and move to Wisconsin or something.
I ask your pardon. In this instance I used the word “profit” in a more philosophical sense, not in the strictly financial sense, but in context that certainly isn’t clear. Let me rephrase, please:
But how does that mandate against a property tax? All this stuff about obligations of the State are general statements, not individuals ones.
Let’s say that the state decides that overall, people will best profit from the results of their efforts if they have job security and good health. Perhaps it raises taxes; perhaps there are a class of people who are harmed. But “the state” cares about “the people,” not “the particular person who is complaining.”
Right. And it’s up to the state to judge what’s most beneficial to its citizens and how it allocates its resources (and taxes) to maximize such benefit.
Sure it does! The state works in generalities. Your position is akin to answering “men are generally taller than women” with “but my sister is taller than I am!”
Right. Which is exactly what I said before. Your taxes are determined by the State’s need for income, and your relative property value as a fraction of all taxed property.
It depends why they’re rising. If everyone in the town is richer because there’s a REAL increase in values (not just a reassessment) then the town may decide it can afford to tax everyone more. But it provides more benefits as a result.
If taxes go up then your benefits shoudl go up, unless the cost of providing benefits also goes up.
I believe that 55% vote is needed for a “fee”. That is a constant amount (e.g. $100) per parcel. A 66.66% vote is needed for a rate increase ($1-per $1000 in assessed value). Assessed value increases at most 1.1% per year.
In my opinion this is a very stupid way to do things.
I don’t think that it is likely to be repealed.
Now there is a reason that this happened.
In the ? late ’70s ? California house prices were going up extremely quickly, and people were seeing their taxes increase proportionally to this, and some people were losing their houses. Large property owners (Jarvis & Gann) saw this threat, and wrote a law that gave them huge advantages, and sold it as “granny won’t lose her house”. Since so many people were worried about their taxes going up, they happily voted for it, and their assessed values were rolled back by about 5 years, and locked to 1.1% growth.
Since then, since the majority of people think they benefit from this (after all, my house now has a value that is 300% of it’s assessed value) votes to repeal
or modify (“prop 13 only applies to your first house”) get shut down.
You have the right to benefit from your efforts, you just don’t have an entitlement to benefit. Given that you wanted to have a house that you would be able to live in all your life, rather than being amenable to retiring to somewhere cheaper, you clearly made a bad investment based on bad luck or poor planning. You bought a house on which you knew that you would have to pay property taxes, and you knew [or should have] that property taxes where you were buying the house were based on assessed value, not last sale price, so you knew [or should have] when you bought the house that you were taking a risk that the property value would go up relative to the value of other properties in the same property tax area (town, county, whatever is the unit on which rates are determined). You also knew [or should have] that your tax rates might go up because your community had become more expensive or because the majority of your community would favor more benefits.If it were anyone else who had made a bad investment along these lines where it couldn’t be vaguely blamed on “the government”, I can’t imagine that you would have the slightest bit of sympathy for them.
Nonetheless, since a plight similar to yours often affects people more legitimately needy than you (Oh woe, I must sell my house at a huge profit and move somewhere less over priced, but still very nice), many governments will actually give people on fixed incomes the option to delay payment of property taxes until their death, with the government attaching a lien to the property. In places where the government does not itself offer such an option, there is also the option of a negative mortgage, in which you sell a stake in your house to a bank in exchange for an income stream, with the debt recouped from the property after your death.
This seems to have been narrated by The Brain.
Sailorman @ #48: What struck me with your comment here, is that if RonF., a wealthy man, is getting priced out of his home, think about the impact that has already been made on the community. The fabric hasn’t been frayed, but ripped to shreds. Most people do not have the options that he has, so when I was reading the comments that amounted to, “aww, poor baby! sell for a profit and move!” I was thinking of all the folks who would have done that already; the folks with far fewer options.
Specifically, I was thinking about a story I read on the internet several years ago, about zoning in southern California. Apparently, in one wealthy community, there was some new zoning ordinance to try and increase affordable housing. Some developer thought he could fill that bill (as a percentage of his development project) by putting small apartments over the horse barns, and got some flak for that. I specifically remember that part of the discussion centered around the need for low-income housing so plumbers and teachers could live fairly close to their jobs. It hit me, because where I come from, those aren’t low-income jobs—but for housing in southern California, they are.
What isn’t being talked about is why this happens, why some communities become teardown communities and people are effectively priced out of their homes, with most of those people not able to leverage that into similar housing elsewhere in a reasonable radius to their job. Sometimes it’s about hipsters moving in, but……mostly, it’s about schools. Public schools, white flight, economic segregation, and property taxes as the means to fund schools. If RonF is getting priced out of his suburb, it’s because even wealthier people are moving in, and he can’t compete with their resources. This has happened downstate to smaller towns that surround downstate urban centers—they used to be affordable communities, but with the rise in property taxes, they aren’t. The annual property taxes exceed the annual mortgage payments on older homes. And yes, this is all about white flight and how schools are funded.
The pithy answer to RonF is “move”, but the real dynamic is more complex. Read The Hidden Cost of Being African-American by Thomas Shapiro. He discusses the use of generational wealth, with a lot of compare-and-contrast case studies. There’s a contrast between a white (college-educated, two-income) family with a black (college-educated, two-income) family….though both families work hard, the white family is so far ahead of the game financially. How did that happen? Generational wealth. In the white family, the financial heavy lifting isn’t just being done by the parents, but also by the in-laws. The white parents have no student debt to pay off, they didn’t have to save to buy their home (down payment paid by their parents), and the grandparents are paying for the private-school education of the grandchildren. Six adults (in three different homes) are financially supporting the white family.
So, I think there’s something to RonF.’s critique. “Just move” isn’t really an option for people who don’t have that generational wealth to lean on. And it’s that generational wealth that is making teardown neighborhoods possible, with white flight and property-tax funding of schools making teardown neighborhoods desirable. That same white flight is creating concentrations of wealth that benefit the folks with generational wealth, while depressing the assets of folks who didn’t have moving as an alternative. Wash, rinse, repeat.
So if rentals are staying more expensive than ownership, something is tweaking the market.
Heh. Sailorman, I’m assuming you don’t get out to the rust belt much. ;-) That “something” is called lack of middle-class jobs. Housing prices have stayed stagnant in a way that rent hasn’t, because people who are renting have a hard time coming up with the down payment—it’s hard to save a down payment when your income is already earmarked for rent, utilities, child care,etc. Lack of buyers keeps the price of owning down, but there isn’t a lack of renters (people still need a roof over their heads). This situation is not likely to change anytime soon. It’s been this way most of my life (for downstate Illinois), and I’m 42. Thank deindustrialization. Most formerly prosperous areas are falling apart. What RonF is seeing is the concentration of wealth that used to be distributed throughout the state. It’s impacting him now.
Sailorman, theoretically I agree with you: we have a (human) right to housing, but not necessarily to own it. As a practical matter, I disagree. When most people cannot own, wealth and power concentrates in the hands of the few, with predictable negative results.
Lots to comment on, but little time. I will, however, ask this:
Sailorman @ #48: What struck me with your comment here, is that if RonF., a wealthy man, is getting priced out of his home, think about the impact that has already been made on the community.
La Lubu; define “wealthy”, if you please, and then tell me on what basis you think I qualify as such.
RonF, wealthy is a relative term. By world standards, everybody reading this blog is wealthy. By neighborhood standards, I’m wealthy (over 90% of the kids at my daughter’s school get free lunch). Based on some of the commentary you’ve made on this blog, I assumed that you are wealthy by Illinois standards—that you outearn most Illinois residents, and live in a neighborhood that most folks in Illinois could not afford. I did not mean it as an insult, but as a neutral descriptor.
I mean, when you make a statement like:
This is what I’m worried about. My wife and I bought a quite modest home, a tri-level with 1700 square feet of space. We bought it for $90K back in 1986. The changes in the neighborhood have been such that my house is a teardown, which means that if I sold it, probably for 2.5 or 3 times what I paid for it, the new owner would tear my house down and build on the property.
it does say something about your relative wealth, and that you’ve been able to stay in that house despite your neighborhood becoming a “teardown” neighborhood (lemme guess….DuPage County?) says something too. Does it make you Rich “Filthy” McStinkingDollars, III, Esquire? No, but yeah, by Illinois standards you’re doing more than alright by yourself (even if by DuPage County standards you’re a slacker ;-)
That’s pretty much our disagreement, right there.
I don’t care about “community,” in a legal sense. Don’t get me wrong; I like community, and I’ve chosen to live somewhere that has a strong community. I like waving at people in the supermarket. But in this context community is simply another term for a “club,” and one that is immutable. And I don’t like clubs.
See, inherent to any”defense of a community” is the implication that the current community is preferable to a changed community. Otherwise, there’s no particular reason to defend it, is there? And that’s not so different from a conclusion that the current community members are preferable to the new community members. And you can probably see where I’m going with that.
As I said, I like my community. But even so, I’ve opposed measures that would (for example) give local preference to our community members in housing or other areas. Why should someone we know be advantaged over someone we don’t? Who is to say that the new person won’t be as good or better at community participation? Who’s to say that I wouldn’t wave to THEM in the supermarket, six months from now? Some of my best friends were born here, and some have lived here for less than a year; am I to value one over the other because of her supposed “community ties?”
Now, there’s arguably a practical argument which can be made, that has nothing to do with the individual members and which relies entirely on questions of general import. But frankly, whenever the “protecting communities” thing comes up, i see a lot of undercurrents which favor one group over another.
And it hits both sides. I’ve seen it mentioned as justification for discouraging nonwhite immigrants from settling in a lily-white Yankee town and changing its “character.” And I’ve seen it mentioned as justification for discouraging white people from moving into historically immigrant areas and changing its “character.” I’ve seen it used to deter poor people from moving and to deter rich people from moving. I don’t like any of those examples very much.
Sailorman, we are talking past each other. I’m not talking about the social aspect of community. I’m not talking about who waves to whom in the grocery store. I’m talking about depleted resources and concentrations of wealth and poverty. I’m talking about the entrenchment of inequality that results from that.
I’m talking about “communities” that look like swiss cheese with more holes than cheese. I’m talking about crumbling infrastructure, failing schools….not who’s coming to dinner. And if RonF is getting priced out of his community….guess what? He isn’t the canary in the coal mine.
I think that there’s something to be said for the idea that long term residents are preferable to short-term residents, in terms of being bought into the community, interested in its long-term prospects and development, less likely to be sources of crime or social disorder, etc.
Now, the problem is that, like you said, this ends up being a tool of keeping the [white|brown|old|young|rich|poor] people out, but I don’t think the idea that long-term residence is better than nomadicism for a community is inherently unreasonable.
—Myca
No, it’s a judgment call. I’ve always disliked it and I don’t think it is a good idea, but the reasons for disagreeing with my position are well-established.
La Lubu:
I’d imagine that anybody here would be considered “wealthy” in comparison to the average human being planet-wide. I did take a look at this from a more localized viewpoint.
I don’t live in DuPage County, but I do live near the Cook-DuPage border. For you non-Illinoisians, DuPage County is one of the highest-income counties in the country, and it shares a common border with Cook County, which includes the City of Chicago, with it’s assortment of both incredibly wealthy (by any measure) and desperately poor residents.
My town is actually one of the lower-income towns in the area. The average home value is around $350,000. My guess is that my house is worth about 70% of that, if that. My household income is about 2x that of the median income of my town, but it’s about 90% of the median of one town just next to me. The median value of homes in that town is about 3x that of my house. My household income is about 2.2x that of the State of Illinois taken as a whole.
Compared to some one living on the West Side of Chicago I’m wealthy. I don’t worry about where my next meal is coming from, certainly. I’ll go home tonight after choir practice, have dinner, and then climb into a warm bed under a roof that doesn’t leak. But there are people living a mile or two away from me that make 10x what I make in a year with a house to match. If you drove by my house while making a tour of the area you wouldn’t look at it twice, it’s average to small compared to what’s around me and unlike a lot of people I don’t spend a lot of money- hell, I don’t spend any money – on landscaping, etc.
And just for the hell of it; the racial characteristics as of the 2000 Census were ~ 94% Caucasian, 2% Asian, less than 1% black, 2% describing themselves as multi-racial. 5% described themselves as Latino. Somehow someone came up with an estimate that 0.2% of the households were lesbian couples and 0.1% were gay couples. This was on the basis of households that had two unrelated people of the same sex, don’t ask me to vouch for the veracity of that.
Of course, around here a mixed-race couple would be described as one where the husband was Polish and the wife was Irish. 75% of the people in town described their ancestry as one of either Polish, German, Irish, Italian or Czech.
So the bottom line is that while I am much better off than a lot of people in this country, I look around and don’t consider myself “wealthy”, I see myself as middle to upper-middle class. I make more than some of my Scouter friends but a lot less than the husbands of the women my wife plays tennis with.
Yeah, by DuPage County standards I’m a slacker, for sure.
Very often you’ll hear people say that we can pay for increased social services by raising taxes on the wealthy or on corporations. Corporations mostly tend to pass higher taxes on to their customers, especially since they’re all affected and so there’s little competition. So increasing taxes on corporations really means getting the money from their customers, which is just about everybody.
Raising taxes on the wealthy begs the question I just asked; who’s “wealthy”? It’s worth asking because once you pick a number you can then figure out using IRS data how much they are already paying and how much more money it’s reasonable to expect to raise by that method. At which point you can compare the numbers and see if the amount you can expect to raise will equal what you want to spend. No bucket is bottomless.
Early in Obama’s campaign it seemed that “wealthy” = $250K annual income. I say this on the basis that he was in favor of increasing taxes on the rich and also promised that no one making less than $250K/yr would see their taxes going up. By the end of the campaign it seems to have gone down to about $150K. I know people making $150K a year and they do not consider themselves wealthy.
Holy $h!t! This is a rather unusual view of white people. Maybe in some high-income enclaves this is true. But for the average white couple that I know we all had student debt to pay off (it took me about 5 – 7 years) and the kids didn’t go to private school. My mom and dad had to scramble just to handle their own financial issues. I was worried I’d have to support them, not the other way around. I may still have to start help supporting my mother. If it wasn’t for Dad having served in WWII and getting disability payments Mom would be in a rathole nursing home somewhere.
My in-laws did help us with a $9000 down payment on our house, but we paid that back within a year or so. My personal experience is that this is not so uncommon. But the rest of it? I’d like to know where that came from. That sounds like an exceptional case, not life for the average white couple.
Which is why I’m wondering how people see this as a natural consequence of capitalism or “maintenance costs of property”. Some level of public services are necessary and need to be funded by taxes. But there is nothing immutable about using property taxes (vs. income or sales taxes, lotteries, etc.) to provide that funding. Raising property taxes to the point that people are forced out of homes that they spent 30 years or more paying for and maintaining seems bad public policy to me and not anything that has to be inevitable.
Jeff- If you’re interested, there’s some more Hamsher vs Rahm info here:
http://fdlaction.firedoglake.com/2010/02/05/bank-lobbyist-jamie-goreleck-endangers-student-loan-reform/
http://firedoglake.com/2009/12/24/so-you-want-to-defend-rahm-on-fanniefreddie/
Ron,
There are undoubtedly people making $1 million a year who live in neighborhoods where the neighbors make $10 million a year and so they don’t feel wealthy, that doesn’t stop them from being richer than 99.9% of the population. Single people who make $150,000 (or couples who make $250,000) are richer than 95% of the population, so if they don’t feel wealthy that is an issue they should discuss with their therapist, not an issue that should determine tax policy.
Also, you should be numerate enough to know that if we raise the tax rate in a bracket starting at $150,000, someone making $150,000 pays no extra taxes. If we raise the rate by 5% on the $150,000 + bracket, someone making $200,000 pays only an additional $2500. I don’t think going from making $200,000 to making $197,500 is that traumatic of an experience (anyway, it is one that 99% of us would love to have the chance to suffer).
Do you believe that the market mechanism for setting prices mostly works?
—Myca
Whether or not you “believe” in market mechanisms, Myca, logic would tell us that taxes on corporations are going to be passed along to the consumers of the products/services the corporation markets. Where else would the money come from?
Only if consumers can/will pay those higher prices. If passing on all the cost means that people will stop buying that product or service, some portion of it will come out of corporate profits. Depends on the tax, the product, the industry, etc.
Chingona – if you don’t pass along the costs, where does the money come from? The corporate profits ALSO come from the customers. No customers, no money.
Well, if you believe in market mechanisms, then that say that prices are set independent of expenses. That is, the market doesn’t care how much it costs you to make a widget … customers are going to try to get it for the lowest price available, and if someone else prices it lower than you, you’re out of luck.
Thus corporations that did not pass along tax increases to their customers in the form of price hikes would have a competitive advantage in the marketplace over corporations that did … and, in fact, the larger the tax, the larger the competitive advantage.
Now, sure, there’s a point where a tax increase (or any increase in expenses) simply must be passed along to the customers for the business to survive, but considering how well large corporations and the wealthy have done over the past 10 years and how poorly the rest of the country has done, I think it’s pure fantasy to believe we’re close to that point.
Of course, all of this is predicated on a belief in capitalism and market mechanics, which maybe you and Ron don’t have.
—Myca
Well, if you believe in market mechanisms, then that say that prices are set independent of expenses. That is, the market doesn’t care how much it costs you to make a widget … customers are going to try to get it for the lowest price available, and if someone else prices it lower than you, you’re out of luck.
Taxes are expenses. Your logic is predicated on the assumption that corporations can refrain from passing along an expense, and thus derive competitive advantage over other firms.
But this is true of all expenses, not just taxes. In reality, companies cannot refrain from passing along expenses in any but the shortest of terms, regardless of how well you think they’ve been “doing”.
Maybe a real-world example would be useful. Exxon – hardly a mom-and-pop, barely-getting-by organization, I’m sure you’ll agree – in 2008 posted the largest-ever corporate profit in US history. They earned $45.2 billion in profit on sales of $477 billion – about a nine percent rate of return, pretty good for a meatworld-product company.
Exxon derives about 2/3 of its money from the oil bidness. Pass a 15% gross tax on crude oil, and one of two things happen:
1) Exxon passes the cost on to its consumers, same as all the other energy companies, or
2) Exxon goes into the red on its most profitable year in history, and in every other year to boot. Exxon shareholders sell. The company tanks in the market. Hundreds of billions in accrued value vanish (later to reappear in the equity accounts of smarter energy industry investors who buy at the bottom of the market). Unable to float loans (nobody will loan you money if you can’t pay it back) or finance operations out of ongoing revenue (company’s now in the red, remember), the company itself eventually collapses; its assets, contracts, infrastructure, etc., are bought for a song by competitors who followed strategy (1) and who are still in business.
Corporate profits aren’t magical dollars. They come from customers. Businesses which do not pass along expenses to their customers fail. They fail quickly and inexorably and none of this is controversial.
Obviously, if a tax increase is larger than the total profit, then some of that tax increase will be translated directly into higher price tags.
However, even in that case, the question remains: will 100% of the cost of the tax increase be passed on to consumers, 0r will some of the cost of the tax increase come come out of reduced profits?
How much of the corporation’s increased taxes are passed on to the consumer in higher prices will depend on the stuff Myca was talking about: How elastic consumer demand is, and how competitive the industry is. To claim, as many conservatives do, that 100% of all tax increases are inevitably passed on to consumers as higher prices is nonsense. (I’m not certain if either you or Ron are making such a claim.)
Finally, what if the corporation’s profits are larger than the tax increase? In that case, the exact same mechanisms — elasticity and competition — will determine how much of the tax increase is passed on to consumers in higher prices. So I frankly think the stuff you’re talking about, Robert, is irrelevant.
(Of course, there’s another source for paying for increased expenses, and that’s for production to become more efficient. There’s a large economic literature showing that increased expenses tend to spur efficiency in the long run. But we seem to be focusing more on the short run in this discussion.)
How much of the economy are large corporations and the wealthy (define “wealthy” …)? Most people work for small companies, not large corporations. Most new jobs are created in small corporations, not large ones, and those jobs will not BE generated if the small corporations’ owners think they’re about to get whacked with more taxes. Small companies generally have a small profit margin. The fact that you can point to an Exxon that is getting a 9% profit margin doesn’t mean that there’s a huge reservoir of untapped corporate profits open for taxation across the country. I don’t think it’s at all clear that we are not at the point that most corporate tax increases are not going to get passed on to consumers.
It’s not like corporate taxes have never increased before. There ought to be actual data on at least a correlation (if not the actual effect) between higher corporate taxes and prices – which should be obtained and consulted by the Administration and the Congress before they actually raise taxes.
Who ultimately bears the cost of corporate income tax? Depends upon the business.
In classical economics, a competitive price is set where the aggregate supply function (describing how the cost of producing another unit of X increases as you produce more X) crosses the aggregate demand function (describing how much X is demanded at various price levels). Under most circumstances the supply curve slopes upward – that is, the cost of producing each new unit is greater than the cost of producing the last one (due to “diseconomies of scale” – the need to pay overtime, deal with greater complexity, etc.) while the demand curve slopes downward.
Anything that increases the cost of production shifts the supply curve upward. A tax of $1 per unit will shift the supply curve up $1 per unit. The net result is that the price per unit increases by something less than $1. The difference is reflected in the idea that, at a higher price, people will demand less X, and therefore the producers will experience less diseconomies of scale (pay less overtime, etc.).
Whether any specific firm’s costs match the costs reflected in the aggregate supply curve is irrelevant to this analysis. Admittedly, a firm with abnormally high costs is placed at a disadvantage. For example, sometimes a taxed firm competes with a less-taxed firm. This happens when the two firms operate in different legal jurisdictions yet sell their goods and services in a common market, or when one firm is better able to evade a tax than another firm. Under these circumstances the taxed firm may elect to bear more of the cost of the tax; conversely, the less-taxed firm may elect to increase prices to take advantage of the relative loss of competitive pressure.
I am not aware of any basis in classical economics to conclude that a firm’s choice to pass through a tax increase depends upon whether the firm is rich or poor.
Bottom line: If I conclude that government needs more revenues and that rich people are not paying their fair share, then I would advocate increasing the tax rates in the upper income brackets – not increasing the rates for corporations. Sure, we should structure tax rates to discourage people from disguising personal income as corporate property (and vice versa), but otherwise we should promote progressive income tax in a straightforward way: raise rates on the rich.
Hm. Nothing like a good lecture in economics to kill the conversation….
It’s because nobody could say anything wiser and truer than that last comment. Why try to top perfection?
Pretty much.
“We should all be nice to children.”
So there.
:D
What if it’s baby Hitler?
“We should all be nice to children.”
The way things have been going in my house these days, I can only go along with this statement if the adults, and not the children, get to define “nice.”