Poverty among plenty -- and it's getting worse

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Check out the news this week:

The Associate Press reports that there are increasing numbers of homeless and poor people in Silicon Valley. The piece almost sounds like something I would write:

Simply put, while the ultra-rich are getting even richer, record numbers of Silicon Valley residents are slipping into poverty. "In the midst of a national economic recovery led by Silicon Valley's resurgence, as measured by corporate profits and record stock prices, something strange is going on in the Valley itself. Most people are getting poorer," said Cindy Chavez, executive director of San Jose-based Working Partnerships USA, a nonprofit advocating for affordable housing, higher minimum wages and access to health care.

That will come as no surprise to people who lived through the last tech boom in San Francisco and are struggling to live through this one. Great wealth does not trickle down around here; it sucks up housing, drives up costs, and creates homelessness and poverty for the most vulnerable:

The causes for the growing disparity are complex, but largely come down to one thing: a very high cost of living. The median home price is $550,000, and rents average just under $2,000 a month for a two-bedroom apartment in this region that is home to many of the nation's wealthiest companies including Facebook, Apple Inc., Hewlett-Packard Co. and Google. For a family of four, just covering basic needs like rent, food, childcare and transportation comes to almost $90,000 a year, according to the nonprofit Insight Center for Community Economic Development. "The fact is that we have an economy now that's working well only for those at the very top," said Lawrence Mishel at the Economic Policy Institute in Washington, D.C. "Unless we adopt a new approach to economic policy, we're going to continue going down this path, which means growth that does not really benefit the great majority of people in this country."

Meanwhile, there’s a new study out, using a new approach to economic data, that shows that almost a quarter of all California residents live below the poverty line. The raw data, which is a bit thick, is here. There’s a state Senate report on it here. Sen. Leland Yee (D-SF) held a hearing on the data -- but uncovering the facts, while valuable, isn’t going to get anyone off the streets. And I don't understand why this isn't on the front page of every major newspaper in the state.

Before my trolls tell me that I hate the rich, let me repeat: I don’t hate anybody and I don’t blame rich people for what this country has created. That’s the fault of the policymakers who, since Ronald Reagan too office in 1981, have allowed the United States to embrace increasing social inequality.

Great wealth can make a country, well, wealthy. But if it’s allowed to stick entirely to the top, then if can do more harm than good.

And the reality is that, particularly in the South and the West, tax policy is designed to help the wealthy at the expense of the poor:

The fact is, the more the poor are taxed, the worse off they are, whether they are working or not. We all pay a huge price for this shortsightedness. Medicaid payments, food stamps, disability benefits — all of these federal programs swoop in to try to patch up a frayed safety net.

In other words, it’s not the Invisible Hand of Adam Smith causing the poverty in California. It’s not laziness that causes poor people to live on the streets. And it’s not just happening in San Francisco.

Now, some of the people who like to comment on this blog suggest that poor people just move somewhere else, that it’s too expensive to live in San Francisco and that’s just the way it is.

That's a bit of a harsh approach, and undermines the entire idea of a city as a community, where people of different income levels can live. But it’s also impractical; one of the reasons people come here, besides the weather and the scintillating level of intellectual dialogue (present company excluded) is that there are jobs here. Oh, and most poor people can' t just pack up, hire a moving van, relocate to another city, pay first and last month's rent, and live on savings until they find a new job.

There was a time when the federal government taxed great wealth, and used the money to invest in cities, building (and subsidizing) housing and infrasructure and funding jobs programs. Much of that is now gone; revenue sharing is a ghost of the past, eliminated in the Reagan era.

So now we have almost a parody of American economic news: The New York Times reports that the Dow Jones Industrial Average is setting new records, and on the same page notes that the numbers of homeless people and people living in poverty are also setting records.

This is by far the biggest issue, the most serious crisis, facing the country, and (unlike wealth) it trickles down to every level of government. And it seems as if nobody is paying attention.

Comments

Consistently one of the most egregious posters on this board for stating opinion as fact - tarnishing his reputation in the process like his friends anon and Lucretia - lilli is confused about yet another subject.

The asset value of lumber can be taxed since it's an asset, just as the asset value of a corporation can be taxed on its asset value. But it's the owners or buyers of the lumber that pay the tax, just as it's the owners or purchasers of a corporation's goods and services who will pay any tax imposed on a corporation.

If corporations pay tax, we could just create 17 trillion corporations and charge them each $1 dollar of tax to pay off the deficit. Obviously the tax has to come from somewhere, and it's paid by the owners, employees, customers, and/or suppliers, even though it is collected and remitted by the corporation.

If we charge a corporation an asset tax of 1% and it has no sales for the year, it's more obvious that the corporation doesn't "pay" the tax; it's merely assessed against the shareholders who own the corporation. They had value equal to 100% at the beginning of the year, but it has decreased to 99% at the end of the year. The corp may have sent in the tax money, but the shareholders incurred the cost.

The cigarette tax is easy. A tax on cigarettes is never paid by non-smokers, only by the customers who choose to purchase the product. The cigarette company collects the tax on the sales and remits it to the government.

I like most of lilli's list. It's a useful service (if it was printed once every two weeks instead of every day). But #11 is wrong since only humans ultimately pay any tax.

Since there is likely to be a major overhaul of the corporation tax in the next year or two, it's unfortunate the left isn't more focused on the reform effort. We could raise a lot more tax money from businesses - including multi-national corporations - while reducing taxes that fall directly on working people, but the rational might be because it's easier for companies to collect the tax for us, or because we can encourage domestic companies verses foreign companies or small companies verses large companies, by reforming the business tax system wisely. But regardless of the system, businesses do not pay tax.

Posted by Guest on Mar. 13, 2013 @ 11:12 pm

Every tax-paying entity will always seeks to pass along the costs of taxes, BUT THIS CAN ONLY EVER BE DONE ACCORDING TO WHAT THE MARKET WILL BEAR.

Posted by lillipublicans on Mar. 13, 2013 @ 11:40 pm

That's why we have inflation. Nobody likes inflation and it is not a government policy to have inflation. And yet we do. Why?

Because taxes and other costs keep rising on businesses. Those businesses then raise their prices to cover that increase. If they do not, then the profit falls, and employees lose their jobs OR shareholders get less dividends OR their suppliers lose business OR customers pay more.

When the price of oil goes up, the price of gas goes up. You cannot avoid that or control that. The market is elastic.

Posted by anon on Mar. 14, 2013 @ 6:18 am

Again, folks, it's impossible to dispatch such comments forcefully enough because they are so thoroughly imbued with deception.

A simple refutation will inevitably confer implicit validation to all sorts of bold lies, so it is necessary to identify onan as a bold lying troll who layers mendacity upon mendacity like a vile tapestry -- an un-American pollution -- while making the explicit qualification of dismissing only selected lies.

Here's three:

"Nobody likes inflation"

No, actually people who owe money like inflation if it enables them to repay loans in devalued currency. Creditors hate inflation.

"profit falls, and employees lose their jobs"

No. This false equation has no basis in fact. Profits are always maximized.

If that means firing employees and sending their jobs overseas -- and government policy encourages and subsidizes such tactics -- then that is what will happen.

If profits drop because taxes are increased, it has *no* effect on the optimum number-- or type-- of employees.

"when the price of oil goes up, the price of gas goes up"

No. Gas prices are set by a combination of supply-and-demand and price fixing; i.e. greedy speculators.

Every time oil prices go up, gas prices go up. When oil prices drop, gas prices go up. When NPR (National Petroleum Radio) runs a story on Mid-East tensions or "onerous Federal air quality legislation", gas prices go up.

Note: this is just three of the lies that onan has packed into his billious little deposit here. Plenty of refutation though for the raddled little fuck to come back with some willfully misinterpreted non-sequiturs.

*Standard Operating Proceedure

Posted by lillipublicans on Mar. 14, 2013 @ 10:59 am

corporate tax would be the only tax we'd ever need. We could abolish all other taxes and simply tax corporations because that would not cost a penny, right?

Wrong.

That's called a reductio ad absurdum. Take Lilli's premise, show what logically and inevitably follows from it, and then show that conclusion to be untanable. Ergo his premise is untanable. Ergo it is people who pay corporate tax, not "things".

Posted by Guest on Mar. 14, 2013 @ 11:14 am

Reduction Ad Absurdum is a valid logical tool which is used by the greatest mathematicians and philosophers.

Straw Man is just a slimy way to lie.

Reductio is taking a premise to its *logical* conclusion.

Straw Man is dispensing with an argument that your opponent has not made; and thus pretending that you have dispensed with the argument that has actually been made.

Reductio is reacting to the premise that "rocks don't weigh a thing" with the observation that if it were true then the skies would be full of rocks.

Straw Man is claiming I said only corporations should pay tax and not people, when in fact I said "all entities, whether genuine or artificial "persons," should pay tax.

Again, the Big Troll Lie is that "corporations don't pay taxes, only people do."

This is a suprisingly pernicious lie because it is believed by so many people who ought to know better.

The *Reductio* argument against the lie is that if corporations can't be taxed, then *nobody* can; because while every entity will always try to export any costs of business such as taxes, their ability to do so is *always* limited by what the market will allow.

It's that Invisible fucking hand you pretend to love so much.

Posted by lillipublicans on Mar. 14, 2013 @ 11:59 am

The method is the samme in both cases but, with a straw man, there is a flaw in the logic.

But often that comes down to a matter of opinion, such that when someone has an effective RAA used against them, they will seek to deflect by claiming it is a "straw man".

Again, do you believe that corporate taxes are we all need on the basis that people don't pay them? Isn't this the magic free lunch we have all been waiting from?

Posted by Anon on Mar. 14, 2013 @ 12:13 pm
Posted by lillipublicans on Mar. 14, 2013 @ 12:22 pm
Posted by Anon on Mar. 14, 2013 @ 12:29 pm

Corporate taxes are all that we need because most of the deleterious impacts on society and the environment are caused by corporate conduct and the costs of those impacts should be included in the price of goods sold by those firms so that consumers can make fully informed choices.

Posted by marcos on Mar. 14, 2013 @ 12:44 pm
Posted by Anon on Mar. 14, 2013 @ 1:02 pm

And no other country has the toxic politics of the US either. Your point?

Posted by marcos on Mar. 14, 2013 @ 1:06 pm

statements made earlier about corporate taxes were 100% wrong

Posted by Guest on Mar. 15, 2013 @ 1:30 pm

Hurrah for Condi, it was good while it lasted!

Posted by lillipublicans on Mar. 14, 2013 @ 1:08 pm

Businesses, including corporations, many be efficient for collecting taxes, but fictional entities like businesses such as corporations don't "pay" taxes. Since only people pay taxes, in the case of businesses, it's their customers, shareholders, suppliers, and/or company workers who actually "pay" the taxes, even if it's the business that collects the taxes and sends them to the government.

And most small "corporations" are LLC's that aren't required to pay tax at all since the shareholders are treated as the taxpayers. In a LLC, the corporation is treated as non-existent except to provide liability protection to its shareholders.

When discussing taxes, fixating on "corporations" rather than considering tax policy as it affects all businesses - corps and non-corps alike - is like watching the magicians's black cape rather than observe what the magician is doing behind the cape.

Posted by guest on Mar. 13, 2013 @ 2:46 pm

The corporate tax rate is 35% no matter how it gets paid, it is still a CORPORATE TAX. That's a tax on business.

Posted by Guest on Mar. 13, 2013 @ 3:05 pm

various people affected by that corporation i.e. customers, employees, suppliers, shareholders etc.

Corporations are conduits.

Posted by anon on Mar. 14, 2013 @ 6:12 am

tax and the idea of increasing it and -- far more importantly -- closing the loopholes that *major* corporations *regularly* use to pay no or zero tax.

The magic trick is telling the Big Troll Lie that "corporations don't pay tax, only people do" because, of course, *nobody* has ever explained how the idea that a corporation "persons" passes along its tax-related costs is *any* *different* from what genuine persons do. There is *no* difference -- it's a bold-faced lie.

Posted by lillipublicans on Mar. 13, 2013 @ 9:40 pm

corporate taxes is quite simple. Because the tax leaves them with less profits, they hire less, or pay their workers less, or charge more for their products, or pay less for their raw materials, or reduce dividends, and so on.

Each affects you and me.

Imagine this thought experiment. Income and sales tax is abolished tomorrow, and corporate tax raised to whatever level is necessary to compensate. Do you really believe that you now pay no tax? But that magically someone else does?

Posted by anon on Mar. 14, 2013 @ 6:15 am

it is "The One Percent."

We also have a name for the rhetorical technique which the onan troll calls "thought experiment":

it is "Straw Man."

Everybody should be taxed. That's why I've got a problem with "corporate persons" evading tax.

Posted by lillipublicans on Mar. 14, 2013 @ 6:37 am

Rentiers.

A rentier (pronounced /ˈrɒnti.eɪ/ or /rɑ̃ˈtjeɪ/) is a person or entity that receives income derived from economic rents, which can include income from patents, copyrights, brand loyalty, real estate, interest or profits.

If there is no exclusivity and there is perfect competition, there are no economic rents, as competition drives prices down to their floor. Economic rent is different from other unearned and passive income, including contract rent. This distinction has important implications for public revenue and tax policy. As long as there is sufficient accounting profit, governments can collect a portion of economic rent for the purpose of public finance. For example, economic rent can be collected by a government as royalties or extraction fees in the case of resources such as minerals and oil and gas. Historically, theories of rent have always applied to rent received by different factor owners within a single economy. Hossein Mahdavy was the first to introduce the concept of "External Rent" whereby one economy received rent from other economies.

Posted by marcos on Mar. 14, 2013 @ 7:06 am

Some decades ago, many countries taxed unearned income at a higher rate than earned income. This was precisely because unearned income was deemed somehow lesss socially useful, in the manner that you appear to be suggesting.

However, that situation has now reversed. In the US, we tax dividends and capital gains at 15%, versus up to almost 40% for earned income. We do this for a very simple reason - we want people to take risks and commit capital.

Your thinking went out of fashion about 30-40 years ago, both in the US and overseas.

Posted by anon on Mar. 14, 2013 @ 7:34 am

Yes. Right around the same time that the 99% started getting shafted.

Posted by lillipublicans on Mar. 14, 2013 @ 7:44 am

Adam Smith, Ricardo and the rest of the classical capitalist economists are too much of a socialist for today's libertarian radicals.

Posted by marcos on Mar. 14, 2013 @ 8:01 am

deserve it. If you know the rules and how the game is played, you can do well.

Posted by anon on Mar. 14, 2013 @ 9:34 am

Oh Mighty One, how is anyone deserves to get shafted? Is it because wealth confers a certain entitlement that the rest of us lack? Such as the right to pillage and plunder?

Posted by Guest on Mar. 14, 2013 @ 1:56 pm

wealth. Figure that out, and the rest is easy.

Posted by Anon on Mar. 14, 2013 @ 2:17 pm

Those institutions are the ones that run your IRA, 401K, pension fund, bank, insurance company, and so on.

If corporate taxes (or, for that matter any other component of cost) increases, and that cost cannot be passed onto the customer (you) or the employee (you) or the supplier (you) then it will instead reduce the dividend paid to those institutions (you).

Posted by anon on Mar. 14, 2013 @ 7:30 am

Wow, onan, that sounds like a formula for perfect socialism -- but that's not what you are advocating or what we have now, is it?

Oh, I get it. You are telling another one of your bold-faced and creepy lies.

Posted by lillipublicans on Mar. 14, 2013 @ 7:42 am

but by you and I via pension funds etc.

So lower dividends hit you, whether caused by punitive taxes or anything else.

Billionaires can invest their money anywhere they wish. If you want them to invest that money in the US, then you have to ensure that they are not disadvantaged by so doing.

Posted by anon on Mar. 14, 2013 @ 9:33 am

hold *most* of the wealth in the U.S.

While it might be necessary to include the eighth percentile -- people around the millionaire level -- to get a group that "hold most of the shares," that little tidbit of trollery has no bearing to the division of financial wealth in the U.S. (. . . or perhaps it does, because this sort of wealth is so obviously prone to price manipulation from above, but I digress...)

So, do we have a mute implication made by stating a fact which is: first of all, scarcely true; and secondly, having almost zero bearing on the subject it is intended to reference?

Or do we have Big Troll Lie #23?

Yes. Its 23.

"Wealth in the U.S. is broadly distributed"

Posted by lillipublicans on Mar. 14, 2013 @ 4:39 pm

except it was compelling and interesting and didn't call for expropriation and the repeal of Prop 13 as the solution to the problem.

Posted by Lucretia Snapples on Mar. 12, 2013 @ 2:00 pm

Perhaps he has given up and is just marking time until his retirement plan is vested?

Posted by anon on Mar. 12, 2013 @ 3:03 pm

You godless heathens need to read your Bible like it was any other historical document with a code of moral conduct.
"The love of money is the root of all evil."
By "love," I believe the writer meant hoarding or accumulation, not acquisition.
"Faith, hope, and charity; but the greatest of these is charity."
Which I interpret to mean "It is better to give than receive."
So, it's OK to have money, as long as you give most of it away, because:
(my favorite image) "It is harder for a rich man to enter Heaven than for a camel to pass through the eye of a needle."
Ahh, but where's this "Heaven" you speak of?
"The Kingdom of Heaven is within you."

Posted by Troll Killer on Mar. 13, 2013 @ 8:52 am

Albeit only with tired cliches.

Posted by anon on Mar. 13, 2013 @ 9:17 am

I suppose an intellectually and ethically challenged person could see the Bible as "tired cliches." Others might see it as "doing the right thing."
Your choice. And by the way, has nothing to do with religion, as I went to great pains to point out, and you still missed it.

Posted by Troll Killer on Mar. 13, 2013 @ 9:40 am

But hey, at least you get to double-park on Sundays huh?

Posted by anon on Mar. 13, 2013 @ 9:53 am

.....if the rich don't share the wealth, the poor will eat them.

Posted by Troll Killer on Mar. 13, 2013 @ 9:42 am
Posted by anon on Mar. 13, 2013 @ 9:52 am

I never said I was a Christian.
But I might be a cannibal.
Eat The Rich!

Posted by Troll Killer on Mar. 13, 2013 @ 11:42 am

but often incarcerative.

Posted by anon on Mar. 13, 2013 @ 4:50 pm

Not a threat; a promise.

Posted by Troll Killer on Mar. 14, 2013 @ 12:39 pm

And liberals wonder why we own guns.

Good luck eating us.

Posted by Guest on Mar. 14, 2013 @ 12:42 pm

"We" own guns?
Most guns are used for suicides and to murder family members.
Can't recall the last time I heard of some Hollywood fantasy-style defense
of home and property involving a firearm.
Anyway, guns won't save you.
They'll just wait until you come out for food,
and pick you off from 300 yds.

Posted by Troll Killer on Mar. 14, 2013 @ 6:01 pm

Delusions of grandeur, and revenge fantasies.

Posted by Guest on Mar. 15, 2013 @ 1:29 pm

A delusion of grandeur involves thinking you are better than anyone else,
or that you would survive a social upheaval by using violence.
And it's not "revenge;" it's the "chickens coming home to roost."

Poor, hungry, angry angry chickens......

Posted by Troll Killer on Mar. 16, 2013 @ 8:42 am
Posted by Anon on Mar. 14, 2013 @ 12:46 pm

Was born and raised in Mountain View, CA, which can be found in the center of Silicon Valley, have seen a lot of changes over the years. I don't live here anymore but I am proud to call it home, exciting events and changes happen here, entire companies formed on one small ideas, from the garage to the office campus. Silicon Valley is mostly made up by cities sharing nothing in common expect being in a place that its nickname was created in a bar in the 60's

Rents have gone up, home prices gone, wages have gone up, but if you aren't part of the Tech sector you aren't going to get anywhere. Housing makes up so a big pat of workers pay.

Posted by Garrett on Mar. 13, 2013 @ 12:11 pm

I believe that was the point of Tim's article.
It would be interesting to know how many of the "new poor" were
formerly high-salaried "knowledge workers?"

Posted by Troll Killer on Mar. 13, 2013 @ 2:31 pm