Throughout the Occupy Movement, I have heard some interesting comments, such as “The camps have become a place where the local homeless population has taken up residence.” As if homeless people somehow do not have legitimate grievances with their government.
According to a 2011 UN report, up to 3.5 million people experience homelessness in the United States every year, and on any given night over 800,000 people are homeless.
Moreover, they note, “In some cities, homelessness is being increasingly criminalized. Criminalization includes fines, arrests and severance of social protection benefits or even access to employment.”
That report focuses on the lack of access that homeless people have to public restrooms, while local statutes have at the same time enforced prohibitions against public urination and defecation – ostensibly to protect public health.
However, the UN Report argues, these statutes are “often discriminatory in their effects. Such discrimination often occurs because such statutes are enforced against homeless individuals who often have no access to public restrooms and are given no alternatives. Furthermore, there is an increasing trend in local governments to limit opening hours or close entirely public restrooms. Such decisions are contrary to the need to create an enabling environment so homeless individuals can realize their rights to water and sanitation.”
A report from 2009 from the National Law Center on Homelessness and Poverty (NLCHP), in coordination with the National Coalition for the Homeless (NCH), has reported that most cities have used tactics in efforts to force homeless individuals off the streets.
These tactics include:
“Enactment and enforcement of legislation that makes it illegal to sleep, sit, or store personal belongings in public spaces in cities where people are forced to live in public spaces.
“Selective enforcement of more neutral laws, such as loitering, jaywalking, or open container laws, against homeless persons.
“Sweeps of city areas in which homeless persons are living to drive them out of those areas, frequently resulting in the destruction of individuals’ personal property such as important personal documents and medication.
“Enactment and enforcement of laws that punish people for begging or panhandling in order to move poor or homeless persons out of a city or downtown area.
“Enforcement of a wide range of so-called ‘quality of life’ ordinances related to public activities and hygiene (i.e. public urination) when no public facilities are available to people without housing.”
That report notes that of 235 cities surveyed, one-third prohibit camping in certain city areas, 17% prohibit camping altogether and half prohibit loitering or begging in public areas.
All of this becomes a pretext for the confrontation once again brewing in Sacramento, where police are moving to “evict” homeless people from an “illegal” campground along the American River.
The Sacramento Bee reported on Wednesday: “While most of the homeless appear to be complying with orders to pack up their tents and move somewhere else, some say they will stand their ground and face arrest because they have no place else to go.”
And that is the fundamental problem – it would be at least understandable if everyone had enough beds to shelter people, but the Bee reports: “Recent efforts by city officials have added nearly 60 additional shelter beds for homeless men and women, but more than that number are camping at the American River site.”
“We are going to try to get everyone out peacefully,” said Andrew Pettit, a spokesman for the Sacramento Police Department told the Bee.
“Where are they going to go?” Mr. Pettit said. “We don’t have the answer to that.”
At best, it appears, they will be moving the homeless from one spot to another. The Bee reports: “Pettit acknowledged that the campers will likely move to another wooded spot along the American River.”
So what is the point?
Last week, the Bee’s Associate Editor Ginger Rutland wrote a moving editorial after visiting the tent city.
She wrote: “When I visited, the place was surprisingly neat. Campers had erected a makeshift toilet. Their excrement, collected in big plastic garbage bags, is deposited in the restrooms at the Loaves & Fishes complex. They carry their trash out, too, to a Dumpster there.”
She described many as people who had spent time in prison and were thus unable to get a job and others were mentally ill.
“The debate rages about what local governments should do to help the homeless. The people I met were not seeking government handouts. They just want what they call ‘safe ground’ – a legal place to camp, permission from authorities to lay their heads down at night, somewhere, anywhere they won’t be arrested and their possessions confiscated,” Ms. Rutland wrote.
She adds, “It’s a cliché, I know, but as a Christian it’s hard for me at this season not to think of the Biblical Mary and Joseph looking for shelter. If they had not found that stable and had slept on a riverbank instead, would the cops at Bethlehem have rousted them?”
“Homeless advocates who oppose safe ground complain that a legal tent city creates a two-tiered housing standard, one for the destitute and another for everybody else. But it’s a false argument. For the people camping illegally, it’s tent city or nothing,” Ms. Rutland continued.
“Other opponents believe safe ground will only enable the homeless lifestyle, which – like no-questions-asked shelters and soup kitchens – perpetuates addiction and sloth,” she continues. “To them I say, think of safe ground as self protection. If Sacramento creates a legally sanctioned campground, with toilet facilities and a dumpster, the homeless don’t have to trash the American River Parkway or sleep in alleys behind homes.”
She concludes: “Finally, I too believe that tent cities are inadequate solutions. Ultimately, California and its communities need to support a strong mental health system and build permanent housing for the very, very poor who will always be among us. It can be one-room cottages, efficiency apartments, single rooms with communal baths and kitchens, but it must be safe ground, a place where the poorest of the poor can just be.”
And that is the very problem we face. We have inadequate resources. We do not have real solutions. And we do not even have makeshift ones, but we want to arrest and move the homeless because we consider them a nuisance, a burden, and perhaps even a reminder of our failings as a society.
—David M. Greenwald reporting
Homelessness is an extremely complex problem:
1) A pilot program was started in NY, where a tiny city was started for the homeless, with an enclosed park of little “domes” to live in. Each person was assigned a “dome”, which consisted of a plastic insulated igloo essentially, with a bed, dresser, table and chair, and hotplate to cook food. There was a “super” on the premises installed at the front gate, to keep everyone safe and to offer help when needed by residents. All of those who lived in “The Domes” had to be drug and alcohol free. From what I read, it was a very successful pilot program, but was not replicated as far as I know, which is common with pilot programs. Once the funding dried up, the project seemed to disappear.
2) Many of the homeless are mentally ill. They choose to remain homeless, even if shelter is available, bc they do not like socializing with others. They can be fiercely independent, and homelessness for them is a lifestyle choice.
3) Many of the homeless are veterans with a drug/alcohol habit they cannot/choose not to kick. They can develop intractable diseases such as diabetes, that they fail to take care of. I remember one vivid case of a veteran who died under a bridge missing most of his toes from diabetes. His death was ruled a result of natural causes – the result of the complications of diabetes that went untreated.
4) Panhandlers can become quite brazen and aggressive. I can remember parking at Arden Fair Mall one time, my car immediately surrounded by panhandlers on either side of my car. I drove away without getting out of my car. At some point Arden Fair Mall had mounted police patrolling the parking lots bc of the crime/panhandling problems in the parking lots. In Washington D.C. there was in infamous panhandler who used to blow his nose into his hand, and sling his snot at passersby. It was not uncommon for me to go to work in the morning in Washington D.C., and watch the homeless urinating on trees or sidewalks as I walked by. Not a pleasant experience and it presented a health hazard for all.
I suspect there are no easy solutions to the homeless problem. The reasons for homelessness are as varied as the number of homeless. However, many of the homeless can cause problems that have to be addressed. It is not uncommon for the homeless to refuse to seek shelter bc the shelters themselves are far from safe. Assaults in homeless shelters is not unheard of. Perfectly “respectable” and financially well off families have been known to have an intractable homeless relative, e.g. Madonna had a homeless brother I believe. No matter how much help the loved ones/family offer, the person chooses to remain homeless. I don’t begin to have any answers, and neither does anyone else would be my guess. Each homeless person’s case has to be addressed on an individual basis, and that takes a lot of money. Money we as a society probably do not have at the kind of level that is necessary to truly address the problem.
But certainly more money for mental health/veteran services would be a good start…
David: Nice article.
Elaine: Nice post.
I agree that this is a complex problem. My natural father who has mental health problems has lived homeless in Hawaii (he is nutty, but not stupid) for the last 25 years.
My thinking is that we need to provide enough beds, these beds need to be kept safe… especially for children. But that illegal camping should not be allowed.
I wonder sometimes if certain people are wired with a nomadic gene… not wanting to settle down anywhere. They get restless with confinement and need to have the great big sky over their head and see their surroundings change. For them maybe camping seems more natural than being boxed in a room. The problem for them is that camping in this country has developed into a part-time leisure activity that costs money. The closest thing one could get as a permanent camping arrangment is an RV park with a long-term rental agreement. Also, they prefer to camp next to a municiple area where services are located… this just complicates their problem.
We are talking about a bit more than 1% of the total population. 3.5 million is a lot of people, but this is spread over the entire US population of 311 million.
We should not stop trying to improve, but we also need to accept that some percentage of our population will remain homeless despite all we can do. Also, there that 90-10 rule that the last 10% of any problem can take 90% of the total costs to fix. We should start with the low-hanging fruit, and then deal with what we can afford. People totally screwed up from drug abuse are examples of where costs might be too high.
And that is the very problem we face. We have inadequate resources. We do not have real solutions. And we do not even have makeshift ones, but we want to arrest and move the homeless because we consider them a nuisance, a burden, and perhaps even a reminder of our failings as a society.
you would consider them a nuisance too if they were camping on your yard, knocking on your door, and harassing you. Just as long as it is happening to someone else, I guess.
[quote]Also, there that 90-10 rule that the last 10% of any problem can take 90% of the total costs to fix.[/quote]
Excellent observation…
[i]”My natural father who has mental health problems has lived homeless in Hawaii (he is nutty, but not stupid) for the last 25 years.”[/i]
Around 20% to 25% of the U.S. homeless population* is [i]severely[/i] mentally ill. Prior to the closure of state mental hospitals in the 1960s and ’70s, most of those homeless, who cannot manage their own affairs, would have been receiving proper care. That is no longer the case–thanks, ACLU!
A Yolo County employee I know (who works in West Sac but is a Davis resident) told me a few weeks ago that almost 100% of the perpetually homeless she deals with are mentally ill. (I don’t recall if she said “severely” mentally ill.)
She explained that while most homeless people at any one time are not mentally ill, those who are sick with diseases of the mind never improve their circumstances. The others–drug addicts, drunks and those who just need some money or a job–will die of their addictions, move away, sober up, find work, or in some other way find better shelter after 6 months or a year. The mentally ill homeless–many of whom have drug and alcohol problems, too, she said–remain homeless for years and years and years. Their circumstances only get worse over time.
I asked her if she sees a lot of them going to jail for petty crimes or worse, and she said “no,” which surprised me. (A substantial percentage of our encarcerated population is mentally ill ([url]http://www.hrw.org/news/2006/09/05/us-number-mentally-ill-prisons-quadrupled[/url]).) She said the mentally ill homeless in Yolo County get arrested for petty offenses (she mentioned “disturbing the peace”), but usually they are not held in jail for long (the normal pattern, she said, is a short “psych” hold followed by release and return to the streets).
I don’t know if state or federal laws or practical considerations would ever allow it, but my view on improving the lot of the non-mentally ill homeless is that we should be giving them vouchers to rent basic housing, rather than spending the $2.5 to $3 million we are now spending** on “low-income” housing, where most of the money goes to the people who operate or manage these scams.
My belief is that for the homeless mentally ill, we need to start acting as guardians for them: that means forcing them into psychiatric treatment programs; and, if necessary, hospitalizing them until they can live safely outside of an institution.
*See here ([url]http://www.nationalhomeless.org/factsheets/Mental_Illness.pdf[/url]): [quote]According to the Substance Abuse and Mental Health Services Administration, 20 to 25% of the homeless population in the United States suffers from some form of severe mental illness. In comparison, only 6% of Americans are severely mentally ill (National Institute of Mental Health, 2009).[/quote] **Most of the money for low-income housing funds is a part of the RDA budget. By state law (I think), we have to dedicate 20% of all RDA tax-increment funds for low-income housing. Yet, as of today, RDAs no longer exist ([url]http://latimesblogs.latimes.com/lanow/2011/12/california-supreme-court-redevelopment-agency-ruling.html[/url]). So I don’t know where the funds will come from to enrich the shysters who operate our low-income housing programs.
[i]”My belief is that for the homeless mentally ill, we need to start acting as guardians for them: that means forcing them into psychiatric treatment programs; and, if necessary, hospitalizing them until they can live safely outside of an institution”[/i]
I comes down to the degree of mental illness. Considering my biological father, he is pretty high-functioning. He just could not hold down a job and could not trust others after he reached a certain point. He developed pretty strong symptoms of paranoia, but otherwise is fine. I lost contact with him about five years ago ironically after I suggested there was medication he could be taking to help with axiety. His brother – my uncle – later told me that the comment freaked my dad out. He now thinks I am in contact with the authorities concerning him.
That is a problem dealing with some homeless with mental health problems… the person that needs help doesn’t want it, or doesn’t feel it is necessary, or fears it more than the streets.
However, I largely agree that for the more extreme cases we need facilities to care for them. They need to be off the streets where they are in danger and are sometimes a danger to others. I’m not sure about the housing voucher idea. I would worry that it would be taken advantage of by people that really do not need it, and the true needy would not be able to use it appropriately enough.
Jeff
“I’m not sure about the housing voucher idea. I would worry that it would be taken advantage of by people that really do not need it, and the true needy would not be able to use it appropriately.”
I have two questions about your concerns.
1) You have advocated many times for school vouchers. How do you see this situation as different in terms of being taken advantage of by those who do not need it ?
2) If you eliminate the severely mentally ill ( who I believe we agree need protection ), what barriers to
“appropriate use” do you see for the rest ?
Elaine
I found your post very thoughtful. There is one statement on which I would have to disagree.
“Money we as a society probably do not have at the kind of level that is necessary to truly address the problem. “
I see this as money that we most certainly do have, but choose to use in different ways. This is a matter of values. What I see is a society that values power and material goods over basic human needs. Clearly from many posts on many different issues, some of us believe this is a desirable perspective, and some of us do not.
[quote]ERM: “Money we as a society probably do not have at the kind of level that is necessary to truly address the problem. ”
medwoman: I see this as money that we most certainly do have, but choose to use in different ways. This is a matter of values. What I see is a society that values power and material goods over basic human needs. Clearly from many posts on many different issues, some of us believe this is a desirable perspective, and some of us do not.[/quote]
I’m not convinced we do have the kind of money necessary to truly deal with the problem of homelessness (so we may have to agree to disagree on this issue). If you have ever dealt with anyone who is mentally ill (and I have), it is very labor intensive/expensive. They need a huge amount of help relative to the average citizen. Often they are incapable of holding down a job, so need housing, transportation, medical care, mental health services, food, clothing, all at the hands of a benevolent gov’t that really cares. One mentally ill person would cost a great deal if we were to give them what they truly require to live an ideal comfortable life. So we have to settle for less than perfect. One interesting solution is a group home, which works for some but not others. For some mentally ill, no amount of services will help, bc they choose homelessness as a lifestyle, preferring it over any assistance. As I said before, IMO homelessness is a very complex issue with no easy answers. But I do believe more funding should be found for basic mental health/veteran services as a start/minimum…
Eliminate the home mortgage deduction, take the $100 billion a year, and use it for housing vouchers.
[i]”1) You have advocated many times for school vouchers. How do you see this situation as different in terms of being taken advantage of by those who do not need it ?”[/i]
1. Children have advocates… parents and guardians. Many mentally ill do not.
2. Children are developing and are in development mode, so the highest qualifty education through vouchers and choice will amplify benefits as they are better prepared to launch as adults. Most mentally ill will not improve with a voucher, we are only looking for ways to maintain their safety and comfort.
3. Children generally are forced, by law and by our culture, to accept direction from adults. Mentally ill that would be given vouchers are adults and they can refuse direction and make their own decisions.
[i]”Eliminate the home mortgage deduction, take the $100 billion a year, and use it for housing vouchers.”[/i]
You would need to factor the tax revenue drop from economic impacts from making the debt service from the purchase of real estate more expensive and reducing discretionary income from the middle class seeing their tax bill increase.
I’m not adverse to the concept of doing away with certain tax credits, but only if there is a corresponding reduction in taxation. We already spend enough. If you want to direct more money to some cause, then give up something else that is a lower priority. You know, the same thing we do for our family finances on a regular basis.
We subsidize home purchases by giving a huge tax deduction to home buyers. Renters don’t get that, and the homeless certainly don’t. But it is the most fiercely protected special-interest tax break in our country.
I think Jeff’s criticism of my suggestion has validity. I should have added that a housing voucher program (for those living on the streets or rotating in and out of warehouse shelters, but not for those suffering from severe psychiatric problems*) needs to have the proper incentives so that it would not be abused. You don’t want to make someone worse off for having a job, for being a productive member of society.
But at the same time, I think directly giving people a voucher for housing–much like we give vouchers for food–would do more good for more poor people than we are doing with our low-income housing program in Davis (and I would guess other towns in our region). The primary idea (beyond just sufficiently sheltering those without housing) is to cut out the middle-man as much as possible.
… I should add that I do know that there is often a lack of available apartments where the landlord is willing to take (Section 8) vouchers. I don’t know how solvable that problem is. Though I would think the most economical avenue would be to lower the marginal income tax rate on landlords who accept housing vouchers.
*Again, I think we as a society need to act as guardians for those whose psychiatric illnesses are such that they cannot reasonably act for themselves. That does not usually mean we have to hire a social worker or some other public employee. In most cases the guardian (who should be appointed by a court AFTER an independent mental health evaluation is done by at least one qualified mental health professional, maybe two) could be the patient’s family member. …
I have a homeless, severely paranoid schizophrenic in my family (with whom I have completely lost touch). He has four brothers and a sister, any one of whom could act as his guardian. What that would amount to is to make sure he is staying on his meds and making periodic visits to a psychiatrist. If he went off his meds–which he did many times before his condition spiraled into total insanity and homelessness–his guardian should be able to report him to a county facility where he could be held until he was stable and able to go back living with his guardian.
[i]”We subsidize home purchases by giving a huge tax deduction to home buyers.”[/i]
On an income-class basis, the home mortgage deduction is highly skewed in favor of the wealthy. The only other large-scale welfare program* which is even more skewed in favor of the rich is the farm subsidy program** ([url]http://farm.ewg.org/pdf/california-farm.pdf[/url]).
This is what The Weekly Standard reported this week about the home mortgage deduction: [quote] One of the costliest tax deductions in the IRS code is the one that allows homeowners to deduct their mortgage interest from their income. The $477 billion in deductions taxpayers claimed last year (which includes second homes and home equity loans, and covers mortgages up to $1 million) is highly skewed to upper income households concentrated in the suburbs of a few major metropolitan areas and along the coasts.
… not only are they more likely to be buying houses and taking the deduction in Greenwich than in Peoria, but the very nature of any tax deduction in a progressive tax code means that the average benefits of the Greenwich homeowner dwarf what the Peorian is getting. Someone with a $1 million mortgage who earns over $300,000 a year could see the government essentially giving him a $20,000 a year subsidy for his home, while a family making $70,000 a year with a $150,000 mortgage would not receive a penny, since his puny deduction (under $2,000) would be less than the standard deduction.
The president and his supporters have been clamoring for a more progressive tax code that collects more money and makes the rich pay their “fair share.” Here is a tax break that costs the treasury over $100 billion a year that goes almost solely to the wealthy. Incidentally, the $100 billion is almost equal to the amount of revenue that would be gained by repealing the Bush tax cuts for people earning over $250,000 a year.[/quote] *Welfare is what the mortgage deduction is because it improves the welfare of those who get it without their having to earn the money.
**Take a look at the households in Davis and Woodland who have received millions of dollars over the years in cash from the USDA. These are not poor folks, folks.
Jeff
First, thanks for the explanation with regard to the differences you see between school and housing vouchers.
If the equal access to quality schools were guaranteed for all comers, and if all parents and guardians could be relied upon to make the optimal decision, we would be in agreement. I do not see that as the case any more than I see that all homeless would make the optimal decision on how to use their voucher.
“We already spend enough. If you want to direct more money to some cause, then give up something else that is a lower priority. You know, the same thing we do for our family finances on a regular basis.”
Define “enough”. Who gets to determine what this vague “enough” is. I strongly disagree with your previous assertion that what we have is not a revenue but a spending problem. And, I do not agree that the country, state, county or city operates the same way that a family does in terms of finances. But let’s for the moment use your analogy of what your family does in terms of finances. Let’s take my family for instance. I am the sole earner.
We are doing well. I am easily able to cover all bills, provide adequate shelter, feed my family and have the previously described luxuries. Now, let’s suppose we have an unexpected event, a major illness requiring prolonged hospitalization for an adult child ( 22 years old) for example. And let’s suppose that my carefully maintained insurance will no longer cover my child’s cost ( except that now it does due to your much loathed “Obamacare”). Now, am I spending enough? No, I will have to spend more to cover this unanticipated cost. There are two ways I can do this. I can generate more income ( revenue) by working more or I can cut back other expenses. It is dishonest to pretend that I only have one or the other option. I know you are on principle opposed to more taxes without offsets elsewhere. I disagree and feel it is dishonest to claim that raising revenues through taxation is not a viable option. It is a choice, not an impossibility.
[i]”We subsidize home purchases by giving a huge tax deduction to home buyers. Renters don’t get that, and the homeless certainly don’t. But it is the most fiercely protected special-interest tax break in our country.”[/i]
Renters get a tax credit and pay lower costs for housing in general… savings passed on to them by the lower morgage costs derived from the mortgage deduction.
Like I said, I am in support for doing aways with most, if not all, deductions and credits if they are tax neutral. I support a flat tax. However, I am not in favor of any tax increase… even this idea used in the class warfare game.
[i]Renters get a tax credit and pay lower costs for housing
[/i]
Huh?
[i]the class warfare game[/i]
Oh, give me a break. This is getting to be a knee-jerk response from you.
Don,
Renter’s tax credit: [url]https://www.ftb.ca.gov/individuals/faq/ivr/203.shtml[/url]
If I own rental property I likely own a home… maybe a second home too. If my personal tax burden is lower I can pass on some of this good news in the way of lower rents. With a higher individual tax burden, I might need to raise rents to increase my rental revenue. Of couse this is less of a consideration for large multi-property owners. However, much of the rental market is small private owners and these people have their personal and business finances well linked.
In addition, you need to do a present value calcluation of the difference in costs and opportunity costs. Outlays for maintenance, repairs, insurance and utilities almost invariably will be greater for a homeowner than a renter. Also, there is the risk of depreciation and economic immobility (locked in because you now owe more than the property is worth). You also need to factor how much your down payment, and the difference between your rent and mortgage payments, would earn if invested in stocks instead.
It is class warfare. You and others are advocating to increase taxes (by eliminating deductions) on those that own real estate (i.e., higher economic class), to use to distribute benefits to those in a lower economic class.
Any change in tax structure results in a redistribution. Therefore, by your logic, the Bush tax cuts were class warfare. Unless, of course, class warfare only goes in one direction.
The state tax credit you link is $120. Whee.
I am aware of all the factors you list. I suspect that, like many of your other statistics, the statement that “Renters … pay lower costs for housing in general” is not true, particularly as a percentage of their income.
sigh…
[url]http://www.census.gov/compendia/statab/cats/construction_housing/homeownership_and_housing_costs.html[/url]
Median monthly costs for home ownership in CA = $1,852; with 52.8% of owners having a monthly payment 30% or more of their gross household income.
Average monthly rent in CA = $1,155; with 52.2% of owners having a monthly payment 30% or more of their gross household income.
I will wait patiently for your apology since they are not “my” statistics.
Don,
Any change in tax structure that is revenue neutral is not wealth distribution. However, neither is a decrease in tax rates since government and the poor do not create wealth… they can only take if from others that earn it. They cannot distribute what they do not own in the first place. That would be like me taking your car from your driveway and then giving you back the steering wheel and then expecting to be recognized for being charitable.
Class warfare is pitting the wealthy against the poor or the poor against the wealthy. Make any reasonable economic argument for your ideas of increased taxation and it will not be class warfare. What is the economic payback for me having to give more of my hard-earned income to the government to give to others? If your only point is that the wealthy can afford to pay more to help all the poor and disadvantaged, then that is class warfare. Think about it this way, raising taxes on the wealthy will certainly do nothing to strengthen the bonds between these groups… it will create a larger rift.
You and medwoman seem to see the world through class glasses like David sees it through race glasses. (Obama sees through both lenses… and is made more blind). I and others tend to see all American people as all being blessed and having some set of personal capabilities they need to learn how to recognize and exploit, and some set of deficiencies they need to learn how to recognize and minimize. The fact that some may have more material wealth than others does not really matter as long as opportunity to succeed and fail exists.
The wealthy neighbor up the street does not impact your personal opportunity for prosperity, but he can influence your envy. Envy is the source emotion driving class warfare. It is negative. It is pessimistic. It is destructive.
[i]”It is class warfare. You and others are advocating to increase taxes (by eliminating deductions) on those that own [b]… very expensive residential … [/b]real estate (i.e., higher economic class), to use to distribute benefits to those in a lower economic class.”[/i]
Take a step back. Go back to the time before there was a home mortgage deduction which is a huge benefit to the wealthy (see my 10:50 AM post):
Would you have argued that the passage of that deduction was a form of class warfare, in that it highly disproportionately benefits those with the highest incomes (according to The Weekly Standard) and provides almost no tax relief to those making smaller interest payments?
It seems to me that the “class warfare” term is generally used to argue against a policy which pits one income group against another. And thus, because the passage of this tax deduction did that, you would call its original passage a form of class warfare. No?
As such, I would think getting rid of this deduction would be just the opposite: a form of class peace. No?
[img]http://www.frumforum.com/wp-content/uploads/2011/04/farm-subsidies.jpg[/img]
I am likewise interested in your views on farm subsidies. (I think you said you grew up on a farm in the Tremont area?) The hundreds of billions of dollars of US Treasury which goes to subsidize rice farmers and most other types of grain farmers (though not most row-crop fruit and vegetable farmers) is highly skewed to benefit the wealthy. It does not even matter if the people who get these welfare checks are actually farming: they get them if they merely own the land, and even if they only own that land as speculative real estate (including the rich Davis residents who own, but do not farm, the Covell Village property).
My questions to you are two-fold: 1. Is the existence of farmer welfare of this sort class-warfare, because it is so biased to favor the rich? And 2. Would getting rid of these payments to the rich farmers be a form of class warfare, because losing this welfare would harm mostly rich people?
If the answer to both is yes, then it seems impossible to ever have class peace.
Jeff:
At least as of 2000, median income of renter households was half that of homeowner households.
Median income of homeowners: 62,153.
Median income of all Californians: 47,288
Median income of renter households: 31,912.
I’d be very surprised if those ratios have changed to the advantage of renters.
And how much of that mortgage cost is deductible? Might it yield a little more than the $120 tax credit California gives renters? Who, by your numbers, pay $14,000 a year in rent?
Could home buyers possibly spare a little of that deduction to fund housing vouchers for the homeless?
Rich,
[i]”Would you have argued that the passage of that deduction was a form of class warfare, in that it highly disproportionately benefits those with the highest incomes (according to The Weekly Standard) and provides almost no tax relief to those making smaller interest payments?”[/i]
Going back in time to its genesis, yes I would see the mortgage interest tax deduction as unnecessary and a form of government meddling in the free market. However, there were ancillary benefits from this that extended to people of all economic classes as it served to increase home ownership and economic activity related to it. More importantly though is that it has become the new normal. Household budgets are set based on an expected level of discretionary income and it has to factor the total tax liability.
I need to look at your reference that explains that the wealthy benefit more from the mortgage tax deduction. It makes sense on a straight dollar basis because wealthier people pay a higher marginal tax rate, so any reduction in their tax liability would result in greater dollar savings.
However, from a perspective of impacts to lifestyle, I would be surprised that eliminating the mortgage tax deduction would be reported as not hitting the middle class very hard. Personally, I am not wealthy. I have lived in the same 1800 square foot Davis home for 22 years. I have refinanced a few times as rates have plummeted. I have a small (very small) second home in the mountains. I know this puts me on the radar as being privileged, but it was a choice we made rather than do what many middle class people have done over the years and buy-up to bigger and more expensive primary homes. Our home is very modest, but we like it.
Getting back the math. The average monthly payment for homes in CA appears to be about $1800. The average loan is a 30-year fixed and has aged 7 years. If I run a simple interest amortization, that ends up being about $1200 or so in interest per month… or $14,400 per year.
Now, if I consider the average annual taxable income for a homeowner in CA being $75,000… that would translate to a federal marginal tax rate of about 15% and a CA tax liability of about 6%… a total of 21% total marginal tax liability. 21% of $14,400 is $3,024.
I don’t know about you, but $3,024 seems like a pretty big hit to a family with $75,000 in taxable income. That is about the cost of a semester of tuition at a CSU.
Oh… and I am absolutely against farm subsidies as they are welfare payments to farmers and are exploited by non farmers. Go check the mansions out by Davis municipal and note those that have small orchards or vineyards around them. I am guessing that these owners save on their property taxes and also some get farm subsidies.
[i]More importantly though is that it has become the new normal.[/i]
Every tax cut, every deduction, becomes the new normal. But eliminating them is apparently class warfare.
[i]but $3,024 seems like a pretty big hit to a family with $75,000 in taxable income
[/i]
Yes, it does compare very well to $120.
I’d be very surprised if anyone in North Davis Meadows gets farm subsidies for their family orchards. But as Rich has noted before, farm subsidies are a matter of public record.
Don, I would support a phasing out of the farm subsidies and using the proceeds to invest in economic development and services for the mentally ill… including safe housing. I would also support decriminalizing some drugs, and cutting drug enforcement and releasing non-violent prisoners on drug possession convictions, and using the savings to fund detox services for drug abusers.
As for poverty of the able bodied, I would focus all my efforts on:
1. Completely and profoundly reform education. This includes changing the goals to prepare young people for launching into economic self-sufficiency.
2. Focus on economic development to grow the economy and decrease unemployment.
I would also reform all laws and rules for what can be considered a disability. The new rule: “you can whiney, but you cannot sit on your hiney.”
I would make all welfare workfare…. including being much more generous for extending benefits to those that need them as long as they are working. That means working in the agriculture industry where there are plenty of jobs.
Can’t hobby farms get a property tax break in CA?
Don:[i]”More importantly though is that it has become the new normal.
Every tax cut, every deduction, becomes the new normal. But eliminating them is apparently class warfare.
but $3,024 seems like a pretty big hit to a family with $75,000 in taxable income
Yes, it does compare very well to $120.”[/i]
Don, you are leaving out the present value of the down payment and the savings from a monthly rent payment over a mortgage payment. Add that to the $120 and the renter comes out ahead.
The downside to the renter is the inability to benefit from the equity. But that is not guaranteed. The renter will never get that benefit, but he will also never see it go negative.
Assuming both rents and property appreciate at about 2% per year, it takes about 7 years before the purchase starts calculating as the better deal. However, that assumes a 2% per year increase. If property values drop, then renting is the better deal for a much longer period of time.
Now take away the mortgage deduction and it takes 10 years assuming a 2% increase in rents and home values. This then causes more people to drop out of the home buying market and start renting. This then increases rent prices as supply and demand laws kick in.
So you altruistic idea to eliminate the home mortgage deduction to provide vouchers causes poor people to have to pay more for rent. See why I call it “destructive altruism”? If it wasn’t for those darn unintended consequences, huh?
Seems to me the main benefactors of the home interest deduction, besides the wealthy, are banks.
With no interest deduction; home prices would decline to a new market equilibrium.
With home prices reduced, so is the amount of the average mortgage.
The bankers would lose; thus ensuring that eliminating this deduction will never be legislated.
Jeff
“government and the poor do not create wealth… they can only take if from others that earn it”
Or inherit it, or bilk others to acquire it ( Madoff before his scheme collapsed) , or exploit a very dubious “entertainment” industry ( Kardashians)
or use connections they have established socially or politically (lobbyists) and “consultants” ( Gingrich) . Being rich does not make you productive or honorable. It simply means you have a lot of money. You talk a great deal about the “envy ” that the poor feel for the rich. I never seem to hear you talk about the fear that many of the more affluent seem to have that someone else may get something that they feel entitled to, whether or not the poorer individual works as hard or harder than they do. And as far as the poor not creating wealth, we will just have to disagree on that. If inexpensive labor does not make for higher profits, thus generating more wealth, there would be no outsourcing of jobs or opposition to a minimum wage or collective bargaining.
Medwoman–nice counterbalance to Jeff. Although there is likely an evolutionary selective advantage to counting the rich and powerful as allies (maybe in the hope they can join that tribe someday); which I think partially accounts for the visceral support of much of the middle class of policies that benefit primarily the wealthy.
You left out the monied interests behind campaigns and lobbying to further promote laws in favor of the wealthy, the too-big-to-fail fatcats, and those who live off interests and investments; essentially a parasitical existence, although theoretically at least they may be helping with the efficient allocation of capital.
Furthermore I propose that there is always class warfare; or you might say a tension between the rich and the poor; many of both tribes of whom are lazy and contribute little or nothing to civilization; and many of whom contribute much (leveraged in the case of the rich). This tension can be healthy or unhealthy; many perceive the distribution of wealth to be getting too skewed and unhealthy for society as a whole; unless you would prefer to have an income distribution like many south american countries.
[i]”I’d be very surprised if anyone in North Davis Meadows gets farm subsidies for their family orchards.”[/i]
I am not aware of any residential properties on or near Silverado Drive in NDM which has anything which could be called an orchard, other than one house right on Rd 29 which is actually not a part of North Davis Meadows (it was never owned by the NDM developers). Likewise, there are no orchards on or near Fairway Drive.
That said, there is a type of rural development which is becoming more common in California (though I think has not been active since the economy tanked in 2008). That is to take a normal sized farm, say 640 acres, and divide it into 40 acre mini farms, which county zoning laws generally allow. If you do that, you have 16 parcels, and you can build a McMansion on each one, using say 2 acres out of 40 for each “estate.” On the other 38 acres, you can plant a walnut orchard. Thus, on 640 acres, you will have one large walnut orchard of 608 acres plus 32 acres of home plots for McMansions and nice sized yards.
There is one of these developments on Road 104 south of South Davis and another along Becker Road, east of Old Davis Road.
One thing to keep in mind: the welfare payments to grain farmers are not, as far as I know, available to almond, prune, pear or walnut orchardists. I think the one tax advantage orchard farmers do get is a rapid depreciation expense of the value of their trees. In other words, an orchard which will normally be productive for 25 or 30 years can be depreciated as if all the trees were infertile over a much shorter period of time, like 10 years. (Perhaps someone in the business knows just how this works. I am not sure of the exact numbers, but recall that one of my neighbors, who is an ag economist and emeritus professor, explained that to me years ago.)
[i]”There is one of these developments on Road 104 south of South Davis and another along Becker Road, east of Old Davis Road.”[/i]
The Binnings tried to do this, also, on their land north of the Sutter Davis Hospital and south of Barry/Sharon Road. However, I was told around 2007 that they sold out to a developer who is holding that property as one with the hope of getting the City of Davis to grow in that direction in the future and allow them to turn “northwest Davis” into a lot of single family homes.
[i]”medwoman–nice counterbalance to Jeff. Although there is likely an evolutionary selective advantage to counting the rich and powerful as allies (maybe in the hope they can join that tribe someday); which I think partially accounts for the visceral support of much of the middle class of policies that benefit primarily the wealthy.”[/i]
Nope… just know that wealthy are just people too… same as poor people except for the money thing… which can be reversed.
[quote]My belief is that for the homeless mentally ill, we need to start acting as guardians for them: that means forcing them into psychiatric treatment programs; and, if necessary, hospitalizing them until they can live safely outside of an institution.
I have a homeless, severely paranoid schizophrenic in my family (with whom I have completely lost touch). He has four brothers and a sister, any one of whom could act as his guardian. What that would amount to is to make sure he is staying on his meds and making periodic visits to a psychiatrist. If he went off his meds–which he did many times before his condition spiraled into total insanity and homelessness–his guardian should be able to report him to a county facility where he could be held until he was stable and able to go back living with his guardian
*Again, I think we as a society need to act as guardians for those whose psychiatric illnesses are such that they cannot reasonably act for themselves. That does not usually mean we have to hire a social worker or some other public employee. In most cases the guardian (who should be appointed by a court AFTER an independent mental health evaluation is done by at least one qualified mental health professional, maybe two) could be the patient’s family member. … [/quote]
Good question – Who should take responsibility for our family members?
“Good question – Who should take responsibility for our family members?”
I can tell you, having stepped up to help two children of family members, it is a tremendous burden on the family members. The sad thing is that if these kids were in the foster system, a foster family would be receiving $610 a month per child from the state, but because it’s family we get nothing. Family members would love to step up and help if provided resources to do so.
[quote]Household budgets are set based on an expected level of discretionary income and it has to factor the total tax liability. [/quote]
That is my problem with doing away w the mortgage deduction – many counted on the mortgage deduction to be able to afford the home. Take the mortgage deduction away ex post facto (after the fact), and they could lose their home… as Jeff points out, unintended consequences…
Elaine: It is the lesson of the cat… don’t let it out of the bag to begin with and we won’t have to struggle to put it back in. It is much easier to grow entitlements than it is to shrink them. Every change to any goverment budget and every change to economic policy needs a full, comprehensive, long-term cost-benefit analysis. We also need an exit strategy for those with risks of costs exceeding benefits. Everything can be quantified to dollars and sense. Business does this. Government can do it. Politicians do not want this because it creates transparency that limits their power of the purse… their ability to spend other people’s money to gain political power and enrich themselves.