poverty and protective services

[Bluegoat]

You may be right but I am not convinced (but I wish I was as I would absolutely love having a UBI). I realize UBI wouldn't get people off drugs or fix any other issues. Still, I tend to think if the majority of the population had x amount more money it would create issues - not exactly sure which but inflation comes to mind. 

 

I guess what I am thinking is this: If I had an apartment to rent out I would obviously want to get as much money for it as I could. Many people buy houses so they would not be potential renters. But there is a group of people who would be interested in my imaginary apartment. Now, if they had X amount more money for the most part I could probably get more rent than before unless there is an oversupply of apartments. 

 

Obviously there would also be other effects as people would have more disposable income. It is hard though to tell exactly what would happen. And that is pretty risky if one wants to start an "experiment" in a country.

 

Wel, the same argument gets made about minimum wage, but it doesn't seem to hold there.

 

Here's what I would say about your apartment example.  Let's say in a city there is an adequate amount of housing for the population.  say, 6000 people, so 6000 units of housing.  All the landlords want to rent out those units rather than have them sit idle.  If they are all going to be rented out, some are going to have to be affordable to the people with the lowest incomes.

 

It's only when there is too little housing that you start to see the lowest squeezed out.

 

Now, it might be that it turns out to be in the interests of the landlords to keep the housing market short of units so they can charge more.  THat's when public policy comes in, and why I think it seems that there are few places where the market is actually able to supply the housing needs of the population of its own accord.

[Twolittleboys]

It is generational and it is ingrained and it is very sad.  

 

I absolutely agree - it is very sad and honestly I don't think there is a way to fix it in the short term.

 

I think key for the long term is to 

 

a) prevent people from sliding down (e.g. by good health care, help in disaster situations etc.)

 

and 

 

b) to slowly improve the situation generation by generation. Here again good free health care (e.g. prenatal, well baby visits, immunizations etc.) is important but also education.

 

If we can manage to get people up just one step on the ladder it is already something even if it falls far short of the ideal.

[Murphy101]

They want an infant, probably of a certain color, who was not born with a history of drug exposure or mental illness in the family. They want a nice girl Iike them to give up the baby.

The foster system is not exactly some cake walk to parenthood. The children often have life long special considerations that mean they can't be placed with just any applicant. A 6 yr old child who was sexually abused won't be placed in a home with younger children. Siblings might not be placed together but need homes committed to maintaining their connection. And then there is the finance and health and so forth of the foster family requirements. And yes, the health of the child is a factor. Triple so in a nation that provides little to no mental health services and has no UHC. Many 2 income families who would love to adopt a foster child just flat out can't because the needs of the child would require one of them stay home and lose income while also costing them a lot of money to care for.

 

I'm all for foster children finding forever loving homes but the reasons they don't is not necessarily because no one wants them. The system often seems designed specificly to make it very hard for them to ever leave it.

[EmseB]

They want an infant, probably of a certain color, who was not born with a history of drug exposure or mental illness in the family. They want a nice girl Iike them to give up the baby.

That's kinda gross and not representative of my personal friends who are adopting and fostering and doing really hard stuff.

 

I have three good friends who have adopted children of color and/or special needs kids, some of whom were not babies. There are not enough people doing this kind of hard stuff, but there are people doing it. No need to make blanket statements that are completely uncharitable and demonstrably untrue for many people who are fostering and adopting.

[Scarlett]

A former neighbor of mine.... he is about 95 now--was raised in an orphanage from 18 months until age 12. He loved his life there. It was in Chicago. The nuns were good to them, although strict.

 

An uncle adopted him out when he was 12 and brought him to Arkansas. He hated it. He is a big proponent of bringing back orphanages.

Edited September 20, 2017 by Scarlett

[Murphy101]

A former neighbor of mine.... he is about 95 now--was raised in an orphanage from 18 months until age 12. He lived his life there. It was in Chicago. The nuns were good to them, although strict.

 

An uncle adopted him out when he was 12 and brought him to Arkansas. He hated it. He is a big proponent of bringing back orphanages.

My husband's grandma and her two siblings were raised in a baptist orphanage. Their dad dropped them off a few days after their mom died and they never saw him again. They grew up together in a stable place and they all became good citizens and contributed to society. They all went to college and had successful careers and stable families. Not saying all orphanages are like that, but they weren't all awful and some did provide a stable place with role models and opportunities.

[PineFarmMom]

That's kinda gross and not representative of my personal friends who are adopting and fostering and doing really hard stuff.

 

I have three good friends who have adopted children of color and/or special needs kids, some of whom were not babies. There are not enough people doing this kind of hard stuff, but there are people doing it. No need to make blanket statements that are completely uncharitable and demonstrably untrue for many people who are fostering and adopting.

I agree. I have many friends who adopt and it doesn't represent, well, anyone I've come in contact with. Quite unkind.

[Scarlett]

My husband's grandma and her two siblings were raised in a baptist orphanage. Their dad dropped them off a few days after their mom died and they never saw him again. They grew up together in a stable place and they all became good citizens and contributed to society. They all went to college and had successful careers and stable families. Not saying all orphanages are like that, but they weren't all awful and some did provide a stable place with role models and opportunities.

Yep. My neighbor was a lovely man. He was a post man and he raised a lovely family. He was married for like 60 years before his wife died.

 

He feels his uncle adopted him to be a workhorse on the farm in Arkansas. They would leave him alone for weeks at a time. He hated it. And he loved the orphanage.

 

As much trouble as there is finding adequate foster families it seems to me the country may have to go back to something like orphanages.

[MotherGoose]

That's kinda gross and not representative of my personal friends who are adopting and fostering and doing really hard stuff.

 

I have three good friends who have adopted children of color and/or special needs kids, some of whom were not babies. There are not enough people doing this kind of hard stuff, but there are people doing it. No need to make blanket statements that are completely uncharitable and demonstrably untrue for many people who are fostering and adopting.

My comment was in reference to a PP frustration with all the people saying they would adopt some abused kid mentioned on the news in a minute and wondering why those people didn't go ahead and adopt some kids then, rather than letting them languish in foster care.

 

I have the absolute utmost respect for people adopting out of foster care. I used to be a social worker and I know adoption is hard. I worked with families who thought if they just loved this sweet six year old reactive attachment disordered abuse survivor she would surely appreciate it. I think th General public just has no idea but thinks of adopting a sweet infant like them when they think of adoption. Plus, most infants are adopted. It's the older kids who have the troubles.

 

Seriously, please know I completely appreciate all adoptive parents.

[Scarlett]

That's kinda gross and not representative of my personal friends who are adopting and fostering and doing really hard stuff.

 

I have three good friends who have adopted children of color and/or special needs kids, some of whom were not babies. There are not enough people doing this kind of hard stuff, but there are people doing it. No need to make blanket statements that are completely uncharitable and demonstrably untrue for many people who are fostering and adopting.

In Mother Goose's defense I don't think she's talking about people like your friends who are adopting all kinds of kids of different ages. She's talking about the people who are claiming there are no babies to adopt. And yes there are some people who want to adopt only a healthy white infant.

[MotherGoose]

My comment was in reference to a PP frustration with all the people saying they would adopt some abused kid mentioned on the news in a minute and wondering why those people didn't go ahead and adopt some kids then, rather than letting them languish in foster care.

I have the absolute utmost respect for people adopting out of foster care. I used to be a social worker and I know adoption is hard. I worked with families who thought if they just loved this sweet six year old reactive attachment disordered abuse survivor she would surely appreciate it. I think th General public just has no idea but thinks of adopting a sweet infant like them when they think of adoption. Plus, most infants are adopted. It's the older kids who have the troubles.

Seriously, please know I completely appreciate all adoptive parents.

  

I agree. I have many friends who adopt and it doesn't represent, well, anyone I've come in contact with. Quite unkind.

Multiquoting here to make sure you see this. In no way am I being unkind to adoptive parents.

[Murphy101]

It's not a statement about those who have already adopted but it is a statement about those who would like to and haven't. And tho there are some like she described, most of the people I know who would love to adopt through the foster system don't are for reasons that have nothing to do with only wanting a healthy white newborn.

[MotherGoose]

It's not a statement about those who have already adopted but it is a statement about those who would like to and haven't. And tho there are some like she described, most of the people I know who would love to adopt through the foster system don't are for reasons that have nothing to do with only wanting a healthy white newborn.

I made a perhaps too flippant comment about the general public. Not directed at anyone who has truly explored the foster care system and knows what's going on. The generic Facebook commenter who says about the abused child in the news, "oh someone should adopt her! I would adopt her in a minute! " but never goes beyond a Facebook post. Not someone who has seriously investigated adoption and realizes it's not for them. Not someone who feels the special needs of the child are unaffordable. The generic person who thinks adoption is sunshine and roses and hasn't gotten to the reality. Seriously, I have the utmost respect for anyone who adopts, or who even seriously tries to adopt from foster care. I've even thought about adoption myself. If I could assure dh of a healthy infant with no family history of issues or drug exposure, he might go for it too. But not with all the strings.

Edited September 20, 2017 by MotherGoose

[Frances]

I was not trying to be mathematically correct, but yeah, my taxes are mega high and a high % of people only pay sales tax. Especially when you adjust for the fact that many of those people are receiving tax-funded benefits and refundable tax credits, which could be considered a negative tax ... if you divide my tax by zero you get a lot more than 1,000. :)

 

And I don't mind paying more than a lot of people, but let's not pretend it's just like buying groceries.

I don't think it's true that a high (however that is defined) percentage of people only pay sales taxes. Unless their housing is completely paid for by the government,they are paying property taxes either directly if they own or indirectly if they rent. If they are working, they are paying SS and Medicare taxes. And many states tax income at much lower levels than the Feds. While it's true that the federal income tax is quite progressive, especially if you have children, and some people pay nothing or even get money, most other taxes are quite regressive. So on balance, many relatively modest income people do pay a fairly good percentage of their income in taxes.

[Ravin]

So you would be okay with your family's hard-earned dollars to a substance abuser who refused treatment and will just use the money to buy more drugs and/or alcohol?

 

I don't have a problem with funding support services for that individual but I am dead-set opposed to "no strings attached" cash payments.

 

 

The percentage of people who are such hard case addicts is much lower than the percentage of people who are labeled as such.

[Carol in Cal.]

I don't think it's true that a high (however that is defined) percentage of people only pay sales taxes. Unless their housing is completely paid for by the government,they are paying property taxes either directly if they own or indirectly if they rent. If they are working, they are paying SS and Medicare taxes. And many states tax income at much lower levels than the Feds. While it's true that the federal income tax is quite progressive, especially if you have children, and some people pay nothing or even get money, most other taxes are quite regressive. So on balance, many relatively modest income people do pay a fairly good percentage of their income in taxes.

It is deceptive to claim that renters 'pay property taxes indirectly'.

The property owners owe and pay those taxes, whether they have renters or not, and whether the rent is sufficient to pay all expenses and maybe show a profit or not.  

[Tanaqui]

But wouldn't there be an impact on prices if a large number of people suddenly had X amount more?

 

The answer is "We don't know, but if so, it's not all that large". Economists have studied this issue as it relates to the minimum wage, and results are mixed, at best. This suggests to me that there isn't really a correlation at all... but that's just a layman's opinion :)

 

The property owners owe and pay those taxes, whether they have renters or not, and whether the rent is sufficient to pay all expenses and maybe show a profit or not.

 

Sure, but it'd be nice to be able to count some or all of the rent for your place of residence as a deduction.

 

So you would be okay with your family's hard-earned dollars to a substance abuser who refused treatment and will just use the money to buy more drugs and/or alcohol?

 

Well, it's like this. Addiction is a disease. Nobody wakes up and goes "Gosh, I'd really like to alienate my friends and family, and get really sick, and throw away my life!"

 

So let's say you have an addict who spends $500 a month on drugs. Coincidentally, it'll cost the same amount to house and feed this addict. You can give them $500 a month, but then they'll be sleeping on the ground and eating out of the garbage. Or you can give them enough to feed themselves and have a roof over their heads.

 

Really, there's only one moral choice. (And if they have food, and a roof over their heads, they may finally be in a mental place where they can deal with their addiction. Or they may not, but at least they aren't living on the filthy streets and eating garbage!)

 

[ChocolateReignRemix]

Okay, but what I am wondering is this:

 

Let's say everyone gets a certain amount x from the government, no means tested and you can earn more money without losing it. Sounds good to me but I am wondering how it would affect different groups (just looking at the getting part here, not the giving):

 

People that are now poor/on welfare etc.: They probably would have the same amount of money about as now (as I assume welfare provides enough to survive on and UBI would probably be similar). There would be less restrictions (compared to food stamps etc.) which may be good or bad depending on the individual recipient (and one's general world view). There would no longer be a need to patch together various sources of help, less need to check/administer, it would be less embarrassing/humiliating. So maybe overall a benefit (cost similar to now but less administration) aside of people making worse decisions with this money (don't think that would be much of a problem though). 

 

People with lower to middle incomes: They would either be able to reduce hours/work and keep their income more or less the same or they could work as before and have more money (they could also completely stop working but probably not that many would want to reduce their standard of living). So if prices stay the same both groups would be better off. The people working less likely would have more time for family, volunteering etc. which would be a public good. These people would either have the same money as now or up to x+previous

 

People with fairly good to very high incomes: Some might reduce their hours etc. but probably not a lot as UBI won't make much of a difference to them. Generally, they would have x + previous or a little less money. Overall, it really wouldn't make a difference.

 

So there would probably be a mostly emotinal benefit for the poorest group, actually more money or time for the middle and little changes for the top earners. But I do worry about the effect on prices. Wouldn't they increase? Generally, prices for housing, services etc. go up in areas with high salaries (or maybe the other way around?) And wouldn't the low income group that relies on UBI be the most disadvantaged by this? The rich would probably be fine as they are more likely to have rental income etc.

 

I posted this earlier in the thread.

 

 

 

Inflation is a bit more complicated than what many people think.  People often think more money = inflation, when inflation actually is driven by too much money chasing too few goods.  (Keeping in mind that "money" is encompasses more than the the total value of currency in a market and also factors in how quickly a given unit of currency is turned over in the economy.  If you increase the money supply but people don't spend the money, then you have a smaller inflationary effect.)

 

Increasing the minimum wage or creating a UBI doesn't automatically mean there will be a massive inflationary effect.  The effect would be greater in lower income areas where there often is a smaller supply of goods. Example: decent housing in a low income area would likely increase in value as more people could now afford better housing.  More run down rentals would likely see a (probably much) smaller increase in rent as there would be a lower demand for those units.  The short term inflationary effect would likely be offset to some degree by the market over time as landlords would now find more value in providing decent housing, which would lead to an increase in supply.  Short term: more money (higher wages) chasing too few goods (quality housing) = inflation.  Long term the housing supply would increase which bring us back to a market equilibrium.

 

If the income increase was via the minimum wage, you would see more inflation in certain markets (fast food likely being a good example) where wages have a higher impact on the bottom line, but you would see close to zero impact in others (ex. manufactured goods where wages are already > than minimum wage).  The market effects for many consumer goods wouldn't be impacted by the higher incomes for minimum wage earners as many of those goods are already being purchased by low wage workers being subsidized in other ways (SNAP, food banks, section 8, etc).

 

Edited September 20, 2017 by ChocolateReignRemix

[EmseB]

The answer is "We don't know, but if so, it's not all that large". Economists have studied this issue as it relates to the minimum wage, and results are mixed, at best. This suggests to me that there isn't really a correlation at all... but that's just a layman's opinion :)

 

 

Sure, but it'd be nice to be able to count some or all of the rent for your place of residence as a deduction.

 

 

Well, it's like this. Addiction is a disease. Nobody wakes up and goes "Gosh, I'd really like to alienate my friends and family, and get really sick, and throw away my life!"

 

So let's say you have an addict who spends $500 a month on drugs. Coincidentally, it'll cost the same amount to house and feed this addict. You can give them $500 a month, but then they'll be sleeping on the ground and eating out of the garbage. Or you can give them enough to feed themselves and have a roof over their heads.

 

Really, there's only one moral choice. (And if they have food, and a roof over their heads, they may finally be in a mental place where they can deal with their addiction. Or they may not, but at least they aren't living on the filthy streets and eating garbage!)

Except you're assuming an addict is going to nicely budget out their $500 a month habit and then pay their rent and buy food because you've so helpfully given them the money to do so. That's not what's going to happen and giving them that kind of money is the opposite of the only moral choice. It is enabling a wasting disease and lifestyle and, really, it is worst kind of evil.

 

The only addicts I've known in my life to get help are those who have had to deal with the consequences of their addiction, and the longer people shielded them from their consequences, the worse things got in every way for everyone involved.

[MotherGoose]

Except you're assuming an addict is going to nicely budget out their $500 a month habit and then pay their rent and buy food because you've so helpfully given them the money to do so. That's not what's going to happen and giving them that kind of money is the opposite of the only moral choice. It is enabling a wasting disease and lifestyle and, really, it is worst kind of evil.

 

The only addicts I've known in my life to get help are those who have had to deal with the consequences of their addiction, and the longer people shielded them from their consequences, the worse things got in every way for everyone involved.

True. If you wanted to give them a place to sleep and food they couldn't sell for drugs equaling $500, then we could discuss. But giving an addict cash is not a good idea.

[Frances]

It is deceptive to claim that renters 'pay property taxes indirectly'.

The property owners owe and pay those taxes, whether they have renters or not, and whether the rent is sufficient to pay all expenses and maybe show a profit or not.

People on this board who are landlords have stated that they do include the cost of property taxes in rent. Most people are not continuously losing money on rentals, unless that is a tax strategy. And at least where I live, the housing market is so tight that landlords can charge way beyond their costs for rent and still have people lining up to apply.

[EmseB]

True. If you wanted to give them a place to sleep and food they couldn't sell for drugs equaling $500, then we could discuss. But giving an addict cash is not a good idea.

Even then, there's a reason that parents, friends, and rehabs will not let addicts stay with them if they are using. Assets, even food and housing, are fungible, and can and are used to support a habit. A habit that, if supported without strings, will eventually kill a person.

 

Of course an addict doesn't set out to become one. And it is a hard, sad thing to watch someone destroy themselves. But many, many people have found themselves in codependent hell trying to provide support for an addict by simply giving them what they need to live. And disease though it may be, only the addict can decide to treat the disease.

[MotherGoose]

Even then, there's a reason that parents, friends, and rehabs will not let addicts stay with them if they are using. Assets, even food and housing, are fungible, and can and are used to support a habit. A habit that, if supported without strings, will eventually kill a person.

 

Of course an addict doesn't set out to become one. And it is a hard, sad thing to watch someone destroy themselves. But many, many people have found themselves in codependent hell trying to provide support for an addict by simply giving them what they need to live. And disease though it may be, only the addict can decide to treat the disease.

True!

[Carol in Cal.]

 

The only addicts I've known in my life to get help are those who have had to deal with the consequences of their addiction, and the longer people shielded them from their consequences, the worse things got in every way for everyone involved.

My experience is different.

 

Making addicts deal with all of their consequences sometimes results in their deaths.  That is not OK with me.

 

And I have seen addicts turn themselves around without being allowed to 'hit bottom'.

[Carol in Cal.]

People on this board who are landlords have stated that they do include the cost of property taxes in rent. Most people are not continuously losing money on rentals, unless that is a tax strategy. And at least where I live, the housing market is so tight that landlords can charge way beyond their costs for rent and still have people lining up to apply.

 

The fact that property owners prefer to at least cover their expenses with rent does not mean that the renter is paying property taxes.   Neither does the fact that landlords in some areas can charge more than their expenses.

 

Many, many people continuously lose money on rentals for quite a few years for various reasons, some within their control and some outside of their control.

 

None of these things mean that the renter is paying property taxes.  It is the property owner who pays property taxes.  That is the point.  To say otherwise is to be untruthful.

 

You might just as well say that if someone is working for, say, Exxon, and paying property taxes on their primary residence, that Exxon is paying those property taxes.  It's equally erroneous, and extremely mistleading.

[Frances]

The fact that property owners prefer to at least cover their expenses with rent does not mean that the renter is paying property taxes. Neither does the fact that landlords in some areas can charge more than their expenses.

 

Many, many people continuously lose money on rentals for quite a few years for various reasons, some within their control and some outside of their control.

 

None of these things mean that the renter is paying property taxes. It is the property owner who pays property taxes. That is the point. To say otherwise is to be untruthful.

 

You might just as well say that if someone is working for, say, Exxon, and paying property taxes on their primary residence, that Exxon is paying those property taxes. It's equally erroneous, and extremely mistleading.

I guess we will have to agree to disagree.

[Bootsie]

According to the studies I've read (OECD) , it's estimated that about 25-30% of Greece's economy is in shadow--meaning that taxes are owed, but not collected. Bulgaria, Romania, and Italy have similar figures. By contrast, UK's number is about 12.5%.  Greece's economy is further complicated with about 1/4 of the Greek population is out of work.  In many cases, it's the pensioners supporting an extended household. But the elderly, sick, and disabled exist everywhere. It's not like they magically are ever all going to disappear.  The average Greek pension benefit is 722 euros a month, not exactly a "large government benefit" by any stretch.

Yes, there is a large shadow economy in Greece.  People are working but not paying taxes.  So, when you look at a 25% unemployment rate, that is very misleading.  Many of these people are working in the shadow economy (and not paying taxes).  Greece has a problem that it's government is spending much more than what it is collecting in tax revenue  You can say that is either that it is not collecting enough in taxes or that it is spending too much.  

[Bootsie]

 

 

None of these things mean that the renter is paying property taxes.  It is the property owner who pays property taxes.  That is the point.  To say otherwise is to be untruthful.

 

You might just as well say that if someone is working for, say, Exxon, and paying property taxes on their primary residence, that Exxon is paying those property taxes.  It's equally erroneous, and extremely mistleading.

It is not untruthful to say that a renter pays property taxes if you are talking about the economic burden of the tax (which is where the real impact of a tax is).  Economists make a clear distinction between the economic burden of a tax (who really pays the tax) and the legal burden of a tax (who is required to remit the payment to the government).  

 

This is not the same as the Exxon example.  The existence of the property tax does not interfere with or impact the labor market for Exxon employees.  Therefore there is no economic or legal burden on Exxon for the property tax.

[EmseB]

My experience is different.

 

Making addicts deal with all of their consequences sometimes results in their deaths.  That is not OK with me.

 

And I have seen addicts turn themselves around without being allowed to 'hit bottom'.

 

Yes, and sometimes giving them cash money with no strings attached enables them and that results in their death.  The only way a person would know the difference is if they were individually involved in that addict's life and cared about them enough, loved them even, to do the right thing by them, whether that be pulling resources away, or giving them more resources, or giving them resources conditionally and then following through. The love and hard choices one has to make are, incidentally, entirely impossible for a government bureaucracy to differentiate or deal with, especially if we're talking about a blanket policy of simply giving everyone extra spending cash. That was my larger point. The poster I was responding to seemed to believe that giving someone money to cover their habit, and a house, and food would keep them off the streets at least and it was the only moral thing to do.  My point was that, depending on the person, it could be a highly immoral and possibly even fatal thing to do to an addict.

 

But I haven't, incidentally, seen an addict get treated without a cataclysmic even in their own lives, but that may not meet your definition of hitting bottom.  Sometimes, hitting bottom for someone simply means realizing their behavior crossed a line even if they haven't run out of resources (yet). Bottom is different for everyone.

 

To the larger point of the thread and UBI, I mean, many here seem to live really charmed lives where no one they know would make really horrible choices with an extra $30k per year, and I genuinely think it's awesome that they've never seen how free money can destroy a person's motivation, or send them pleasure seeking to their own detriment, or enables them to make really poor decisions that result in more actual debt than they started with in the first place. It is crazy making.  If you've never had someone in your life hire a sleazy lawyer from a late night ad because they were denied disability for their "neck injury" from 1995, and then slowly declined into less and less of a person able to work and be a productive member of society because they were getting cash every month from the government, then I'm truly, truly happy for you. I don't mean that facetiously.  But those sleazy lawyer ads come from somewhere. They prey on someone, and on a system that they can exploit. And if you haven't seen that happen, it's easy to be self-righteous about how great it is to take care of those who are disabled.  And it is great to take care of the disabled. But sometimes, a monthly check isn't taking care of someone, it's cutting them off at the knees and letting them slide into government funded depression and oblivion.  But of course, if someone says that the disability program might not be the best way to take care of the disabled, it means we don't care about disabled people and are selfish. That is the canard, right?

 

And maybe these cases are outliers and I've just lived or worked or traveled through the wrong places or have a history of something running through my family.  But isn't it the outliers we'd be trying to help? Those that can't rise up from their circumstances because of whatever reasons?  I'm pretty sure that for a lot of those people, a cash payment would not be well received.

[TechWife]

People on this board who are landlords have stated that they do include the cost of property taxes in rent. Most people are not continuously losing money on rentals, unless that is a tax strategy. And at least where I live, the housing market is so tight that landlords can charge way beyond their costs for rent and still have people lining up to apply.

My sister was considering renting out her home recently- included in he rent would have been the mortgage, the homeowners insurance, property taxes, HOA dues, the fee for he management company as well as a set amount for a repair fund. A landlord can include whatever they want when determining how much to charge for rent.

[Twolittleboys]

Wel, the same argument gets made about minimum wage, but it doesn't seem to hold there.

 

Here's what I would say about your apartment example.  Let's say in a city there is an adequate amount of housing for the population.  say, 6000 people, so 6000 units of housing.  All the landlords want to rent out those units rather than have them sit idle.  If they are all going to be rented out, some are going to have to be affordable to the people with the lowest incomes.

 

It's only when there is too little housing that you start to see the lowest squeezed out.

 

Now, it might be that it turns out to be in the interests of the landlords to keep the housing market short of units so they can charge more.  THat's when public policy comes in, and why I think it seems that there are few places where the market is actually able to supply the housing needs of the population of its own accord.

 

It isn't so much that I think inflation/higher prices WOULD happen but that I don't know what would. Giving everyone a basic income must have some effects on the economy/market and they might be significant/detrimental. 

 

As far as housing is concerned, the number of units available wouldn't change right away. You won't ever have a perfect match. Saying that landlords might keep the market short to make a profit which makes them sound kind of mean. I think it is better to look at it like this: You have a certain amount of investment capital and you can use it different ways (e.g. spend it for fun, buy shares, buy/build housing etc.). It only makes sense for people to choose to invest in housing if the rewards (rent) are better than the cost (investment/work involved). UBI could mess with any of those (or not). 

 

I posted this earlier in the thread.

 

 

 

Inflation is a bit more complicated than what many people think.  People often think more money = inflation, when inflation actually is driven by too much money chasing too few goods.  (Keeping in mind that "money" is encompasses more than the the total value of currency in a market and also factors in how quickly a given unit of currency is turned over in the economy.  If you increase the money supply but people don't spend the money, then you have a smaller inflationary effect.)

 

Increasing the minimum wage or creating a UBI doesn't automatically mean there will be a massive inflationary effect.  The effect would be greater in lower income areas where there often is a smaller supply of goods. Example: decent housing in a low income area would likely increase in value as more people could now afford better housing.  More run down rentals would likely see a (probably much) smaller increase in rent as there would be a lower demand for those units.  The short term inflationary effect would likely be offset to some degree by the market over time as landlords would now find more value in providing decent housing, which would lead to an increase in supply.  Short term: more money (higher wages) chasing too few goods (quality housing) = inflation.  Long term the housing supply would increase which bring us back to a market equilibrium.

 

If the income increase was via the minimum wage, you would see more inflation in certain markets (fast food likely being a good example) where wages have a higher impact on the bottom line, but you would see close to zero impact in others (ex. manufactured goods where wages are already > than minimum wage).  The market effects for many consumer goods wouldn't be impacted by the higher incomes for minimum wage earners as many of those goods are already being purchased by low wage workers being subsidized in other ways (SNAP, food banks, section 8, etc).

 

Thanks for reposting - I did not see it earlier in the thread. While I do agree with your explanation I still feel uncertain about the effects. I think they would be a lot more for UBI than for a minimum wage as UBI would give everyone more money while minimum wage only applies for people who work but in a relatively low paying job. 

 

I wonder if there are any decent computer models trying to predict what would happen? Obviously computer models aren't perfect but they are getting pretty good in many areas and pose no actual risk. Model projects don't really work either unless you have a whole society (e.g. a small country) as the overall effect wouldn't be the same.

 

I guess I would vote for a UBI that phases out with rising income. It is more unfair and discourages working more but would have less of a total effect (as it mostly replaces wellfare). It might also help to drive up minimum wage naturally (as people would take UBI instead of working for less). It would save administration cost so the overall cost might be manageable.

[FaithManor]

I don't think it's true that a high (however that is defined) percentage of people only pay sales taxes. Unless their housing is completely paid for by the government,they are paying property taxes either directly if they own or indirectly if they rent. If they are working, they are paying SS and Medicare taxes. And many states tax income at much lower levels than the Feds. While it's true that the federal income tax is quite progressive, especially if you have children, and some people pay nothing or even get money, most other taxes are quite regressive. So on balance, many relatively modest income people do pay a fairly good percentage of their income in taxes.

And some cities have income tax as well. Baltimore, DC, Louisville, etc. Flint Michigan charges all non residents of the city who work in the city an income tax.

 

Many people think of taxes only in light of taxes, but there so many layers of taxes in this nation that no one escapes.

[Guest]

Property tax is one of the problems.  The way its set up here, the property tax on a multlifamily dwelling doesn't pay for the services its residents consume.  Nor does the tax on a single family that has been illegally converted to a multifamily residence, and there aren't enough 'rich' to make up the difference as the 'rich' don't live here.

 

One can't just convert everything to dense housing.  Sure, someone else can pay for infrastructure, but there's a point where the geography just doesn't work.  In my area, people continually say its unjust not to build large 'affordable' apt complexes.  However, we aren't sitting on enough water to supply the existing residents' drinking and sewage needs.  The ones who have illegally filled every spare bedroom, garage, barn and driveway have in the space of five years taken our water&sewer system from 50% of capacity to 115%.  The existing taxpayers are tapped out.. they expanded when the 9/11 wave came and they havent seen enough business since to accumulate enough to fund more expansion for the current population wave.  We are in a drought...the wells are running dry.  We are hundreds of miles from the ocean, and the city from which these people came owns all of the resevoirs - we can't stick a straw in.  So, I'll have to disagree. Lots of people escaping from taxes. School tax on a single family starter home that hasn't been improved since 1965 is $5k.  That doesn't cover ten children, and no one is funding the difference. Sewer and water tax has to be changed to a usage tax in order to not burden the neighbor who isn't profiting from the illegal rents.

Edited September 21, 2017 by Heigh Ho

[QueenCat]

They have a special box on the FAFSA for people who have aged out of the foster care system. They aren't required to have parental info. Everywhere that I've lived, there have been resources to help those wanting to go to college. And usually full scholarships, if they've met the academic requirements.

 

 

Edited September 21, 2017 by QueenCat

[QueenCat]

People on this board who are landlords have stated that they do include the cost of property taxes in rent. Most people are not continuously losing money on rentals, unless that is a tax strategy. And at least where I live, the housing market is so tight that landlords can charge way beyond their costs for rent and still have people lining up to apply.

 

They should be charging more than their costs. Both unexpected and regular costs are factored in. And since they do not have rental properties as a way to help people have a place to live but rather as a business, a way to make income, they need to charge a decent amount over those costs. And not just $50-100 over costs, or they aren't making money UNLESS they own a large number of rentals.

[Twolittleboys]

They have a special box on the FAFSA for people who have aged out of the foster care system. They aren't required to have parental info. Everywhere that I've lived, there have been resources to help those wanting to go to college. And usually full scholarships, if they've met the academic requirements.

 

I don't think the problem is really one specific form though. Lots of young (and sometimes not so young) people still need some help. Maybe they made a mistake (say they didn't budget their money good during the first semester of college and run out), maybe they tend to "forget" unpleasant stuff, maybe something else. Young adults from stable homes usually still get help with this. Parents deliver a lecture and then give some extra money to tide them over (or maybe talk to a friend to get them a part-time job that will make up for it). Parents call and nag about stuff that needs to be done etc. All this is missing if you have no family (or at least not one that cares and/or can provide that sort of help).

 

Yes, some will manage anyway because they have the smarts, drive etc. and that is absolutely great. But many more could succeed if they had been lucky enough to have a family that provides support but without it they are going to fall through the cracks. 

 

It takes quite a bit of drive/self-confidence etc. to even realize that you could have help and to ask for it. In my opinion that is one of the main reasons poverty is passed down through generations.

[QueenCat]

I don't think the problem is really one specific form though. Lots of young (and sometimes not so young) people still need some help. Maybe they made a mistake (say they didn't budget their money good during the first semester of college and run out), maybe they tend to "forget" unpleasant stuff, maybe something else. Young adults from stable homes usually still get help with this. Parents deliver a lecture and then give some extra money to tide them over (or maybe talk to a friend to get them a part-time job that will make up for it). Parents call and nag about stuff that needs to be done etc. All this is missing if you have no family (or at least not one that cares and/or can provide that sort of help).

 

Yes, some will manage anyway because they have the smarts, drive etc. and that is absolutely great. But many more could succeed if they had been lucky enough to have a family that provides support but without it they are going to fall through the cracks. 

 

It takes quite a bit of drive/self-confidence etc. to even realize that you could have help and to ask for it. In my opinion that is one of the main reasons poverty is passed down through generations.

 

I thought she was talking about the required part of FAFSA, where one must share parental income. I do agree with you on the other stuff.

[Bluegoat]

It isn't so much that I think inflation/higher prices WOULD happen but that I don't know what would. Giving everyone a basic income must have some effects on the economy/market and they might be significant/detrimental. 

 

As far as housing is concerned, the number of units available wouldn't change right away. You won't ever have a perfect match. Saying that landlords might keep the market short to make a profit which makes them sound kind of mean. I think it is better to look at it like this: You have a certain amount of investment capital and you can use it different ways (e.g. spend it for fun, buy shares, buy/build housing etc.). It only makes sense for people to choose to invest in housing if the rewards (rent) are better than the cost (investment/work involved). UBI could mess with any of those (or not). 

 

 

 

I think it goes with the territory that when you try something new in public policy, it may have effects you didn't expect, and sometimes it might just be a flop.  You try and avoid that, but how else can you operate?

 

Many people predicted here in Canada that universal health would be a flop, and yet it's our most cherished public institution now - it usually comes up in the top 5 things we love about Canada.  Sometimes it pays to try something new.

 

You are right that numbers of units won't change right away, which is why ideally there will be some flexibility.  And there is a need to predict what will happen, too.

 

Are developers and landlords mean?  Is controlling supply mean?  I don't know - I mean, it happens outright in other industries that they control supply to control price - oil is a good example.  I do think that in the minds of many, they just want to invest their money for the best return which means higher end property.  I wonder though what we would really say about someone who pursues personal interests without reference to the public interest, and the place where their private duty and the public interest intersect?  Is that mean, or what?

 

Anyway - low and in many places even middle income housing are problems because developers aren't getting enough return to be interested, or in low-income sometimes can't even make expenses which is a real problem.  Which is why so often low income and sometimes middle income housing are very much managed by the state.

 

A lot of the problems we have with lack of affordable housing came with the pushing of neoliberal economics and the state getting out of housing - in the UK, for example, under Thatcher, they sold off a lot of the council properties into private hands, and have never really got back to where they were before, and now they are in a really significant housing crises.

 

If you want affordable housing you have to have policies that promote it.

[Zinnia]

Sewer and water tax has to be changed to a usage tax in order to not burden the neighbor who isn't profiting from the illegal rents.

I am surprised that this is not the case in some places. We pay water and sewer separately than property taxes. They do bill trash collection along with property taxes, but it is not part of the taxes. It is a separate, mandatory fee (which some would argue is a tax, and I would not disagree), but it is considered separate.

[Twolittleboys]

I thought she was talking about the required part of FAFSA, where one must share parental income. I do agree with you on the other stuff.

 

I thought the reference to FAFSA was just an example but I may remember incorrectly and can't seem to find that post. It is good to know that there is a way around this, just wanted to point out that it probably only helps a small bit as there are so many other factors.

 

I think it goes with the territory that when you try something new in public policy, it may have effects you didn't expect, and sometimes it might just be a flop.  You try and avoid that, but how else can you operate?

 

Many people predicted here in Canada that universal health would be a flop, and yet it's our most cherished public institution now - it usually comes up in the top 5 things we love about Canada.  Sometimes it pays to try something new.

 

You are right that numbers of units won't change right away, which is why ideally there will be some flexibility.  And there is a need to predict what will happen, too.

 

Are developers and landlords mean?  Is controlling supply mean?  I don't know - I mean, it happens outright in other industries that they control supply to control price - oil is a good example.  I do think that in the minds of many, they just want to invest their money for the best return which means higher end property.  I wonder though what we would really say about someone who pursues personal interests without reference to the public interest, and the place where their private duty and the public interest intersect?  Is that mean, or what?

 

Anyway - low and in many places even middle income housing are problems because developers aren't getting enough return to be interested, or in low-income sometimes can't even make expenses which is a real problem.  Which is why so often low income and sometimes middle income housing are very much managed by the state.

 

A lot of the problems we have with lack of affordable housing came with the pushing of neoliberal economics and the state getting out of housing - in the UK, for example, under Thatcher, they sold off a lot of the council properties into private hands, and have never really got back to where they were before, and now they are in a really significant housing crises.

 

If you want affordable housing you have to have policies that promote it.

 

I do agree that you change public policy there will be all kinds of effects and I do agree that you have to take a bit of a chance. For my taste though UBI (which I really would like to see) is a very major change and quite untested so I would hesitate to implement it (or vote for it etc.) without a lot more information. To me it just seems to risky at this point. I'd feel more comfortable with a partial implementation (e.g. to replace welfare programs) and then see how it works. For me the difference to universal healthcare is that it seems a much bigger change. Also, universal health care has been around for a while (not sure if Canada has had it that long?) so at least at this point there are plenty of successful examples to build on.

 

I personally do not think there is anything wrong in investing your money to get you the best return you can get as long as you do not cheat/lie etc. It is great if people make choices specifically to benefit the public but in my mind that is what taxes are for. I mean if I earn X amount I will pay x for taxes, insurance etc. and maybe give y to church/donations etc. but the rest is mine to spend or invest. And if I invest I want to make the most I can out of it. I would stay clear of things that I find morally reprehensible but investing in rental properties isn't to my mind (unless you are a slum lord or something).

 

I do totally agree that policies need to support the housing market. But overall I think it is important to find the right balance between relying on market forces and investing in the public good. Messing too much with the market tends to have unpleasant results. I for example think communism sounds great in theory but it just doesn't seem to work (not saying that you are advocating communism just that care needs to be taken when influencing markets).

[Carol in Cal.]

It is not untruthful to say that a renter pays property taxes if you are talking about the economic burden of the tax (which is where the real impact of a tax is).  Economists make a clear distinction between the economic burden of a tax (who really pays the tax) and the legal burden of a tax (who is required to remit the payment to the government).  

 

This is not the same as the Exxon example.  The existence of the property tax does not interfere with or impact the labor market for Exxon employees.  Therefore there is no economic or legal burden on Exxon for the property tax.

This is the kind of silly distortion of language that makes people not believe 'experts'.

Similar to 'out of pocket maximum', which isn't, but is CALLED that.

 

And actually, the control of property taxes in California is an employment incentive, because people can move here and know that their property taxes cannot go up more than a certain small percentage per year.  That being so, the converse would seem to be true--that more typical property tax plans would be a disincentive in many other places, in which case the Exxon example would not hold as you say.

[Bootsie]

This is the kind of silly distortion of language that makes people not believe 'experts'.

Similar to 'out of pocket maximum', which isn't, but is CALLED that.

 

And actually, the control of property taxes in California is an employment incentive, because people can move here and know that their property taxes cannot go up more than a certain small percentage per year.  That being so, the converse would seem to be true--that more typical property tax plans would be a disincentive in many other places, in which case the Exxon example would not hold as you say.

 

What in the language is being distorted?  If you started out in a location with no property taxes and the rent was $500 a month (determined by supply and demand), then a $100 per month property tax is placed on the property, supply decreases (the supply curve shifts left) because the cost of maintaining rental property has increased.  When the supply curve shifts to the left, the rental price will rise; the amount of the increase will rise somewhere between $0 an $100 depending on the elasticities of supply and demand--for argument sake, let's say the increase is $40.  Now the renter is paying $540--so the $40 increase in price is the renter's economic burden, or the portion of the tax paid by the renter.  The property owner collects $540 but has to pay $100 in property tax, so keeps $440--$60 less than before, so that is the economic burden for the owner, or the of portion of the tax paid by the property owner.  

 

If controlled property taxes is an incentive for people to move to California, an employer in California would be able to hire workers for a lower salary, so Exxon would be benefitting from this by paying lower salaries rather than being considered as having an economic burden of the tax.  

[Frances]

They should be charging more than their costs. Both unexpected and regular costs are factored in. And since they do not have rental properties as a way to help people have a place to live but rather as a business, a way to make income, they need to charge a decent amount over those costs. And not just $50-100 over costs, or they aren't making money UNLESS they own a large number of rentals.

I never said they shouldn't be charging more than their costs. That was my point. Unless there are some tax reasons or bad economic conditions or something else, they are including the cost of property taxes in the rent, along with lots of other stuff. So the even though the landlord is directly paying the property tax, the renter is generally also indirectly paying at least a portion of it. Generally speaking, landlords are not in the business to lose money.

Edited September 21, 2017 by Frances

[Murphy101]

I am surprised that this is not the case in some places. We pay water and sewer separately than property taxes. They do bill trash collection along with property taxes, but it is not part of the taxes. It is a separate, mandatory fee (which some would argue is a tax, and I would not disagree), but it is considered separate.

Water and trash is one separate bill from property for us. If my water were to be turned off due to not being paid, trash pick up wouldn't happen either. We had a foreclosed house down the road that did that much to neighborhood ire. They just left everything a mess to pile up and it took the bank fooorrreeevveer to clean up and turn everything back on.

[Carol in Cal.]

What in the language is being distorted?  If you started out in a location with no property taxes and the rent was $500 a month (determined by supply and demand), then a $100 per month property tax is placed on the property, supply decreases (the supply curve shifts left) because the cost of maintaining rental property has increased.  When the supply curve shifts to the left, the rental price will rise; the amount of the increase will rise somewhere between $0 an $100 depending on the elasticities of supply and demand--for argument sake, let's say the increase is $40.  Now the renter is paying $540--so the $40 increase in price is the renter's economic burden, or the portion of the tax paid by the renter.  The property owner collects $540 but has to pay $100 in property tax, so keeps $440--$60 less than before, so that is the economic burden for the owner, or the of portion of the tax paid by the property owner.  

 

If controlled property taxes is an incentive for people to move to California, an employer in California would be able to hire workers for a lower salary, so Exxon would be benefitting from this by paying lower salaries rather than being considered as having an economic burden of the tax.  

What is being distorted, obviously, is who is paying.  

 

Re. the incentive, so by your argument an employer in another state would be 'bearing the economic burden' of the differential tax there.  Equally double talkish.

[Scarlett]

Water and trash is one separate bill from property for us. If my water were to be turned off due to not being paid, trash pick up wouldn't happen either. We had a foreclosed house down the road that did that much to neighborhood ire. They just left everything a mess to pile up and it took the bank fooorrreeevveer to clean up and turn everything back on.

We bought a forclosure that had been sitting empty for 2 years. Part of my closing was $1000 water meter. They wouldn't have let me close without buying it. Not that we would have wanted a house without water but it was mandatory.

[Bootsie]

What is being distorted, obviously, is who is paying.  

 

Re. the incentive, so by your argument an employer in another state would be 'bearing the economic burden' of the differential tax there.  Equally double talkish.

I would argue that saying that only the person writing the check is the person paying the property tax is distorting.  Using that language it is easy for people to be misled that a tax proposal makes someone else pay the tax that they are really feeling a burden from.  

 

If I give my son $5 for lunch and he goes to the restaurant and pays the $5 bill for lunch, yes he "paid" the bill.  But, I also "paid" for his lunch.  

 

I would not make the argument that an employer in another state is bearing the economic burden of a differential tax.  There is an economic burden (and a deadweight loss) that is created whenever a tax is placed on an activity.  A lower tax or the absence of a tax does not create an economic burden.   

[Carol in Cal.]

But the point is that the tax remains whether there are renters or not, and the rent that can be charged is what the traffic will bear whether it covers the property taxes or not.  So saying that the renters pay the property tax is false at worst, very misleading at best.  And that was where we started.

 

ETA:  In your example, if you don't have a son who needs lunch, the expense goes away.  Whereas in the case of the property taxes, they remain whether there is a renter or not.

Edited September 21, 2017 by Carol in Cal.

[Bluegoat]

I thought the reference to FAFSA was just an example but I may remember incorrectly and can't seem to find that post. It is good to know that there is a way around this, just wanted to point out that it probably only helps a small bit as there are so many other factors.

 

 

I do agree that you change public policy there will be all kinds of effects and I do agree that you have to take a bit of a chance. For my taste though UBI (which I really would like to see) is a very major change and quite untested so I would hesitate to implement it (or vote for it etc.) without a lot more information. To me it just seems to risky at this point. I'd feel more comfortable with a partial implementation (e.g. to replace welfare programs) and then see how it works. For me the difference to universal healthcare is that it seems a much bigger change. Also, universal health care has been around for a while (not sure if Canada has had it that long?) so at least at this point there are plenty of successful examples to build on.

 

I personally do not think there is anything wrong in investing your money to get you the best return you can get as long as you do not cheat/lie etc. It is great if people make choices specifically to benefit the public but in my mind that is what taxes are for. I mean if I earn X amount I will pay x for taxes, insurance etc. and maybe give y to church/donations etc. but the rest is mine to spend or invest. And if I invest I want to make the most I can out of it. I would stay clear of things that I find morally reprehensible but investing in rental properties isn't to my mind (unless you are a slum lord or something).

 

I do totally agree that policies need to support the housing market. But overall I think it is important to find the right balance between relying on market forces and investing in the public good. Messing too much with the market tends to have unpleasant results. I for example think communism sounds great in theory but it just doesn't seem to work (not saying that you are advocating communism just that care needs to be taken when influencing markets).

 

 

Well, I think that your last two paragraphs seem contradictory, the way you have said it here.

 

On the one hand, you are saying private enterprise has no obligation to consider the public good, beyond what has been made illegal.  It's oriented to the private good.  The market is amoral, in that conception.

 

So directing action to the public good is left up to the state.

 

OTOH, you don't want the state to step in too much either.  So one element is weighted wholly to the individual while the other needs to be balanced - that seems to tip to one side.

 

I think the fundamental problem with this approach is that it assumes the purpose of economic activity is really to enrich individuals, and I think that's pretty reductive.  It seems more plausible if you think of one guy buying a single rental property as an investment.  Less so when you think of the developers or large landlords building hundreds of units, and essentially driving the shape of the community based on their personal best interests.  Why should that shape the community?  And why would it be that our individual duty to consider the needs of the community is somehow not part of our actions in business?

 

It seems to me that is the kind of attitude that makes people feel cynical about morality and business both - who respects the guy who goes to church every week, or gives a bunch of money to charity, and yet pursues his own private good in business whether or not it serves the community?  If every business looked not just to the well-being of the owner, but the needs of community as a whole, how would that affect our communities?

 

I don't know that I would say communism is unsuccessful economically.  People tend to think of it as complete management of the economy like many communist states tried  in the 20th century, and that certainly was not very effective - to say the least.  Most communist states now don't use that kind of management, though, and it seems to work better and be much more flexible - the state still sees the economic activity of the nation as being about the good of the people, not just individuals, and it expects individuals to conform to those needs.  I think as westerners we tend to recoil from the authoritarianism we see in that - OTOH, they seem to recoil from the sense that we only need to serve ourselves.

Edited September 21, 2017 by Bluegoat

[Twolittleboys]

But the point is that the tax remains whether there are renters or not, and the rent that can be charged is what the traffic will bear whether it covers the property taxes or not.  So saying that the renters pay the property tax is false at worst, very misleading at best.  And that was where we started.

 

ETA:  In your example, if you don't have a son who needs lunch, the expense goes away.  Whereas in the case of the property taxes, they remain whether there is a renter or not.

 

But the taxes do go away if you get rid of the property. It's a tax on the property and not on the renter. But the purpose of a rental property is to rent it out, correct? And you wouldn't do so unless you could make a reasonable profit which is determined by rental income - cost (which includes taxes). So you'd only be willing to be a landlord if you expect that the rental income is high enough to cover your cost (including taxes) and give you the same or more profit you could make some other way (for example by buying shares). Of course there can be miscalculations (e.g. renters don't pay or you can't find renters) and it is harder to get rid of a house than of shares.