Archive for January, 2007

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A little good news from New Orleans

January 30, 2007

Never know what you’ll find searching for news about “single tax.”  USA Today tells us that last November the voters of New Orleans approved consolidation of their seven(!) assessors into a single office.   Prior to the election, locals seemed to think it a good move for higher assessment quality and less corruption, though I can’t find any local post-election comment.  In fact, USA Today seems to have been the only source to cover this.

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If you can’t afford to waste transit funds

January 26, 2007

then you don’t. This was brought to mind back in June, when a speaker at the Metropolitan Conference on Public Transportation Research reported a conversation with the former Mayor of Curitiba, Brazil. The Mayor said something to the effect of “It is fortunate that we in Curitiba don’t have as much money as you have in Chicago, because if we did we would waste it.”

Maybe the same thing is happening in North Carolina, where the [Research] Triangle Transit Authority was unable to secure Federal aid for their proposed rail line, so apparently they’re working with a developer to get some of the land value increase. I say apparently, because the article in Metro Magazine isn’t very clear and I’ve been unable to find anything else.

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Might poverty be bad for society?

January 24, 2007

Well, uh, yeah, it is possible.

Economic theory suggests that when poverty affects a significant portion of the population, these effects can extend to the society at large and produce slower rates of growth

So says the GAO. The study, entitled POVERTY IN AMERICA: Consequences for Individuals and the Economy, seems to mainly focus on health issues, noting that of the “over $400 billion” spent on federal programs that “provided cash and noncash benefits to individuals and families with limited income,” $176 billion went to medical providers under medicaid, and lists several other programs which are essentially payments to non-poor people who are directed to provide services to the poor.

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Misdirection of Development Incentives

January 18, 2007

This is not really news, but it does seem to be an additional example. Washington-based “Good Jobs First” has released a Ford-funded study showing that subsidies for “job creation” tend to go to communities that have low unemployment. Of course, dummy! It’s easier to create jobs there.

Now the only reason I found this was that I was looking for the study released yesterday by “Broadway in Chicago,” asserting that their operations have an “annual economic impact” of $635 million in Illinois. I haven’t seen the details of how this is measured, but most likely it assumes that, if there were no BIC operation, then the theatres would remain dark, nothing else would be built in their place, and nobody who came to Chicago and saw one of their productions would have found any other reason to come. Furthermore, none of the people who serve these visitors, or the theaters, would have found any other work. Crains says that “Mayor Daley’s administration has invested about $60 million into the downtown theater district,” but doesn’t indicate how much went to BIC and what other subsidies they may have received. The Tribune assigned a theater critic, not a business or economic reporter, to the story.

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Even Off the Books, you still need a space

January 14, 2007

Finally got a copy of Sudhir Venkatesh’s Off the Books, courtesy of a suburban library. It’s a study of a poor ghetto area within Chicago. Few are “employed,” but many are working, hustling to make a living.

“I soon discovered that the seemingly random collection of men and women in the community…were nearly all linked together in a vast, often invisible web that girded their neighborhood. This web was the underground economy.”

So how are these folks making a living? Pretty much any way you could imagine. Of course some of the work is illegal– prostitution, drugs– but much would be legal if it was performed in accordance with applicable laws and ordinances. People are selling clothing, food (some of it home made), used equipment (some of which may have been stolen), maybe providing security services for local stores and even apartment building owners. Sure, off-the-books activity can avoid some taxes, but among the underground services is the preparation of income tax returns. (Thus the preparation of the books is off the books). Life is difficult, because almost everyone’s poor and public services are, well, not uniformly superb.

There are several reasons why it’s difficult to escape to a better life, one of which is that underground work doesn’t produce a credit rating nor, really, a resume. And many people are simply afraid to leave their familiar community.

A few community leaders help keep things functioning, but receive little benefit.

“It is by working off the books, in back rooms and behind the scenes, that local residents come up against the limits of their [work]…Because they have done this surreptitiously…they are implicated in the very dangerous and destablilizing activities they are trying to address…[and] they can never really show themselves to those in the social mainstream– phiilanthropists, advocates, employers, and so on– who would otherwise find their work courageous and worthy of acknowledgement and reward. It is nearly impossible for the press and political leaders to recognize their work…Thus, in the long run their success as mediators does little to help them advance personally.”

And

“Even in a depleted ghetto, there will be collective actors in place who attend to neighborhood affairs, and it is important to … note that their time and energy are taken up by matters that do not always make it onto the radar of the wider world. They may be working in the immediate present to make sure that children can walk safely on the widewalk or through the park…To do so, they may have to find the pimp, car mechanic, or other hustler and iron out the problem themselves. Doing this repeatedly can mean reduced time to prepare funding proposals… Unlike their suburban counterparts who are more likely to have decent city services and far fewer shady types roaming about, they do not have the time to luxuriate and plan for the future.”

What does a Georgist see in this book? Of course it is that land is key; one needs a place to produce, and even just to live.

Underground entrepreneurs possess skill, business acumen, and tremendous potential for innovative skills and strategies. What most lack is a physical space to ply their trade….Some have equipment that must be housed, others need a place to sell…others need sites to advertise…Private, sheltered, decent space is at a premium.”

“To hustle, one does not simply set up shop in an alleyway or on a street corner. Chances are that others have already claimed that spot. Moreover, it is likely that any claim to use turn and earn revenue will be contested by other entrepreneurs” such as block club presidents or precinct captains. “In the ghetto, one must negotiate public space before one can hustle.”

“Very few middle-class Americans see an alley as a venue for monetary gain; but in the ghetto these spaces are full of possibility. “

“Street hustlers can offer various services to merchants including security, cleaning up, advertising. “[H]ustlers who offer merchants these services are not necessarily looking for additional income…Many have other entrepreneurial schemes…and so need a private sheltered space. James Arleander[a pseudonym] articulates a typical hustler viewpoint:

“You can always make money…But getting a place is priceless. That’s the hardest thing, to just have some place to keep your [tools and belongings] and … hide from…people who may be upset at you.”

 

It’s a book worth reading if you’re interested in how some poor people manage to survive, or even just another perspective on how the city works. Unfortunately, Harvard University Press has done a terrible job of copyediting, from page 1 (where a woman is introduced as a “widower,” or is this a new kind of political correctness?) , though the discussion of “subway” stations on Chicago’s south side (there actually are none south of Roosevelt Rd), and the “Department of Parks and Recreation” (no such agency in Chicago, folks, you mean the Chicago Park District), to the hustle that pays $50/night, or is it $50/week, depending on which part of page 312 you believe. Maybe that can be fixed in the next edition.

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Real estate tax worse than any except the others

January 14, 2007

is the way the Manchester Union Leader puts it.

[P]roperty taxes.. are for the most part locally raised and locally spent. They are painful to raise, which is why politicians loathe them. They cannot raise them easily, because they are raising them from their neighbors. And those neighbors also see what is being doing with the money.

How much easier it would be for the politicians to have a broadbased sales or income tax! The tax would be raised from afar (Concord) and the monies it would bring in would be stupendously large. Think of what a savvy politician could do with such a huge new income source.

Remember, too, that the property tax, that “worst funding mechanism,” wouldn’t go away. As has happened in every state where income and/or sales taxes have been enacted, the property taxes continue to increase.

Of course, New Hampshire doesn’t tax retail sales or income,yet.  But the warning applies to us also.

Thanks to Mark Monson for the link.

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More proof of the benefits of taxing land

January 9, 2007

Why do Danes report “unrivalled satisfaction with life?”  Well, of course there was a research project to find out.  But it seems the scientists didn’t examine the tax system, so of course they didn’t realize that Denmark has something of a land tax (though not nearly so much as formerly), which most other countries lack.  Too bad, since it is so obvious. (Thanks to boingboing, who got it from the NY Times.)