If San Jose can’t afford its basic public services, what city can?
One would think that the richest city in America would have better roads. And more police officers. And more adequate housing for the poor.
.. Prop. 13 has meant that as real-estate values in California have skyrocketed, longtime homeowners have continued to pay extremely low property taxes.
.. San Jose is battling a number of social problems as it deals with those fiscal challenges. Its poverty rate is 12.9 percent, and there are still hundreds of homeless people, even though the city shut down the homeless people’s encampment known as “The Jungle” in late 2014. As more people are unable to keep up with rising costs in the region, many end up on the city’s streets.
.. It can be disconcerting to see the poverty amid so much prosperity, especially because poverty in San Jose looks different than it might elsewhere. There are no hulking public apartment complexes here, nor are there homeless people begging for money on the subway, because there isn’t a subway (though there is a downtown light-rail system). Instead, people here stay in their cars and drive from work to home, making it possible to completely avoid seeing poverty at all.
Livin’ Bernie Sanders’s Danish Dream
It would create, as in Germany, a legion of eternal students who have little incentive to leave school because the costs are so low. It would give Washington officials greater control over state universities, determining what sort of faculty they could hire and what sort of programs they could run. It would threaten hundreds of private colleges, which could no longer compete against the completely subsidized state system. It would reduce the pressures universities now feel to reform themselves because it would cushion them with federal largess. Slowly, American universities would look more like their European counterparts. They’d be less good.
.. According to The Wall Street Journal, Sanders would add $18 trillion to the federal budget over the next 10 years. Currently, total government spending is about 36 percent of G.D.P. Under Sanders it would rise to about 47.5 percent of G.D.P., putting us comfortably in the European range.
.. Third, Sanders would change the incentive structure for the country’s most successful people. He proposes raising the top tax rate to 52 percent. As Josh Barro noted in The Times, when you add in state, local and other taxes, top earners would be paying a combined tax rate over 73 percent. In high-tax locales like New York City and California, it would be even more.
Rubio’s Call for No Capital Gains Tax Is a Break With the G.O.P.
When Steve Forbes ran for president in 1996 on a plan that called for no taxes on dividends and capital gains, Mitt Romney, then a private citizen, took out a full-page ad in The Boston Globe attacking his proposal as plutocratic.
.. Mr. Rubio seeks a lower top rate than is imposed today, but one higher than any other current Republican presidential candidate has proposed. Mr. Cruz’s plan, which combines a flat income tax with a value-added tax, would impose an effective combined tax rate of 24.4 percent on wages.
.. First, a large fraction of capital income is taxed twice, at the corporate and individual levels. Dividends are distributions of already-taxed corporate profits, while a rise in a stock price represents a rise in expected future taxable corporate profits. Second, economists generally believe the revenue-maximizing tax rate on capital gains is much lower than the revenue-maximizing tax rate on salaries. This is in large part because capital gains are voluntary; you pay only if you sell an appreciated asset, so investors are likely to respond to higher tax rates by not selling.
Third, and more controversially, some economists say capital is significantly more sensitive to tax policy than labor. That is, high taxes on capital income will do more to discourage investment than high taxes on wages do to discourage work. Capital taxes are therefore more damaging to the economy than wage taxes.
.. When you start to see Republican economic advisers admitting that tax cuts on dividends and capital gains aren’t working, you know the game is up.
The Intractable Problem of Tax Havens
His proposed solution involves three elements. One is the creation of a global financial register, modeled on existing information depositories such as Clearstream, to keep track of who owns all the financial securities in circulation throughout the world. This would include data on the ownership of mutual fund shares, as well as stocks and bonds.
.. Wall Street and the City of London are major players in an industry that the American and British governments publicly condemn. While their elected officials may bemoan revenue losses from tax evasion, these countries are playing a double game, facilitating that evasion through their own financial-services industries.
.. For those two nations in particular, cracking down on international tax evasion would deal a serious blow to their economies. The interest groups representing finance wield a great deal of political power
.. Considering the political influence of the firms and professional groups who orchestrate tax evasion on a global scale, it seems very unlikely that an effective strategy could be developed through democratic means.