California operates the largest, most efficient welfare program in the US
philo.substack.com
philo.substack.com
If you want to say what you think is important about an article, that's fine, but do it by adding a comment to the thread. Then your view will be on a level playing field with everyone else's: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
https://thepostmillennial.com/peter-thiel-on-the-tech-curse-...
Besides, more tax revenue would make California worse. San Francisco used its huge tech windfall to spend $300 million a year on not that many homeless people. It did create a lot of those sweet government jobs and cost plus contracts though. All these government workers are now reliant on homelessness continuing to be a problem.
First: a bigger interest in intervention and keeping the system to keep votes.
I know California has had a super strong economy but... if you go down this road it will be a matter of time. Even if it is decades.
The problem with this is that once it starts it makes for a vicious circle that gets bigger and bigger and the ones who pay the increasing bills (private economy) get eventually pissed and leave.
I heard many companies moving to Texas/Florida for having an increase in the tax that corporations pay.
I.e. get rid of the property tax exemptions but lower the income tax (or the sales tax).
The argument here is not that taxes are too low or too high, it's that they are inefficient (they subsidize the wrong thing).
Yes: if you invest in something the value can go down, but I don't think the government should compensate you for that. You should just be careful where you invest your money.
This isn't always true. It doesn't happen very often, but if you are not underwater after a foreclosure, the bank owes the owner the difference.
In my area, rents have gone up concurrent with house prices - but aren't falling now that sales inventory is falling, because those owners still want to cover the mortgage.
> property taxes should not be based on the "full cash value" of a property
That's not quite how property taxes are calculated, at least not in the two states where I sell real estate. In fact, even after a house has recently sold and there is a new market value established, the property tax basis doesn't increase up to that new market price. I just went through this with an out-of-area buyer, where I took the houses I sold last year that were comps to the one they wanted to buy and showed them the new tax assessment for this year. Yes each had increased, but nowhere near the market value (in fact, the tax assessed value was between 50-60% of the market prices).
To make it less volatile they might as well just pick a number every year, the annual tax for a median house, then scale it in a relative sense based on relative house prices between taxpayers. They would more or less do that in a roundabout way anyway by tweaking the percentages every year.
Look at how rents are calculated - over a long period they usually are somewhere near costs, of which the largest costs by far is the mortgage, which depends on the mortgage rate. Property owners are often speculating on the capital gain. Commercial property is different again.
You also need to consider what behaviour that would incentivise.
Finally, the property value in some markets is entirely dependent on rents (especially commercial) so you are not necessarily gaining anything.
The article is intentionally being arch by using "welfare", a word that's usually used to refer to programs that give to the poor to refer to one giving money to the rich. It's making the point that "government handouts" are reviled when they go the poor, and accepted relatively uncritically when they go to the rich
The logic likely used by many in the group doing the accepting or reviling is whether the end result is a net contribution or not.
The above list will vary depending on your location.
The analogy is pointless. Discussing the actual situation is more productive.
> When the mugger paid for your healthcare, education, roads, services, safety and security, the equation is a little different.
Why did you leave out corruption?
Are you implying none of our tax dollars go to waste and corruption?
https://calmatters.org/commentary/2021/10/california-sees-wa...
https://missionlocal.org/2021/03/san-francisco-corruption/
I am okay not having million dollar toilets
https://www.sfchronicle.com/sf/bayarea/heatherknight/article...
Interestingly, the article does not classify money lost to corrupt state officials as welfare. Why?
A slightly intelligent satire piece would have used corruption as welfare :)
In New Zealand this is a very small problem and we are arguably the least corrupt place on earth. I forgot it exists.
https://www.transparency.org.nz/corruption-perceptions-index
I am not sure how that is relevant.
Also, New Zealand's population is less than that of SF Bay Area and one of the lowest density states in the world (hence more per capita access to resources).
There will be similar sized patches in the US with similar levels of low corruption.
This always ends up being a metaphysical debate. It’s all relative.
Suppose I make $100,000 and after taxes $80,000 is left. After a new law is passed, I now take home $81,000 after taxes on the same income.
Does it really matter if the government gave me an untaxed $1,000 “handout” check or if they “reduced the money they take from me” by cutting my taxes by $1,000?
Politicians play this game all the time, implementing social spending as tax credits and rewarding the wealthy with tax breaks.
Yes, it matters.
First, reducing what they take is more efficient than inventing new bureaucracy to send out checks.
Second, I cannot rely on a random bonus but I can rely on the taxation tables therefore I am more likely to plan on doing something useful with reduction.
It's the exact contrary of bureaucracy. Bureaucracy is deciding for the poor what they are allowed to do with the money on the wrong assumption that they wouldn't know better than you what to do with it. In fact the less money you have, the more careful you are with it. Obviously. And at the extreme end of the spectrum, if you are rich like Elon Musk, you spend 44 billions on something dumb.
No, this depends on the specifics. If they are sending every tax filer an extra 1000 then that would be very efficient (setting aside those people who do not file federal taxes). If the tax reduction is complex, requires knowledge of complicated eligibility criteria, going in person to a local SS office or for a notary public, it's very inefficient.
As a general rule, then, this claim is bogus.
If we send every person a check it requires, at the very least, envelopes and postage.
My first claim is not about the efficiency of how the money is used by the beneficiaries. My claim is about the efficiency of getting the money gets into people's hands in the first place.
We already have an efficient system for sending out checks—the Social Security Administration
California also probably runs one of the largest most efficient welfare programs in a literal sense, and if I hadn't seen these comments that's what I would have assumed this article was about.
In general, home values have consistently increased, year-over-year, in California. This means that many people pay less property taxes than they would if California didn't have its unique Prop 13.
Many people feel that this is an unfair law, as it largely benefits people who are _already_ financially established.
This article satirizes the situation, by framing the law as an intentional 'welfare program', rather than a tax break with unintended consequences. Part of the humor is that this 'welfare program' benefits the wealthy at the expense of the poor, contrary to how we typically think of philanthropy.
In fact, we had a reappraisal recently and my value went up and total tax went down.
I was not impressed with much that I saw in Cali other than the natural beauty.
Even the education system established in the 20th century no longer exists.
It looks like California is running on fumes, not anything they made this century (IMO).
It's a move where the end-game is feudalism.
All real estate whether a 1200 sqft house owned by a 90 year old widow, a foreign owned apartment building, or an oil refinery owned by a multinational.
https://www.cato.org/blog/proposition-187-turned-california-...
And more pragmatically, like many states, a single party has dominated the legislature for many decades, and we can see what ensues from that.
wiki: 71% of Republicans, 55% of Democrats, and 61% of independents; 54% of people age 18 to 34, 52% of people age 35 to 54, and 66% of people 55 and older; 65% of homeowners and 50% of renters.
Everyone in utopia TX would vote for this prop today.
This kind of logic results in net loss to citizens:
https://time.com/5530386/aoc-amazon-new-york-hq2/
Also, why are those against Prop 13 the most silent (usually) on corruption in the state?
When I talk to my dad about Proposition 13, the one thing he remembers about the ads is that it was supposed to keep widows and single moms from losing their house. In other words, he thinks of it as an entitlement program to help poor residents. But as the article points out, it is a subsidy not for the poor; it is instead a subsidy that regressively targets property owners (including landlords and commercial properties) at the expense of recent buyers and non-property owners (including widows and single moms who do not own an appreciating property).
> This kind of logic results in net loss to citizens: > https://time.com/5530386/aoc-amazon-new-york-hq2/
I agree with you that it is unfortunate that politicians such as AOC conflate economic development incentives with welfare. That has nothing to do with Proposition 13, which is not an incentive program. In fact, the incentives that Proposition 13 does contain (to avoid developing or selling which trigger reassessment) perversely exacerbate the housing scarcity that it was supposed to alleviate.
> Also, why are those against Prop 13 the most silent (usually) on corruption in the state?
Your final question seems to imply that opponents of Proposition 13 are a special interest who are ok with corruption. I disagree. I think an impartial observer can analyze the state’s largest entitlement program and complain about the obvious regressive aspects of it.
Just because the rich also benefit from X doesn't make X bad. The rich are not automatically evil.
The loss in tax revenue due to prop 13 is roughly $17bn per year. (https://web.archive.org/web/20120920093924/http://hjta.org/a...)
California lost a similar amount just to EDD fraud $31bn (probably every year).
https://abc7news.com/california-edd-unemployment-fraud-ca-sc...
Worker's comp fraud comes out to a few billions
http://www.insurance.ca.gov/0300-fraud/0100-fraud-division-o...
Why did the writer ignore that?
Let us fix fraud and corruption before raising taxes.
Would you pour water into a leaky bucket before fixing it when there is a water crisis?
> the state’s largest entitlement program
The state's largest entitlement program is fraud and corruption by public officials.
I will happily pay more taxes if there is 100% visibility and near zero waste (or at least honest attempts towards zero waste).
I’m not sure where you got your number. I presume that you took the HJTA cumulative tax break from that link ($528 billion) and divided it by 31 years (1978 to 2009)? If so, this is most likely an underestimate because the tax break increases over time for properties that do not change hands. Moreover, HJTA does not explain how they calculated their cumulative tax break number, and it is an old article from 13 years ago.
Your estimate is far lower than the original article’s estimate based on the Census ACS, which is “$68 billion per year, or $5,200 per household”.
> California lost a similar amount just to EDD fraud $31bn (probably every year).
I agree that this was terrible, though I think that was a one-time event due to the relaxed unemployment application process due to COVID-19.
> Let us fix fraud and corruption before raising taxes.
Let’s do both.
Property taxes (particularly the land portion) are not only for raising money. They also reduce inequality, reduce the incentive to speculate on underused land, make it easier for new generations to enter the market, and reduce cyclical price swings (see Henry George, Progress and Poverty).
Reframing, satire, and turning the opponent’s talking points around on them are common rhetorical and polemical tools. Does someone who is in favor of welfare for the poor have to be obligated to blindly accept the Reaganite “welfare Queen” angle? Of course not. In fact, why not turn it back on the middle/upper middle class?
I suspect that either you didn't read down far enough, or you uncritically accepted the writer's "benefits program" language without thinking about what they're actually referring to.
If you feel that your amygdala has become inflamed, then don’t worry! This is a common response to reading polemics from people that you don’t agree with, since they unabashadly argue for things that you don’t like.
Sister wanted off welfare, but if she got a job she lost much more from welfare. So no reason to work. Then welfare got limited to 5 years or something. So she got a job as a bus driver. Been doing that for 20 years now. My dad got my mom off welfare and working.
Welfare definitely was just keeping people in poverty and dependent on the government, and not being productive.
Eg. If you need a wheelchair, that's another set of maintenance, with needed changes to all kinds of your living infrastructure, custom vs what somebody without a wheelchair needs.
If only other states were richer and offered more support for their citizens. California is a magnet for benefits and mild weather seekers, and sadly those suffering from substance abuse dependencies. Equity should define this as a federal nationwide problem IMO but instead the word is out all over the world - if you sit down on the pavement in California and say you are 'homeless' the money starts flowing.
https://www.news.com.au/travel/travel-updates/travel-stories...
The great thing about this article is that you can tell who didn't bother to read it.
In the prooposals at the end: 'Write a software application that matches program beneficiaries with a household (or more likely, a combination of households) that paid an equivalent amount in the same year. For example, our San Francisco homeowner from earlier that received $16,500 might get matched with five middle class families that rent in Fresno who pay $3,300 each in sales taxes each.7 Now we have made it into an “adopt-a-property owner” program. This makes the benefit much more tangible for taxpayers'.
This attempt at equity in a blisteringly expensive state makes more sense when viewed through the prism of the federal HUD 'housing first' laws around where money can be spent. Again it would be far better to have a nationwide match of properties to owners. A friend has calculated the billion+ spent by Cal on the unhoused could buy housing and wrap around services in other parts of the USA for virtually all the people asking for this.