Homelessness Is Not An Issue We Can Tax Away

 

February 2018 – I recently read an article published mid-last-year, proposing that higher taxes, specifically higher taxes on the technology industry should be applied to the California’s homeless problem.  Members of the San Francisco board of supervisors wanted to tax the tech industry last year. In Los Angeles, the city council wanted to raise property taxes on all property owners. On the state level, legislative leaders had planned to shift income taxes from those in the highest tax bracket in the country (those who provide the jobs we do have) to a fund to help those with mental illness to finance housing bonds for the homeless.

California’s technology industry has had its minuses – a contributor to accelerated housing costs, the acceleration of a throw-away workforce, and more disposable consumer goods.  However, it is also one of the states’ more recent pluses. Creating new technologies, giving us a growth industry when the end of the Cold War reduced the country’s need for our airplane industry. It has also led to creative innovations through the internet and the micronization of all things electronic.

We all recognize that the homeless, are unacceptable in our modern society. I would postulate that the reasons many of these individuals are on the street are as varied as the individuals themselves. Whether they simply lack job skills and require a hand up, they may have fallen with no support network, some are dealing with mental illness, others have addiction issues, what ever their issues no single fix will resolve the problem. It will take a long concentrated effort to make these people feel like they belong.

However, increasing taxes is likely to increase the number of those on the street – not reduce them.  Lets take a look at the facts.

Homelessness is a huge problem in the population centers which have the highest costs of living. San Jose, San Francisco, Los Angeles, San Diego, and even Sacramento have seen huge increases to home prices and apartment rents with little to no real increase in long-term wages.

These urban areas also have some of the highest tax rates – San Francisco’s sales tax rate is 10%. The high housing prices lead to high property taxes. California has the highest income tax bracket among all other states at 13%.

Gas prices are over a dollar per gallon higher in California than in other states, due to our specially formulated fuel. On top of that we have added a 47.3-cent combined excise tax that will take effect July 1, 2019.  Plus on January 1st, vehicle registration fees increased by $50 for cars valued under $25,000, or $175 for the highest-end luxury vehicles.

Yes, homelessness is a real-problem and one that need to be addressed.  But if we were to tax ourselves to make us feel better, as though we were helping, its possible more people would fall out of the economy and on to our streets. There are better ways.