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TOWNIE: CORPORATE TAX FABLES AND COMMUNITARIAN KIDDIE TABLES

CORPORATE TAX FABLES AND COMMUNITARIAN KIDDIE TABLES

 

December 12, 2017

BY JASON PRAMAS @JASONPRAMAS

 

Big local corps quiet about huge profits to come from Repub tax scheme… except GE

An interesting WBUR article, “Largest Mass. Companies Are Mostly Silent On GOP Tax Plans,” asked the top 12 corporations in the Commonwealth to comment on the recently passed Republican scheme to transfer vast amounts of money from the working and middle classes to the rich and the corporations they control—euphemistically called “tax reform” in most of the major news media. Unsurprisingly, Bay State business leaders didn’t want to take time away from rubbing their hands together and cackling with glee about all the free money they’re going to get—choosing instead to remain mum for the moment.

 

But WBUR did get a statement out of General Electric after the Senate vote on the tax plan:

 

GE commends Congress and the White House for their commitment to comprehensive tax reform. GE supports the Senate tax reform plan because it would upgrade the U.S. to a territorial tax system, bring rates in line with other countries, and allow U.S. businesses and workers to compete fairly around the world, so it’s the quality of our products that determine whether we win global deals, and not tax differences.

 

No surprise GE would say that, since it will benefit tremendously from the drop in federal corporate tax from 35 percent to only 20 percent. But it will also get to repatriate as much of the lucre it’s been offshoring as it would like at a one-time tax rate of merely 12 percent. And now that the feds are “upgrading” to a “territorial tax system,” the company will make even more money. Why? Because a territorial tax system means that all the profits multinationals sock away in offshore tax havens will be taxed at a rate of zero percent. You read that correctly. Nada. No taxes at all on foreign profits.

 

Currently, companies like GE stash profits in other countries because, although they have been technically taxed on all profits—foreign and domestic—at the base 35 percent rate (basically a total joke since there are so many corporate tax loopholes that big companies like GE actually end up with a negative tax rate some years, but let’s play along for the purpose of this explanation), they are only required to pay those taxes when they “repatriate” the money back to the US. Which has often been never thanks to a complicated system called “transfer pricing” where corporations book profits in low tax countries, and take deductions in the US and other higher tax countries. And then borrow cheap money on the strength of their foreign bank accounts to make more profits.

 

The result will be even more offshoring of both money and jobs by megacorps. Because why would a company like GE not move more of both away from the US if foreign profits are  tax free—without nearly as much of the tricky accounting that’s currently needed to play the transfer pricing game? Just really bad news for Mass workers. And for boosters of the GE Boston deal. And anyone who thinks big companies like Amazon are going to have much incentive to add lots of jobs anywhere in the US going forward.

 

BPDA “PLAN: Glover’s Corner” protested in Dorchester

As the neoliberal capture of the government and the public sector continues apace, earnest technocrats at the Boston Planning and Development Agency (BPDA, formerly known as the BRA) still find it necessary to play the communitarian “public meeting” game when trying to sell bad deals that advance corporate interests to the working families who are all too often the targets of such deals.

 

Communitarianism being the decades-old fad where institutions representing the rich and powerful work hard to make sure that “every constituency has a seat at the table” when they want to do something that will harm those constituencies. But, of course, the power relations remain unchanged. The rich and powerful remain rich and powerful. Everyone else does not. And “the table” isn’t the real table—where bankers, CEOs, and top government leaders meet to make policy decisions happen. Usually behind closed doors. It’s basically a kiddie table where regular people can pretend they have some impact on a process that’s over before it begins.

 

Which is why it’s nice to see that housing activists with the Dorchester Not For Sale coalition decided to crash a recent BPDA transit-oriented public meeting on its “PLAN: Glover’s Corner”—which is slated, among other things, to add hundreds of units of housing that will be mostly unaffordable to current Dot residents.

 

According to the Bay State Banner and the Dorchester Reporter, the Dorchester activists are taking a page from JP and Roxbury housing activists with the Keep It 100% for Egleston coalition who protested the larger BPDA PLAN: JP/Rox—which might ultimately involve thousands of units of new housing—until the city relented and mandated that 36 percent of the new units (and 40 percent overall, including units currently permitted for construction) must be affordable.

 

The definition of “affordable” for the JP/Rox plan area is pegged to percentages of the average median income of the Boston region set by the US Department of Housing and Urban Development (HUD). So, for example, according to an August Spare Change News article, some “affordable” units being rented and sold as part of the 3200 Washington complex are being offered to households making 70 percent of the region’s average median income, and some to households making 100 percent.

 

But JP and Roxbury advocates have continued to protest PLAN: JP/Rox even after it was made official because its definition of “affordable” remains too high.

 

Spare Change continues, “For the Boston metropolitan region, the average median income is just over $100,000, and according to the U.S. Census Bureau, the average household income for all of Jamaica Plain is $76,968. However, households within the plan’s range have an average income of just over $50,000.”

 

According to a March Bay State Banner article, activists three goals for the plan are “to deepen the affordability level on designated affordable housing units so that they are attainable by households making less than $35,000 per year; increase goals for the portion of new housing that’s designated as affordable from 36 percent to 55 percent; and require the conversion of 250 market-rate units into affordable units..”

 

So while their activism raised the amount of “affordable” housing the BPDA planned to offer in the deal from 30 percent to 36 percent, it’s not going to help many people currently living in or near the affected neighborhoods to stay in the area unless the definition of affordable is changed to reflect economic reality. Given that fact, Mayor Marty Walsh’s much-vaunted progress on getting more affordable housing built on his watch is based largely on smoke and mirrors because much of it remains unaffordable to the people who need it most.

 

The Dorchester activists, meanwhile, are demanding that the BPDA accept a six-month moratorium on PLAN: Glover’s Corner, use the extra time to provide more data to the community on the plan, and do things like provide childcare at public meetings to allow more locals to attend.

 

Thus far, the BPDA is blowing off such demands and trying to plow forward without significant changes to its plan. Boston City Councilor Frank Baker, who attended the Glover’s Corner meeting, agreed with the BPDA in a recent Spare Change article, saying “As far as I’m concerned, it’s not a valid request.”

 

Seems the fight for housing justice is far from over in Dorchester.

 

Townie (a worm’s eye view of the Mass power structure) is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

HOMELESS FOR THE HOLIDAYS: SAVAGE CUTS AND CRAPPY JOBS ARE WHAT GOT US HERE

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December 6, 2016

BY JASON PRAMAS @JASONPRAMAS

For many people, the period between Thanksgiving and Christmas is the only time of year that their thoughts turn to the plight of the homeless. Money, food, and presents are donated. And time is volunteered at shelters. All to make sure that people without a home of their own have a nice holiday—at least for a few hours. Worthy efforts to be sure.

However, despite this periodic outpouring of compassion, there’s still an unfortunate tendency to individualize homelessness in our society. As with poverty in general, casual observers assume that it’s personal failings that cause people to end up without housing.

And while it’s a truism that every person bears some responsibility for the straits they find themselves in, there are three major structural problems out of the control of impoverished individuals that best explain the rise of homelessness in Massachusetts: savage cuts to our state mental health system, an economy that creates large numbers of bad low-wage jobs, and the destruction of affordable housing.

Taking these issues in turn, the Commonwealth started shutting down most of its oft-criticized inpatient mental hospitals on budget and civil liberties grounds in the 1970s—leading to the first wave of homeless people with few places to turn for help and little ability to escape their fate. Things have only gotten worse since then. According to Mass Live, over the last 20 years the legislature has cut spending on inpatient mental health services by half and outpatient spending has remained stagnant.

Next, National Public Radio recently reported that wages and benefits “essentially flatlined or declined for four of five Americans between 2007 and 2014.” As big business racked up super profits, and crushed labor unions. Continuing a trend that also started in the 1970s where wage growth has slowed dramatically for most working people even as their productivity has increased. People at the bottom of the economic pyramid have been hardest hit, and ever more working people are finding themselves unable to pay mortgages or rent with the money they make working two or even three bad low-wage jobs with no benefits and little opportunity for advancement.

Then there’s the acute problem of skyrocketing housing costs in the Bay State. Especially in the hot Metro Boston real estate market where either buying or renting has become terribly difficult for poor folks.

This situation began when rent control—which limited the ability of landlords to raise rents in a number of cities in Mass—was torpedoed in 1994 with a state referendum backed by the real estate industry. When rent control ended in 1995, landlords immediately started jacking rents far beyond many tenants’ ability to pay, and housing developers started building luxury apartments and condos at a far higher rate than desperately needed affordable housing. Building new public housing, once a saving grace to poor families, has been taken pretty much off the table on ideological grounds since the Reagan era.

Making matters worse, the devastating subprime mortgage scandal that started in 2007 and caused the Great Recession of 2008 led to nearly 22,000 foreclosure filings in one nine-month period in Mass in 2009, according to the Boston Globe. And there have been thousands more in the years since. A trend which is now accelerating again.

The result? As a 2016 report by the National Low Income Housing Coalition points out, the Commonwealth is short 166,960 affordable housing units for extremely low income households making 30 percent or less of their area’s median income. And the Mass Coalition for the Homeless states that the approximately 3,000 night shelter beds for individuals statewide are usually full or beyond capacity—and that there were 21,135 people in Massachusetts counted as experiencing homelessness during the January/February 2015 headcount conducted by the US Department of Housing and Urban Development. Numbers which barely begin to describe the magnitude of the crisis when hundreds of thousands of hard-working Bay State residents are just a couple of paychecks away from penury.

So if you really want to help homeless people—during the holidays and every day—you should consider joining advocates working to end homelessness. It’s not rocket science. Increasing our state mental health budget, passing living wage laws to make more jobs into decent ones, restoring rent control, devoting public funds to build lots of decent affordable housing, and properly taxing the rich and corporations to pay for such needed reforms will go a long way toward stopping the structural poverty forcing people out of their homes. Making us a better and more compassionate society in the bargain.

This column was originally written for the Beyond Boston regional news digest show – co-produced by the Boston Institute for Nonprofit Journalism and several area public access television stations.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

Copyright 2016 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalismand media outlets in its network.

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