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Poverty and Policy Matters

We use tools to fix things. Just like you’d use literal tools to improve your house, we all use metaphorical tools to improve our lives.

Money is a tool. You would expect a fabulously wealthy technology executive turned venture capitalist to understand this. You might not expect said one-percenter to shout it from a media platform. That’s just what Chamath Palihapitiya has done, though, in this fascinating story about his journey from welfare to wealth.

Two pieces of this story fascinate me. First, Palihapitiya is explicit about the role that affordable health care and subsidized university tuition played in his ability to succeed. Without these tools, his family would have been worried about basic survival, not figuring out how to contribute to the technologies of the future.

The second piece is related: without these vital public investments, how would brilliant but disadvantaged individuals like Palihapitiya find their way to success? With the odds already stacked against them, how would today’s poor but bright future entrepreneurs make it happen?

“I’m acutely aware that there are many other people who grew up like me who are frankly, 1,000 times more talented then I am,” he said. “We should ask ourselves, ‘Can somebody like me grow up with the exact same problems and disadvantages and yet get to the equivalent place as me 20 years from now?'”

It’s in everyone’s best interests to get kids growing up today — many of whom with the same potential — access to economic security and a high quality education. Personally, I think that’s a human rights issue.

If you don’t, perhaps you will consider the issue of human capital: to have brilliant children with unlimited potential struggling even to survive, with limited access to any upward mobility, is a tragic waste of human capital.

As Steven Jay Gould once put it: “I am, somehow, less interested in the weight and convolutions of Einstein’s brain than in the near certainty that people of equal talent have lived and died in cotton fields and sweatshops.”

Right now the next Einstein or the next Chamath Palihapitiya may be working in, to name one example, North Carolina’s tobacco fields. I would like to believe that we, as a community, will find a way to give that person some tools and a chance.

Because, really, that’s all that person would need.

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An American hero has died.

It’s not often I’ll post here about someone not based in North Carolina. But Billy Frank Jr. was a titan of a man whose life deserves wide celebration and remembrance. If you knew Billy, then you know why. If you weren’t aware of his life and work, I’d like to take a few minutes to explain.

Where I come from out West, the treaties Indian tribes signed with the United States government were largely made in peace. In exchange for all of the land that now makes up western Washington, 2.2 million acres, tribes like Billy’s Nisqually tribe signed agreements with Gov. Isaac Stevens to preserve their way of life.

It was a pretty sweet deal for the settlers: they got rich, fertile land upon which they could prosper. All the tribes really wanted: to keep fishing and hunting, feeding their families and preserving a culture that had been around since time immemorial. By signing these treaties, the tribes were codifying those rights into law: Article 6, Section 2 of the U.S. Constitution says that treaties are the “supreme law of the land,” on a par with the constitution itself.

But soon, those rights were violated by settlers who wanted to take all the fish and game for themselves, and by state governments who were less than interested in honoring treaty commitments.

What the Pacific Northwest needed was a leader with the passion, charisma and guts to stand up for what was right. Luckily, it had Billy.

The Martin Luther King of Northwest coast native rights was arrested more than 50 times during the so-called “fish wars” of the 60s and 70s for acts of civil disobedience. He was beaten, shot at, slandered and spit on, but he never let it embitter him.

Billy was larger than life, too. A gregarious, friendly man with the firm handshake of a lifelong fisherman, you always knew he was in the room and were always glad of it. It says something that, though he was in his 80s, his passing has stunned many of us. Billy Frank Sr. lived to be 104. I assumed we’d have Billy around for another decade or two, at least. Even his political opponents largely loved Billy, and those that didn’t had to respect him.

Billy was one of the reasons I went to work for the Northwest Indian Fisheries Commission, an organization he chaired for more than 30 years. Besides his passion for treaty rights, Billy understood as few do that healthy fish runs require paying close attention to ecological preservation.

Without habitat, fish and elk have no way to sustain themselves — and neither do we. Billy was a leader with vision who always saw the big picture. He saw the connections between social justice for communities of color and environmental protection. He was passionate about building a better future for native youth — and for everyone.

Up until his last days, Billy was working to make sure that his kids, and yours, and theirs, and theirs — and however many “theirs” you want to attach on the end — would have a healthy planet that would support wild salmon. He was working to protect the sacred commitments that in turn protect the communities he loved.

If you care about the U.S. Constitution, you should care about Billy Frank. If you’re concerned with honoring oaths and the dignity of keeping your word, you should be glad he lived. If you fight for social justice in any capacity, you had a fellow traveler. If you’re concerned about the fate of the planet we’re leaving to our children, you owe him a debt.

And if you have a beating heart in your chest, as God is my witness, you would have loved him.

NC Budget and Tax Center

When making important decisions, people have a right to the best possible information. Facts, not ideology, should drive our policy agendas. This is especially true on budget and tax issues, which affect everyone in North Carolina.

Unfortunately, John Hood’s recent column on the NC General Assembly’s tax changes is replete with bad information. Warning: some wonky details follow.

The Budget & Tax Center uses rigorous methods and accurate modeling strategies that are endorsed and used throughout the economic forecasting industry – including by conservative and centrist groups.

Here’s the thing about making tax changes: there will always be winners and losers.  That’s why it takes careful thought, engagement of a diverse set of stakeholders and consideration of a range of data points and methods. Efforts to establish a reasonable estimate of what will happen as a result of the plan will always be estimates, but policymakers should have the best information available to them as to the direction and magnitude of the impact of their decision.

In the current tax debate, policymakers had two separate types of analysis at their disposal.

  • The sample taxpayer scenarios developed by the state’s Fiscal Research Division. This gives examples of how particular taxpayers will fare under tax changes.  These can be fine tools, but are inherently limited. They pick out particular taxpayers and can’t show you that everyone – or even most people — will have the same experience. The results can’t be extended to everyone in particular filing types, and certainly not­­ to the population at large.

Using this tool alone, as tax plan backers did, is like trying to fix your car using only a screwdriver. Yet even using this limited tool shows that proponents’ claims that everyone will benefit from tax changes is flatly false. That’s right, according to non-partisan Fiscal Research, and even according to the conservative Tax Foundation, there will be taxpayers who pay more under the tax plan.

  • The other type of tool that policymakers could use was an economic incidence model, like the kind that the Joint Committee on Taxation uses, that has been developed by the Institute on Taxation and Economic Policy. The Budget & Tax Center used this model to provide population-level estimates of the impact of tax changes. This is a far better tool than the limited sample scenarios, since it provides an overall summary of the experience of all taxpayers.

Analysis showed that the bottom 80 percent of taxpayers would experience a tax increase on average.  The findings take into account the rough swap of electricity and natural gas from the gross receipts franchise tax to the sales tax, as well as the privilege tax changes for amusements. The findings take into account a household’s total income in order to reflect ability to pay the tax.  The findings also take into account the base broadening of the sales tax.

The model is consistent with real-world experience. First, consumers will pay more indirectly because of changes businesses make to their prices to accommodate for the sales tax changes. The Council on State Taxation — not a group one would call a bastion of progressive views — finds that 40 percent of total sales tax collections are paid by businesses. Second, multi-state, profitable businesses — the bulk of corporate income taxpayers — are going to pass their tax cut on to shareholders, not workers. Those shareholders are very unlikely to all be North Carolinians, meaning that money will flow out of our state.

Record corporate profits have not translated into higher wages for the past thirty years, so why would we assume that a corporate income tax cut is going to all of a sudden give corporations a change of heart and decide to boost their workers’ wages?

In desperation, proponents often turn to the argument that this is going to create jobs.  But not only is there no economic consensus that this is a good strategy for growth, states that have tried it have not seen the promised employment expansion – though they have seen high incidence of poverty. We can’t import the oil production capacity of Texas or the coal mines of Tennessee, so why should we import their model that drives poverty through the roof?

When we juxtapose these two decisions — huge tax cuts for the wealthy versus a “just wait, it’ll all work out” message for working families – we can see the human cost of a serious policy mistake. Pretending that economic evidence supports these choices just compounds that serious mistake.

 

 

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[Note: the following post comes to us from Caitlin Breedlove, co-director of Southerners on New Ground].

By Caitlin Breedlove, SONG Co-Director

As an LGBTQ person, I think what is happening at the North Carolina legislature affects our community deeply. I want LGBTQ people to be involved in fighting back against this repressive legislation because I think it is the right thing to do, but also because it deeply affects us. In the past few months, we have seen terrible changes in North Carolina– the cutting of Medicaid for half a million North Carolinians who are poor and working poor. Attacks against voting rights, our schools, healthcare rights for poor people, and the demonizing of immigrants. These are LGBTQ issues. They impact LGBTQ people deeply. Here is how*:

Poverty: Children raised in Lesbian, Gay and Bisexual families are twice as likely to grow up in poverty as kids raised in heterosexual households. Rural and African-American LGB people are even more likely to live in poverty, and lesbians are consistently more likely to be living in poverty than heterosexual women

Immigration: It seems simple, but thousands of immigrants are also LGBTQ people.

Medicaid: For the first time, low-income LGBT Americans have access to Medicaid. Failing to expand Medicaid under the Affordable Care Act, deprives hundreds of thousands of low-income North Carolinians, including low-income LGBT North Carolinians, from access to health care.

Voting Rights: Read More

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If ever there was a day that highlighted how much we need affordable energy, it was today. Speakers from AARP, NAACP, Consumers Against Rate Hikes and the Justice Center spent some time in the wind and cold to call attention to rising utility costs — and their consequences for working families.

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Rochelle Sparko, a consumer and housing attorney with the Justice Center, made the following remarks this morning about proposed rate hikes for Duke and Progress Energy.

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Rochelle Sparko
Feb. 8, 2013

Thank you for inviting for me to speak today.

I work with the NC Justice Center, a nonprofit whose mission is to build opportunity and prosperity for all. As we move forward to plan our next two decades of energy policy, it is crucially important we consider the needs of North Carolina’s low-income working families.

Each year, about 250,000 North Carolina homes are cut off from their utility services. This is a devastating outcome in the best of times. During a cold winter or a hot summer, these consequences can be life-threatening. If we’re serious about doing right by our working families, we have to consider utility rates. Rising costs can wreak havoc on a family budget.

And the issue of utility costs is of special importance for working families today. This is a uniquely dangerous time for low-income people in North Carolina. We continue to have unemployment numbers cresting 9 percent statewide – rates that are much higher in certain areas. This year, lawmakers also plan to cut benefits for jobless workers and to reject a Medicaid expansion that would help low-income families.

Even in a good economy, hundreds of thousands of people face disconnection of their utilities due to poverty. In a tough economy, where 1.7 million North Carolinians live in poverty, the problem is both more widespread and has a greater impact.

Imagine the city of Raleigh going dark. Imagine that suddenly, 415,000 people in our state’s capitol were without heat and light.

The same thing is happening in our communities every year, where a population greater than the city of Raleigh is forced to go without those basic necessities.

If we plan wisely, we can create a sustainable energy future over the next 20 years. I believe that with judicious planning, we can pave the way to a North Carolina where Raleigh never has to go dark.

But if we fail, the consequences will be severe – and they will fall heaviest on those least able to bear them.