Apple Announces $2.5 Billion Plan To Ease California Housing Crisis (mashable.com) 152
Faced with ever-increasing housing prices, people are leaving San Francisco and the Bay Area, and Apple, whose corporate home is in Cupertino, California, wants to do something about it. From a report: On Monday, the company announced a $2.5 billion plan to alleviate the issue by investing in affordable housing and helping Californians -- especially first-time home buyers and low-income families -- buy a home. "Affordable housing means stability and dignity, opportunity and pride. When these things fall out of reach for too many, we know the course we are on is unsustainable, and Apple is committed to being part of the solution," Tim Cook said in a statement. The $2.5 billion plan includes a $1 billion affordable housing investment fund, which will provide the state of California and other entities with an "open line of credit to develop and build additional new, very low- to moderate-income housing faster and at a lower cost." Another $1 billion will go towards a first-time homebuyer mortgage assistance fund, which should help homeowners with financing, with a focus on increasing access to first-time homeownership for "essential service personnel, school employees and veterans." Additionally, Apple will commit $300 million towards building affordable housing in Apple-owned and available land, a $150 million towards a Bay Area housing fund, and $50 million towards supporting vulnerable populations.
Supply and Demand (Score:4, Insightful)
Re:Supply and Demand (Score:5, Insightful)
Property and rent prices will quickly adjust upwards to match the subsidy. This does nothing to address the supply problem and the local/state governmental policies that prevent new building.
Re:Supply and Demand (Score:4, Insightful)
Bingo. It's the same problem we're having up here in most cities in Canada, of course our housing markets have multiple issues including an influx of foreign money and market-speculated ROI's that real estate always increases in value. When you point out the housing, condo, business, retail crashes of years past. Nobody cares. Of course nobody who bought in high in Vancouver ~1.5yrs ago is saying there are problems either, never mind that their investments have crashed upwards of 60% in the last 9 months.
Well you guys south of the border should sit back and enjoy the shitshow with Jr in charge. Between Encana saying "fuck this noise, we're moving our corp headquarter to the US" and nearly 30% of our countries GDP being based on real estate the next 2 years are gonna be really interesting up here.
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That's not 100% accurate. The cities will continue to go up in cost and that's just how it is (simple supply and demand). Giving bigger wages or subsidizing the cost for new buyers will just bring that cost up. The solution isn't in controlling the cost of house either.
For 1, preventing residential properties such as detached and semi-detached from being purchased for the purpose of renting should be disallowed or at least, taxed more aggressively. I have 2 friends that own 8 - 10 properties each because it
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No it's accurate. Go read up on the condo crash in Canada, and the housing crash in Japan back in the1980s.
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Apple's proposal is a publicity stunt.
There is NO chance that the government will allow the housing to be built.
It is nearly impossible to get a residential building permit approved in the SF Bay Area. The voters have a strong vested interest in high property values and will not accept permissive construction policies.
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Apple's proposal is a publicity stunt.
There is NO chance that the government will allow the housing to be built.
Sure it will. The housing will just have to be built in Shanghai, Bill.
Re: Supply and Demand (Score:2)
That is the elephant in the room, market forces are not at work in the Bay Area, a housing cartel fixes supply to keep prices high. CA has vast land resources they do not develop. Righties call them communist, but if California was run by Chinese, they would have planted 60 billion trees in their desert areas and have ghost cities there because of too much building. Just good old fashion rich people being corrupt.
If Supply & Demand worked the way you say (Score:2)
Could be maybe we need to do a bit more than just hope some billionaires throw money at the problem? Maybe a coordinated response to the crisis from a large, powerful actor like what happened in the 40s, 50s and 60s when the State and Federal government subsidized housing while creating zoning and lending laws to regulate the affordability of it. Maybe the problem requires just a bit more thought that "Supply an
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then the problem would have solved itself when more supply naturally occurred to meet demand.
In SF, 95% of building permits are rejected. Most potential builders don't even bother to apply.
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If Supply & Demand worked the way you say then the problem would have solved itself when more supply naturally occurred to meet demand.
Supply and demand does work the way he says, it's just that local government inhibits market forces with zoning laws. But market forces are still in effect driving up housing prices because supply is not allowed to increase appropriately. Easier access to loans would only make the existing home prices go up more. The part of this fund which is for future development could help, but it would have to get past the same zoning laws and permit restrictions current developers have to deal with.
Housing prices in p
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Housing prices move up to expect the same amount of money to be given...
Absolutely this (Score:2)
Absolutely the above post, nothing being done in California right now truly resolves the state's core problem, there is a massive shortage of housing.
What needs to happen is communities experiencing the worst of the housing crisis such as those in silicon valley need to get over themselves and allow vertical construction in their communities. The entire valley should be America's greatest new metropolis where the vast majority of its workers can afford to live in homes of their own. Instead, we have suburba
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Absolutely, Oregon has been having this same problem as well.
Apple Has Caused its Share of Housing Crisis (Score:2)
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And god forbid that in such a position you should try to fix the problem as that would betray half of the internet of their chance to complain than company X is doing nothing against $PROBLEM.
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Get credit for saving the day, when you are part of the problem?
The "housing crisis" is the result of deliberate government policy, supported by property-owning voters.
It was not caused by Apple.
Corporate housing (Score:5, Funny)
They should open a General Store too. That was we can be housed by the Corporations too. All hail the Corporations!
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I know what you are referring to, but keep in mind that that experiment turned out rather well in other places. Giving workers a chance to buy and finance a small house in a company "village" was one of the bigger progresses für workers rights and working conditions in the age of industrialisation (espescially in the Rhine area)
I guess the key to success were that these were honest projects and not a new way to extort your workers.
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No that was never a good idea. Germany is hardly an example of good ideas.
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Yes, the US experiences with the truck system showed that this could have gone off into the other direction, but, well, *shrugs* it works till now. But it's definitly not foolproof, that's right.
$2.5B of bribes to zoning officials (Score:3)
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People who already own homes obviously only want home prices to go up and the only way to really achieve that is by minimizing the supply of newly built entering the market, particularly affordable ones like ones in apartment complexes rather than detached houses. Apple trying to expand the pool of people able to afford a home at current prices is only going to make the
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Yeah Apple should use the $2.5B to get the zoning laws changed so more housing can actually be built (and make it the stuff people can actually afford rather than super-high-end condos or massive mansions).
That said, is $2.5B enough to overcome the power of the lobby group that represents the NMBYs who own all the housing stock and don't want any more built?
"... of credit" (!!) (Score:2)
They saw a desperate market. And decided to generously leech of the desperate with massive profits.
And when the government needs to recoup those unnecessary added costs with taxes, it's "Hurr durr da ebil gubbernment!" again.
Genius plan, leeches! Just way outside of your core field of rip-off jewelry, don't you think?
Wait a minute... (Score:5, Interesting)
"...plan includes a $1 billion affordable housing investment fund, which will provide the state of California and other entities with an "open line of credit to develop and build additional new, very low- to moderate-income housing faster and at a lower cost."
So this is a loan, not a grant? And how much money are they going to make on that? When's the last time you saw Apple donate something?
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If it's to avoid the heel of state-mandated taxes or regulation, they'll find their checkbook. I suspect that's happening here now.
Supply and Demand (Score:2)
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A better solution would be for these tech companies to spread out across the nation with smaller tech offices and greater work from home...
You mean ask a technology company to use like...technology or something?
Doubt they could figure out how to do that. I mean after all, it's only 2019. We need to destroy the planet perpetually commuting in the name of Big Oil for at least another decade or seven before we realize the value of remote work.
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Supply and Demand is the real problem.... A better solution would be for these tech companies to spread out across the nation with smaller tech offices and greater work from home. So people living around the US doesn't need to rush to California for a job.
Yes! This is the answer! I don't know how anyone can expect housing prices to NOT go through the roof when you keep drawing a population of well paid people into a finite area. Typically one that also has the tendency to limit housing construction.
They should build an arcology. (Score:5, Interesting)
Apple should build an arcology and rent to employees. Sure, that puts you in a vulnerable position if you lose your job, but if the law doesn't already prevent them from evicting people because they don't work there any more, that problem can be solved with only a small amount of additional legislation. The law already requires them to give 30 days notice regardless, or 60 days for those who have been a resident for a year or more. Housing [some of] their employees would go a long way towards alleviating the problems caused by their existence, like traffic impact, and of course their consumption of housing resources.
That would also require some zoning cooperation, but I'd be surprised if they couldn't secure that.
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Apple should build an arcology and rent to employees.
My parents live in a company town. Briefly. My dad was fired after my mom refused to buy - literally - rotten meat there, and shopped elsewhere.
And yes, I do believe and Apple owned company town will end up the same way.
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My parents live in a company town. Briefly. My dad was fired after my mom refused to buy - literally - rotten meat there, and shopped elsewhere.
That would be illegal today.
And yes, I do believe and Apple owned company town will end up the same way.
So then lots of people would quit working for Apple, and everyone but Apple wins. A plan with no drawbacks!
Housing Bubble 2.0 (Score:4, Interesting)
Devaluation of labor continues (Score:2)
Comment removed (Score:5, Interesting)
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wait a minute. there's a 1% tax limit on homes in CA?
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It's a bit of an oversimplification, since counties and cities get to ride a little bit on top, but he's talking about this:
https://en.wikipedia.org/wiki/... [wikipedia.org]
Huh (Score:4, Insightful)
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I notice they're not committing $2.5 billion to raising their workers' pay so they can afford to live where they work.
Apple claims [apple.com] 90,000 direct employees in the US. Divide that $2.5 billion and you get a one-time payment of a bit less than $28k per employee. That's not chump change, but isn't going to make the difference in finding a place in the San Jose area.
Why does the State of California (Score:2)
Just bring back the State and Federal housing subsidies from the 40s, 50s and 60s that were the bedrock of the middle class.
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need a line of credit?
Because Democrats have a supermajority in both houses of the legislature, and they are genetically incapable of not spending themselves into bankruptcy.
Apple - homes? (Score:3)
The average price of a home in Cupertino is just over $2 million. Apple can take that $2.5 billion and buy houses for about 1200 families.
Rather than build housing, use that $2.5 billion to lobby the State Government to OPEN UP BUILDING! Allow more construction of homes, rather than keep the supply chained up nice and tight...
Omg (Score:2)
Apple invests $2.5 billion in San Francisco housing
"After environmental studies, only $1200 remained, which wasn't eough for a tiny house."
Yep (Score:2)
Just my 2 cents
Drop in the bucket (Score:3)
When I read about Facebook doing the same thing, my first reaction was the same as it is now....there's no way a small investment of $2.5 billion will do anything when it costs over $2 million to buy a house reasonably close to work in SF/SV.
As others have pointed out, California has a different property tax system that encourages people to hang onto their houses. However, my opinion is that people are hanging onto their houses mainly because that's all they have for retirement. I'm near NYC and we have a similar (but less insane) housing market...the closer you get to NYC, the more you pay for a crappier house. People are paying $700K+ for cheap 1950s 800 sq. ft. Levitt houses on practically no land. It's not $2M, but it's crazy. I feel people are hanging onto their houses for dear life so they can use them as a retirement fund and move to North Carolina or Florida since they don't have a 401K or other safety net beyond Social Security. The generation retiring now is the last one to have pensions and other guaranteed sources of income...everyone else is at the mercy of the stock market, their own plans (or failure to plan) and other forces. When everyone dumps their houses onto the market, the prices will drop and unfortunately I don't think it's going to be an orderly selloff. Sure, you can sell your $800K house and buy a $150K mansion in North Carolina, but only if people are willing to give you that...and they probably won't be if they have their pick of thousands of other houses.
$2.5 billion will buy a little over 1200 SV houses at $2M each...that's not going to change anything. The only other thing I can think of is company-provided housing which would be a privacy/indentured servitude nightmare. Imagine getting fired and having your belongings dumped out at the front gate.
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However, my opinion is that people are hanging onto their houses mainly because that's all they have for retirement.
It's actually because they want to continue to live in California. Their property is worth enough that they could sell it, buy an equivalent home in some other state, and have a big pile of money left over. But then they wouldn't live in California. California does have unusually low property taxes given the amount of money it spends trying to make life better for its citizens with various assistance programs. The state with the lowest property taxes is Hawaii, but it's expensive so they couldn't necessaril
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Californians, stay out of NV please I want to buy a home while they are still only 400k.
Many homeowners had inadequate insurance and have had difficulty getting rubble cleared, and getting permits, so only a minority of people are rebuilding. California already had a housing shortage, so people are leaving the state in droves. Get ready to be Californicated. It could make things better in this country politically, though, if some red states flip to blue because of the Californian exodus. Republicans in charge of the senate hasn't gone so well when it comes to stuff like rights, or (ironically)
How to solve a housing crisis (Score:2)
For California specifically they need to get rid of the law that pins the property tax to the purchase date of the property. There are companies whose property taxes hasn't been raised in decades.
For everywhere else, make the property tax progressive. The more valuable land you own, the more property tax per square foot you pay. Large land owners will find it too burdensome to hold onto to so much property and will be willing to sell to those who don't own any land.
It won't work because they're not creating supply (Score:2)
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Good luck (Score:2)
This'll die once all the special interests stick their oars in.
Then the local government, hoping to seem sensitive to these whack jobs, basically tries to hold you for ransom before killing the project outright.
Private Sector (Score:2)
Looks like the private sector is looking for ways to fix issues caused by decades of mismanagement at the city and state level. Good for them.
Won't solve the real problems (Score:3)
A huge part of San Francisco is zoned single family [imgur.com], and the neighborhood activists would sooner vote Republican than give that up. By definition, affordable housing is declining real estate values. Anything else is a lie, and nobody ever votes to lose money.
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Indeed! Many parts of CA paid good money for good houses in good weather and have a lot of lobbying power to keep it that way. There's definitely a battle over what "personality" CA should have.
Y'all are missing the point ... (Score:2)
The demographic described in TFS can't afford to live in those areas and Apple needs housekeepers.
Not-a-monopoly PR pity-plan (Score:2)
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Corporate Taxes? Are you some sort of Commie? Taxes are for little people.
Re:Maybe US companies could pay fair taxes? (Score:5, Insightful)
I guess you don't understand how corporate taxes work. Where do you think corporations get the money to pay corporate taxes? The "little people" ALWAYS pay, doesn't matter who is writing the check....
Not true (Score:3)
Corporations are also constrained by how much bullshit people will accept before the guillotines come out.
Your line of reasoning is what got us 1200 years of Dark Ages.
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prices aren't infinitely elastic. If corporations could raise prices with no limits they'd sell a gallon of Milk for $1 trillion dollars.
To do that now, you have to be a pharma company.
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Where do you think corporations get the money to pay corporate taxes?
In Apple's case, from their massive hoard of cash.
The market will bear only so much, but Apple makes piles of profit. Presumably they are already pricing their products at the maximum price that people will pay for them. If Apple had to pay more taxes, they still wouldn't raise the prices of iShit, they'd simply pocket less profit.
But even if they did raise their prices, people would have a choice as to whether to buy their products. This isn't 1984, however much Apple would like it to be with their walled
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That is Apple's choice, if they choose to absorb the cost of corporate taxes from their profits. That doesn't change where the money came from in the first place (their investments aside), the money originally came from consumers buying their products and services.
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Uh, obviously. Um, but according to you the consumer WOULD PAY MORE and Apple wouldn't "absorb" the cost at all. You are dumb if you think Apple prices their products based on their corporate tax rate. If we raised taxes on Apple the cost of an iPhone wouldn't go up, because Apple knows they already hit their pricing limit that people are willing to pay for an iPhone. Real life isn't some Ayn Rand fantasy.
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I simply said the consumer would pay the tax. Corporations only get their money from consumers buying their products and services. If a corporation maximizes their profits, the consumer is still supplying the money. Taxes are an expense to a company, just as employee salaries, raw material costs, etc. The price of any product is made of the expenses incurred to make the product plus profit margin, Apple enjoys extremely healthy profit margins and can afford to absorb a corporate tax increase for some amo
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I simply said the consumer would pay the tax.
And you were simply wrong.
Re: Maybe US companies could pay fair taxes? (Score:2)
Where do you believe the money then comes from?
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The money is Apple's by the time taxes are paid. Or not, as the case may be (and is now.)
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The money isn't sitting under a matress somewhere. It is all invested in some way or another.
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Apple charge 30 bucks for a 0.3 buck cable. The price they charge for cables is unrelated to the level of taxation they pay.
Take Facebook. Most of their revenue is ads or ad-related services. The businesses that advertise on Facebook are mostly luxury goods, i.e. you rarely see your local grocer telling you about the cost of a loaf of bread.
Facebook is in a competitive industry, so can't just raise advertising rates indefinitely. The people paying to advertise there are generally not the ones you rely on fo
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Exactly. That guy is some sort of Ayn Rand moron. I didn't know they even existed anymore. I thought we were beyond that.
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If the corporation has high profit margins of course they may choose to absorb the cost of taxes from their profit margin, it doesn't change the fact that that profit was originally paid by the end consumer, which is all I am implying when I say corporations don't pay taxes. Corporations that have low profit margins more than likely will have to raise prices if taxes go up, not every corporation is an Apple or Facebook. Corporations largely only get their money from consumers willing to buy the product th
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Not necessarily. A lot of it is flowing to the owners, stock holders, Board of Directors, CEO, and other executives. The system can be changed to siphon some of that off so that fat cats have 7 mansions instead of 25. Our inequality is absurd.
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I guess you don't understand how corporate taxes work. Where do you think corporations get the money to pay corporate taxes? The "little people" ALWAYS pay, doesn't matter who is writing the check....
I guess you don't understand how corporate prices work. They charge as much as the market will bear without regard to cost of production. You think additional taxes are passed 100% to increased prices. If they thought people would pay more they'd already be charging more.
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No where did I say corporations would charge more to cover taxes. Consumers buy products and services from corporations, corporations money comes from consumers. Taxes are an expense of making said product or services, that cost plus all other costs and profit margin are the final price paid by the consumer of the product or service. At the end of the day the money used by a corporation to pay any taxes was provided by the consumer of their product or service.
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No where did I say corporations would charge more to cover taxes.
Oh, so you do understand and are just transparently trying to mislead. Thanks for clarifying.
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I'm sorry you are trying to put words into my statement, I was not trying to mislead anyone. I stated exactly what I meant, nothing was implied.
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This statement is tantamount to saying that all prices are completely elastic, all expenses can be passed on to the consumer, and no expense can ever impact profits. But the funny thing about profits is that they are what is left over after expenses are subtracted from revenue. Your claim is that profits can always be arbitrarily high, which is patently false. In any truly competitive market, like commodities, profits rarely top 4%.
Economics tells us that a business may make a larger profit by eating a new
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Not what I said at all, you are inferring too much into what I stated. Corporation's charge money for the products and services they produce, that money comes from the consumers that purchase their products, so the money a corporation has has come from its consumers. Out of the money a corporation takes in (from consumers), it must pay for the cost of the goods it produces part of that cost may be a corporate tax, so people are paying the corporate tax through the price they pay for the product. Some cor
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Oh, my bad, I thought you made a statement with meaning. "If corporations pay taxes, it comes from you because ALL corporate income comes from customers" is just a trivially true statement with no real bearing on anything.
What I'm saying is that, for any cost increase, said increase may come out of profits, rather than necessarily coming in the form of raised prices. Sometimes it is not the customers, but the investors who take a shave.
As for restaurants, funny thing but we have data because of many states
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"We should make the corporate tax rate 0%"
Yes!
"I know: lets just give taxpayer money directly to the corporations!!!"
Absolutely No! Corporations should not be receiving any sort of tax payer handouts, period. Crony capitalism is evil and is the root of many things wrong with our current system.
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Stopping funneling money their way would actually be about as good as getting them to pay their taxes.
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Okay, what about people? Should people pay taxes?
Yeah, corporations ARE people, my friend. Just ask that Supreme Court law clerk who wrote that note in the margins that has since been treated like a damn constitutional amendment. Until corporations are NOT treated like people, they should continue to pay taxes like people.
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How about homeowners pay their fair share of property taxes? Oh wait, Prop 13 was passed and now homeowners are just sitting on their asses refusing to sell.
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Corporations don't pay taxes, people do. Taxes are just another expense passed along to users.
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That's the same myth as "if we pay higher wages, everything just gets more expensive". It doesn't.
It actually would, in a perfect capitalist world. In a perfect capitalist world, the rules of supply and demand would basically eliminate any profit margin. But, surprise, surprise, profit is still a thing.
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>That's the same myth as "if we pay higher wages, everything just gets more expensive". It doesn't.
[[citation needed]]
Where does the employer get that extra cost from?
Bonus question, if that's not true, then where does inflation come from?
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In a perfect capitalist world, the rules of supply and demand would basically eliminate any profit margin
Would you invest or start a company if there was no profits? If so I have a special investment opportunity for you. In a perfect market profit margin is a reflection of the risk to assets. That is why the corporate tax rate is lower then the individual rate, assets are at risk.
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Aren't corporations defined as "legal persons" for some cases?
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Taxing is not the issue in California. If it was they would have solved their problems before it got to this point as that is their first solution to any problem.
CA government is broken. I just hope that the millions of Californians that are leaving the state do not bring CA with them. Spreading the cancer that is CA politics.
Re:Maybe US companies could pay fair taxes? (Score:5, Interesting)
Corporations paying more taxes will not solve this particular issue, just like this $2.5 billion fund will do nothing significant. This problem is caused by local governments not allowing development because existing property owners (voters) don't want their property values to fall if housing becomes more affordable. Most of the people who are hurt by this don't live in the city yet, so their opinions don't matter to the local government since they aren't voters in their districts.
You can probably only solve this problem with external actors. This could come from either state government or federal government. Either create (or enforce existing) laws requiring affordable housing with financial penalties for non-compliance. This provides a counter-balance against local government and once again allows market forces to fix the problem more naturally.
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Taxes is, sadly, a loaded word. Theft is one that fits better IMHO.
Because that other word is any less loaded?
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It's complicated, obviously, but theft isn't the right word. That's what they do with monetary inflation, without any confrontation.
Taxes are more like 'extortion' because there's an element of "do this or else". Sometimes the IRS does steal funds directly from bank accounts but most people pay them out of fear of bodily harm.
Some people may think it's "stolen" from their paycheck, but it's important to remember that their employers have been extorted to do that.
The "it's complicated" comes about because
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So we should stick with the word "taxes" because that what describes it best without any other loaded meanings?
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Way off. (Score:2)
California passed laws LONG LONG ago that haven't been able to be undone. The flaws in the system combined with entrenched people who fight to maintain the status quo is a repeating pattern in political systems throughout history.
Given how parties change over time and especially now when they are practically EMPTY brand names that are for sale. The GOP is just a tad short of putting up FOR SALE signs on their brand; just to point out how extreme it has become by picking the worst one. So to get into tribali