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UncategorizedThe Agenda: Feb. 9-14

The Agenda: Feb. 9-14

 Clean Power, the CIA, Hedge Funds … and are we really punishing the rich?

 

The mayor meets reporters after Question Time
The mayor meets reporters after Question Time

By Tim Redmond

FEBRUARY 9, 2015 – Question Time, the brilliant creation of former Sup. Chris Daly, has been pretty badly watered down.

The original idea was to force the mayor to appear before the Board of Supervisors once a month for a productive – and free-ranging – policy discussion. But  then-Sup. David Chiu, as board president, negotiated the implementation rules with the Mayor’s Office, and the chief executive was fully protected from any real debate: The supes have to submit questions in advance, the mayor’s staff writes a response in advance, and the mayor simply reads the equivalent of a press release to the board.

If London Breed wants to make her mark as the new prez, she ought to change that: The idea, which the voters approved, was that the mayor – without his aides, without written responses to prepared questions – would have to debate and defend his policies, in public, with the supervisors free to ask anything they want. She can rewrite the rules to say: No written questions in advance. No written responses. The mayor ought to be able to show up and take a few questions and handle the discussion. If not, the voters ought to know that.

At any rate, I almost always go – because sometimes the questions are interesting, and because the mayor has to walk from the board chambers down the hall to his office, and along the way us pesky reporters get to do what the supes can’t – ask free questions, and follow up, and actually engage the mayor.

So this week, on Tuesday/10, the mayor will appear, and two supervisors submitted questions. They’re both about CleanPowerSF. Eric Mar and John Avalos want to know if the mayor is serious about pursuing, and putting resources, into a program that will allow the city to compete with Pacific Gas and Electric Co.

My question: Are you willing, Mr. Mayor, to say now, in public, that you will oppose any efforts by PG&E or its union, the IBEW, to undermine CleanPowerSF? There is no compromise, no consensus on this one; whose side are you on?

The mayor appears at the Board Chambers at City Hall, 2pm. Don’t get there later or you’ll miss it; Mayor Lee is pretty much always on time.

 

You want to know what the CIA is up to, has been up to, and is going to be up to? There’s a chance to hear from two experts this week. Peter Dale Scott, whose new book is The American Deep State, will join David Talbot, whose latest — The Devil’s Chessboard: Allen Dulles and the Rise of America’s Secret Government – hits the shelves this fall – will talk about the CIA vs. Democracy. Daniel Ellsberg will be making a guest appearance.

Presented by Green Arcade Books Wed/11, at 7 pm at the McRoskey Mattress Factory, 1687 Market Street (at Gough) in San Francisco. Admission: $5.

 

The fire at 22nd and Mission caused more than a short-term displacement: Many of the families will be priced out of San Francisco. There is no insurance coverage for the fact that rents are insane, no protection for people who not only lost everything they own (including passports and critical immigration documents) but also lost the ability to afford a new place. Many of the tenants had been living in rent-controlled units for more than 20 years.

The good news is that supporters have raised more than $160,000 to help them out. The goal is $200K; you can donate here, now. You can also call Airbnb customer service at 415-800-5959 or email trust@airbnb.com and ask if the company will underwrite “sharing” space for the displaced people.

Oh, and my other question for the mayor on Tuesday: What’s he going to do to make sure that the apartments are rebuilt as quickly as possible, so the original tenants get to move back in at their original rents?

 

I read the New York Times this weekend, and apparently Hillary Clinton is worried about her economic platform. She knows that a lot of her husband’s measures – welfare reform, Nafta – were unpopular with core Democrats, and she’s talking to Robert Reich. But:

Behind many of these proposals is a philosophy, endorsed by Mrs. Clinton’s closest economic advisers and often referred to as inclusive capitalism, that contends that a majority of Americans do not want to punish the rich; they just want to feel that they, too, have a chance to succeed. It also calls for corporations to put less emphasis on short-term profits that increase shareholder value and to invest more in employees, the environment and communities.
Wait: Punish the rich? Seriously? The rich have gotten where they are today, and economic inequality has become a major national problem, entirely because we have given so much to the rich. It’s no coincidence that the tax cuts and favorable treatment of corporations and investment vehicles that started under Reagan and continued with Bush I, Clinton, and Bush II and haven’t abated under Obama have, as a matter of consequence and policy, ensured that 100 percent of the economic gains of the US economy in the past 20 years have gone to the 1 percent.

You can’t fix this level of income inequality in this economy just by offering “opportunity” and a “level playing field.” You have to ask the 1 percent to contribute their fair share – which means they have to pay a lot more in taxes than they do today.

Why is the entire burden of economic inequality falling on the poor and middle class who have to “pull themselves up?” We didn’t start this class war; it was imposed on us. And now it’s time for a little honesty:

Any real platform for economic equality has to work both ways: Encourage opportunity, but also demand that the rich share more. Remember, in the post-War era, when the US economy was booming and the middle class growing and prosperity actually getting shared, the top marginal tax rate was at least 70 percent. That’s about double what it is today.

Asking the richest Americans to pay more isn’t punishment; it’s an acknowledgement that the economy doesn’t work well when a few have so much and so many have so little.

BTW: Nice of Mark Zuckerberg and his wife, Priscilla Chan, to donate $75 million to SF General. If they  were paying their fair share of taxes, they wouldn’t need to donate – that money would be available anyway. But more interesting: Who suddenly decided that we’re going the name the public hospital after them? Doesn’t that have to go to a vote of the Health Commission or the supes? Nothing against the Facebook founded, but the vast majority of the billion-dollar rebuild of SF general was paid for by the local taxpayers, who approved a bond act that is covered by property taxes.

Why not the “SF taxpayers General Hospital?” We gave more than ten times what the Zuckerbergs did.

 

And speaking of great wealth: The San Francisco Retirement Board is going to meet Wednesday/11 to decide whether to invest worker pension money in hedge funds. The last time this came up, pretty much every retired union member in the room opposed the idea: Hedge funds, they say, charge high fees and can bring in high returns, but are also high risk.

All of this is happening, of course, because city officials have tried to make easy decisions: Instead of fully funding retirement benefits, they have assumed in the past that the stock market would keep rising – and when it collapsed, everyone panicked.

Now the retirement system is being forced to get a high rate of return (to keep the city’s pension contributions low), and that’s a recipe for … well, a fight over hedge funds.

Public comment is at 1pm. 1145 Market, 6th floor.

 

Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.
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27 COMMENTS

  1. This would be a perfect time for the owner to Ellis the building. That way he would not have to worry about any tenants returning, and could do the rebuild to a higher spec to attract a well-heeled crowd. It’s location next to Vida confers considerable cachet and he can monetize that if he moves deftly.

  2. You idiots are so naive. Those apartments are not getting rebuilt… Why would the landlord do that? He hit the lottery and he is gonna run as fast as he can from the involuntary servitude known as rent control. Enjoy the communist circle jerk!

    As for housing the people, landlords in SF know that no good deed goes unpunished. With the likes of Campos out there, nobody wants to stick their neck out. When the time is up you are likely to get an Eviction Free protest at your kid’s soccer game.

  3. Good question, WC. And while I am not qualified to give tax advice, I would proffer the following that I have garnered from reading around:

    The obvious way to avoid property tax is not to own property in the US. That said, in CA if you have a property nicely Prop 13’ed (yes, it’s a verb) then you’d be silly to give that up.

    Avoiding the death tax is easy. Put your assets in a non-revocable trust. Or, if your beneficiaries happen to be overseas residents, gift it all to them before death.

    There is no tax on gifts, although recent gifts may be added back into your estate for death tax purposes.

    Anyway, this is all moot in the sense that a person who holds a billion in cash or stocks pays no tax on that wealth.

  4. Wealth is not taxed in the US except in a couple of avoidable forms. There is no generic wealth tax.

    Gary only fault was confusing wealth and income. Yours is twisting words and being pedantic. Give it up.

  5. “There is no* wealth tax** in the US***.”

    * no direct tax
    ** unless you own real property
    *** and as long as your estate is small enough

    “The figures that Gary cited were for income*..”

    * except for the figures that show the richest decile owning three fourths of the wealth

    Whatever happened to, ‘just the facts?’

  6. There is no wealth tax in the US. Evidently both the founding fathers and the voters agree on that.

    The figures that Gary cited were for income not wealth.

  7. leave it to Tim to shit on the the largest single private gift from individuals to a public hospital in the United States. The constant refrain from certain quarters in SF is that tech needs to give back to the community. Here is an awesome example of just that and the result is snark that the City is looking into naming it after the Z’s. Oh, the horror of it?

    and for the record, I’m 100x happier that Z gave the money directly to the hospital where it is clearly and unequivicably going to be put to a great use, as opposed to dropping it into the regular SF tax base where it would likely have simply been pissed away by a bunch of dopes

  8. Sam, let’s recap:
    – you assert, ‘we do not tax wealth.’
    – I note that this blanket assertion is false
    – you assert, ‘we don’t tax wealth,’ though a paragraph later you concede we tax property
    – I reiterate, we tax wealth

    I am glad you share my affection for facts. It is a fact that we tax property wealth directly in the US.

    Let’s leave aside the ad hominems, shall we? Make accurate factual statements and we’ll talk policy.

  9. Agreed. It is already hitting cities with bad economies, like Detroit, Harrisburg, Vallejo and Stockton. Richmond came close and even Oakland looked in danger 3-4 years ago. Chicago and Illinois in particular dramtically under-funded.

    SF is in better shape as it is rich, for now anyway But eventually the pension time-bomb will hit, probably when the markets take a major dump.

    If we don’t fix this problem, a bankruptcy judge will, by cramming down those pensions.

  10. WC, as explained, there is no tax on wealth with the possible exception of property tax (avoidable by owning property elsewhere) and death tax (avoidable by any good accountant).

    If you know of any other ways we tax wealth (as you claim but do not cite) then say so. I know of none.

    Anyway it is all moot because Gary meant income, even though he said wealth.

    By the way, you have a nasty habit of making your last paragraph some kind of homely avuncular sounding advice. First, I don’t need and won’t take any advice. Second, it makes it sound like you lack confidence in your argument and are trying to bolster it by putting down the other party.

    Just the facts, ma’am. Leave out the “advice”.

  11. Sam, please don’t confuse the issues.

    One, most income for the wealthy is not wages. Two, we tax wealth: some directly at the state and local levels, some indirectly at the federal level.

    Your claim that a direct federal wealth tax is unconstitutional apparently is open to argument (‘sufficient question about its Constitutionality that the issue is debatable’, wikip), for example.

    And while I focused on wage income, if you focus on inherited wealth, it is up to 65-75% of total wealth:
    http://www.econ.umn.edu/~vr0j/ec8503-14/piketty11.pdf

    That leaves one third to one fourth of total wealth that is not like the Walton heirs and Paris Hilton, which is exactly the opposite of what you said.

    Please be more careful with ideologically comfortable assertions. It is easy to make false claims. One idea might be to link to your sources, as I do.

  12. “Instead of fully funding retirement benefits, they have assumed in the past that the stock market would keep rising.”

    City workers have defined-benefit pension plans with guaranteed compounded returns of 6-8% annually built in. They negotiated these sweet deals in the 1990s, when the stock market was going gangbusters and inflation was 5%. It is ridiculous that taxpayers have to fund this largesse. The real rate of return since 2000 has been around 4%. City workers have to learn to cover their own costs. Detroit/Stockton looms down the road for them and for all of us unless workers accept these facts.

    No one would mind really, except f that general fund monies have to be paid into the pension pot instead of funding schools, hospitals, road and other infrastructure.

    This pension problem is sucking the city dry.

  13. WC, you are wrong to imply that most wealthy people were born wealthy. As I noted earlier, about 83% of wealthy people made it themselves. That leaves about one sixth who are like Paris Hilton.

    We don’t tax wealth in the US. In fact it would require an amendment to the US constitution for the federal government to introduce a wealth tax.

    Property tax is an exception to that. Almost everywhere taxes land or buildings. It can be a problem because there is no assurance that someone who owns some land has any cash to pay the tax. But we probably can’t get rid of it at this point.

    The only other form of tax on wealth that I know of is the estate tax which, fortunately, is quite easy to avoid.

    In the US, we tax transactions, not wealth. If you have a billion and refuse to invest it, you will pay no tax. Gary was confusing the two.

  14. Sam, the vast bulk of income for the top 0.1% is not wages. Some of the wealthy do work, pace the Walton heirs and Paris Hilton. None of them got wealthy on wage income alone.

    We do, of course, tax wealth: we tax property directly, we tax other assets indirectly. There are some who argue we should tax all wealth directly.

    Please be more careful in making blanket assertions that suit your ideological reflexes. It’s very easy to make false claims without realizing it.

  15. Gary, you should re-read what you wrote:

    “The richest 10% have 80% of the wealth. So they should pay 80% of the taxes. Pushing taxes on only those who actually work is idiotic.”

    Your implication is clear and false – that the wealthy do not work. in fact, they are wealthy because they have worked, successfully.

    Anyway, we do not tax wealth. We tax income and transactions. You can be a billionaire and pay no tax as long as you do not invest or spend it.

  16. For years, I’ve urged progressive Supervisors Mar and Avalos and Campos to hold their Question Time forums at City Hall. Why don’t they set a better example than the Mayor regarding QT? Imagine if there was a set day of the month in the early evening for constituents to question the Supervisors directly and air it on SFGov TV.

    Not the least bit surprised Tim is so shortsighted about which elected leaders at City Hall should face questions directly.

    There’s also the matter of screwing the public at Tuesday BOS meetings by playing hide-and-seek with public comment time. You never know if it’s item 10 or 43 or 92 on the agenda, and our prog Supes are fine to make the public wait, wait, wait for them to blow hot air with proclamations and recognition certificates and photo-ops with those receiving certificates.

    I’d be the first to laud the progs if they implemented a set time, say, 3 pm for public comment or made a fixed number, say, item 20, on the weekly agenda so folks would know when to show up to speak up.

    The Berkeley City Council takes public comment at the start of their weekly meetings and 15 minutes is allotted and who gets to speak during that time is determined by lottery. For everyone who isn’t picked for those 15 minutes, more public comment time is available at the very end of the meetings. How civilized!

    Maybe Tim and his prog buddies on the BOS will look across the bay for leadership about respecting the public during weekly Supes’ meetings.

    When was the last time the prog Supes did something to expand public engagement at City Hall?

  17. Your first statement assumes that the wealthy do not work. In fact five out of six HNWI’s made their fortunes rather than inherited them. And most HNWI’s work even though they do not need to. Do you really think that Buffett, Gates, Ellison and Zuckerberg need to work?

    Most employers put in a few percent matching dollars but nothing like the 50% which the city does. You are correct that it may not change in my lifetime. But I am certainly free to move elsewhere at the right moment and male that problem someone else’s.

    As it happens, I don’t think investing in hedge funds males any sense. But I can understand why the retirement find trustees feel desperate. Those assets are not close to matching the liabilities, and you can look at Detroit to see how that ends – the taxpayers and creditors are getting screwed, but so are the public sector workers, as they should.

  18. The richest 10% have 80% of the wealth. So they should pay 80% of the taxes. Pushing taxes on only those who actually work is idiotic.

    As for city workers funding their own retirement plans, Governor Brown’s pension reform law mandates that employees fund 50% of their retirement, which is a huge improvement over the 0% that many State and local workers were paying. This will be implemented over time, and all new employees are paying more now, since 2013. Note that while the press has rightly exposed the inadequacies of many pension systems, there are several jurisdictions that were not affected by pension reform because they already had those rules in place. Those pension funds that are well managed and fiscally sound, and should be a model for all jurisdictions.

    Finally, many workers have part of their retirement funded by their employer, via 401k matching, etc. The city funding of pensions isn’t going away in your lifetime, so you may as well get used to it.

  19. VM, I think the UK question time is highly entertaining theatre. But I’m not sure what it really achieves. Very often the PM just responds “I refer the right honorable gentleman to the answer I gave some moments ago” rather than give substance.

    While the questions are often really speeches phrased as a question. Example: “Would the right honourable gentleman not agree with me that . . ?” followed by the inevitable 500 word diatribe. Not really a genuine question at all.

    The other thing to bear in mind is that the questions are addressed to the prime minister, who is also a member of the same parliament. He/she is not the head of state. Whereas the proposal here would be for the legislature to interrogate the executive, rather as if Congress could question POTUS. I don’t know of any place where that happens.

    I like the cut and thrust of debates, where the smarter guys wins. That is why I spend time here. But all that said, I’m not sure anyone in city government is smart enough to carry it off with the style and wit that they manage at Westminster. It would probably just be the usual suspects with the usual whines.

  20. Great point made that it is London Breed’s power to change Question Time back to a format that allows debate and conversation between supervisors and the mayor! I hope she does.

    Sam is correct that in Great Britain the questions can be submitted ahead of time. But he is incorrect to imply that all questions or challenges must be submitted this way. The back and forth (and heckling) that occurs in parliament when the prime minister is answering questions occurs specifically because he or she is expected to depart from script, to be talking and not reading from a script. It works because it is an exchange, however hostile at times, not a lecture.

  21. Tim, even in the UK’s parliamentary question time, from where Daly stole the idea, the questions are submitted ahead of time. Its purpose is not to ambush our leader to to gain information.

    The biggest impediment to the 22nd street being re-built is the DBI building codes. Yes, the very same regulations that you claim to love. So if you have now come to realize what an obstacle they are to progress, then my work here has not been in vain.

    Airbnb do not own any properties, so your request that they house the homeless is ridiculous.

    Punish the rich by taxing them more? The richest 2% already pay over half of taxes. Or is that you won’t be happy until nobody is rich? The good news is that situation already exists – in Detroit. How is their lack of economic inequality working for them? Terribly – the city has filed for chapter none bankruptcy. Economic equality is much over-rated, and Clinton gets that.

    Zuckerberg gives the city 75 million and you carp about it. WTF?

    Oh, and the city cannot fully fund the retirement plan because that would require a massive increase in taxes. How about this for an idea? The city workers fund their own retirement like the rest of us do, instead of asking us to pay for both their retirement and our own?

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