Newsom’s latest attack on the unhoused is brutal, cruel—and a political fail

The Gavin Newsom for President Campaign just took another step toward portraying the governor as a tough-on-crime leader who hates homeless people—a model that got him elected mayor years ago.

Newsom just issued, to much media fanfare, a plan to encourage cities to crack down on homeless encampments. It’s as pointless as it is cruel: Without massive state spending on affordable housing (not just temporary shelter) the problem isn’t going to vanish. Instead, we’re going to see more of what we’re already seeing in San Francisco: Moving people with mental health and substance use issues from the streets into the jails.

Let’s just look at the cold numbers here. It costs the city about $250 a day, on average, to keep someone in the county jail. That number is going up rapidly as the Sheriff’s Office increasingly relies on expensive overtime to meet the demands of an overcrowded system.

That’s about $7,500 a month, or $90,000 a year.

In-patient drug and alcohol treatment can cost twice that much.

Putting someone in a stable housing situation is far, far cheaper. That’s the whole idea of “housing first,” which was the official policy of the city, the state, and the federal government until the current Trump Administration. It’s hard for anyone to address their substance use and mental-health issues if they’re living on the streets (and if they enter a residential treatment program and have no place but the streets to return to when they complete the program).

But Newsom doesn’t seem to care about fact, science, or data anymore: It’s all about trying to avoid the perception that he’s the governor of a state that isn’t dealing with homelessness.

When Newsom was running for mayor, he used a program called “Care Not Cash” as a platform—the idea was to cut welfare payments and use that money to force people into treatment or crappy housing. It failed as a policy; it worked as a political tool. I hate to exaggerate, because Trump is an entirely different type of politician, but the idea of blaming the most vulnerable—immigrants, the unhoused—for political purposes is becoming disgracefully popular, and Newsom is now a part of it.

What he’s not doing—something that might actually make him a credible national candidate—is talking about the economic inequality that has created the housing crisis and that helped Trump get elected.

California, San Francisco, Oakland, and so many other Democratic states and cities are facing massive cuts in federal spending to fund Trump’s agenda of cutting taxes on the very rich. School districts are facing austerity. Public services are getting axed. There’s no money for anything anymore, except the cops.

But there’s lots of money at the top. Lots of billionaires and centimillionaires in California are going to benefit from the Trump tax cuts.

All over the country, Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez are filling massive rallies with people who are sick of the oligarchy. That message seems to resonate among both Democrats and Republicans, young people and older people, the working class and college graduates.

Sanders isn’t running for president again. AOC probably needs more time and experience. If the Democrats nominate someone who seems to be friendly with and part of the oligarchy, they will lose.

How about instead of attacking the unhoused, Newsom were to say:

In California, we reject the Trump efforts to enrich the few and impoverish the many. We are going to change the tax code to increase income taxes, and impose wealth taxes, on those state residents who are benefitting from the Trump tax cuts, to recapture some of that money.

We will use the billions of dollars to fund a massive program to construct social housing, putting tens of thousands of people to work in good union jobs and addressing the crisis of homelessness where it starts.

We will encourage solutions that allow the unhoused to build their own communities, since that seems to work.

And then … all the billionaires will leave California and move to Texas, right?

Except the data shows they won’t. In fact, a really important new study from the Institute for Policy Studies shows that in states where the very rich have to pay higher taxes, rich people still keep getting richer.

These current levels of economic disparity and tax regression are both unsustainable and harmful to society. Many studies show that lowering the marginal tax rates for those at the top of the income distribution does not lead to more economic growth or the creation of good paying jobs. If anything, it squeezes the living standards of working families and deprives state governments of the revenue it needs to deliver essential public goods and services.

Progressive taxation and a wealth tax on the ultrarich are both effective policy tools that can help reverse inequality and ensure that communities have the health care, schools, and infrastructure they need to thrive. New data produced and analyzed by the Institute for Policy Studies and the State Revenue Alliance show that Massachusetts and Washington State have seen tremendous growth in the number of people with more than $1 million in total wealth since raising taxes on higher earners. The revenue generated from these tax payments exceeded expectations and is helping fund essential programs that expand economic opportunity for all.

Specifically:

• The number of wealthy individuals and their cumulative wealth grew after the enactment of higher taxes on high earners in Massachusetts and a progressive capital gains tax on high-wealth Washingtonians.
• Progressive taxation on million-dollar incomes in Massachusetts and capital gains in Washington succeeded in collecting additional revenue.
• A wealth tax that targets ultra-high net worth individuals – those with $50 million or more – puts a minor constraint on their rate of accumulation, but has the potential to raise significant revenues that can be used to support broad healthcare, economic, and educational programs that benefit all state residents.

Let’s look at Massachusetts:

Massachusetts serves a model for states interested in progressive taxation.

In November of 2022, the Massachusetts electorate voted to amend its state constitution to adopt a 4 percent surtax on all income above one million dollars. The purpose of the surtax proposal, known as the Fair Share Amendment, is to provide the state with extra revenue to help fund education and public transportation. Opponents of the surtax warned of an imminent exodus of Bay State millionaires to friendlier tax jurisdictions and the subsequent shrinking of the Massachusetts tax base.

The academic literature, however, does not support many of the assertions of the anti-tax movement. Research shows that high net worth individuals tend to be less mobile and exhibit lower rates of migration compared to the general public. Their family, business, and social networks deeply root them to amenity rich locales, thus higher income taxes do not compel the overwhelming majority of millionaires to move across state lines.

It is two years into the progressive taxation experiment in Massachusetts, and the evidence supports the academic literature and pro-surtax policy arguments. The revenue collected from the surtax has exceeded expectations: in the fiscal year of 2024, it raised close to $2.2 billion, almost a billion dollars more than what was originally projected. And in the first three-quarters of the current budget year, the Massachusetts Department of Revenue reported that it is $786 million above its benchmark with the millionaires’ surtax being responsible for a “significant portion” of the surplus. This additional revenue is being put towards university scholarships, school meals for young children, and necessary road and rail system repairs.

Data from the IRS’ Statistics of Income program demonstrate that the number of tax returns that reported an adjusted gross income (AGI) of a million dollars or more in Massachusetts has grown by 36 percent between 2018 and 2022 – from 20k to 27k.

More:

The success of Massachusetts and Washington in expanding their state’s coffers with new revenue stands in stark contrast to the failure of supply-side economics in Kansas. In 2012, Republican Governor Sam Brownback instituted one of the largest tax cuts in Kansas history. The tax reform bill, designed with the help of economist Arthur Laffer, was justified under the pretense that it would stimulate growth and be revenue neutral. However, the conservative experiment failed to achieve all of its stated objectives, and five years later, the Kansas state legislature reversed Brownback’s tax cuts because the cuts failed to stimulate private sector job growth, the Kansan economy lagged, and the cuts led to harmful and continuous revenue shortfalls.

Mark Zuckerberg will still be very rich, and will be getting richer, even if the state raises his income taxes and imposes a wealth tax. Since I’m a fan of Thomas Piketty, I would argue that those taxes are clearly still too low, since addressing economic inequality means bringing the top down as well as bringing the bottom up.

But hey, Gav: You don’t even have to address that. You can solve the housing crisis, fund public education and public health, and make yourself look like a serious candidate for president by taking on the very rich.

Or, you can attack the unhoused.

Care Not Cash got you elected mayor of San Francisco. Today, I think your approach pretty much guarantees you will have a long retirement and no political future.