We’re all part of a broken system that has spawned not only the current national houseless tragedy, but the long-standing drug addiction crisis. We need a new paradigm that recognizes the human potential that we’re losing as these issues fester. That new paradigm also has to include an honest appraisal of where we invest our money as a state and country. It will require that we reject the “scarcity mindset” that we’ve been trained to believe in.
If adequate mental health and/or addiction treatment options were readily available, some houseless problems probably could have been prevented. As a country, we spend twice as much on health care as any other developed nation. What exactly are we getting for all that money? Mental health is certainly one of the metrics where we fall devastatingly short. The Maine chapter of the American Medical Association recently released a policy statement calling for universal health care insurance coverage, acknowledging the deep inadequacy of a system that leaves thousands of Mainers without primary or specialist care or hospital care for serious illness without “taking on the risk of bankruptcy.”
Among the houseless people are the working poor who have been priced out of the housing market, in part because of our proclivity for building high-end condos and for creating a housing shortage by refusing even sensible development. According to an analysis by the Furman Center, there’s no evidence that multiple unit developments affect property values.
Maybe Gov. Healey of Massachusetts has the right idea in enforcing the MBTA Communities Act. The act required communities along the transit line to allow multi-family housing to be built in their communities. The governor warned communities that they must comply with the act or the state will withhold money “for any number of programs that you’re used to receiving money for,” such as schools and roads. The clear goal is to increase supply to bring down costs. Basic economics.
How can we possibly find the money to pay for housing and related costs to make up for the massive holes in our social safety net? We could start by closing the “tax gap” at the national level. That’s the difference between taxes owed and taxes collected. It currently amounts to around $600 billion annually and is projected to be $7 trillion in lost revenue over the next decade, according to an analysis by the U.S. Department of the Treasury. The IRS lacks the technology and manpower to correct this abomination.
Here’s what we do have money for though, according to Matthew Desmond, Princeton sociologist and Pulitzer Prize winning author of “Evicted” and author of the new book, “Poverty, By America,”: the mortgage interest deduction, even on second homes, with a $750,000 cap, often claimed for decades – a deduction that in 2020 cost the Treasury $193 billion, most of it going to people making six-figure incomes; 529 savings plans available to those with cash to set aside; and employer-sponsored health insurance, the cost of which is exempt from a corporation’s taxable income, thereby robbing the Treasury again of money to start stitching up that safety net. Then there’s government-subsidized retirement benefits. If you have money to invest, you avoid some taxes. Good for you! Bad for Treasury.
And the most egregious tax loophole of all: “carried interest,” a term coined, perhaps, because it’s just too embarrassing to admit these investment earnings are taxed at a lower rate than money earned through actual work.
And sure, you’ve worked hard for your money. But so have a lot of others who fall behind because of circumstances beyond their control. Both tax breaks and money devoted to the safety net boost household income. We have two systems of supports: one we call welfare and one we call tax breaks.
There is money enough to make sure every American has enough food, access to timely health care, with a focus on prevention, and a modest roof over his head. Those saying otherwise are either tragically misinformed or simply lying.
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