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Friends in Service Helping: Great Service to the Needy

6/22/2021

Our family has enthusiastically supported FISH (Friends in Service Helping) since coming to Nevada in 2001. It is northern and western Nevada’s all-purpose “hand up, not a handout” that helps folks turn their lives around.
Recently, FISH published anonymously a letter from a former client. With permission, I reprint parts of it here.
“When I first came to FISH in 2019 needing help, I didn’t really even know what I needed. I had been chronically homeless for about 15 of the past 20 years. Always dwelling in cars, which led to a false sense of security. Or maybe it was a ‘new normal’ that became so etched in my being that I thought I had become free of needing four walls and a door. Living in a car felt normal at that point.
“But I was running out of roads with shrinking options. My health had deteriorated severely to where even a minor infection became a big deal. The only food I could chew and digest was expensive proteins, and I couldn’t afford it because I was putting every dime into my dying car.
Mostly, FISH offered me solace from the streets. It wasn’t a place to ‘hang out’ but it was a place where I didn’t have to pretend to be someone I’m not – [a place] without judgment.
“They fed me, gave me a place to wash my clothes and take a shower, and offered baby wipes for those times when I needed to clean up but was too far away or unable to get to FISH. They gave me referrals for other assistance that mostly didn’t work for me because (unbelievably) my SSDI income was too high to qualify for any other assistance. I was trying to get out of the maze, and the sustenance FISH offered helped me stay hopeful and prepared me to meet the change I was looking for. (…)
“In January of 2020, we all had a new challenge in our lives, called COVID. … I came to FISH where I think I saw Becca there again, who said again I should seek help from Curtis Butler at the VSO. … [H]e told me he could at least get me a motel room for a couple of weeks. (…)
“Two weeks felt like an eternity to stay sheltered in a motel. I had finally received a section 8 voucher (13 years after first making applications) on March 2nd, but there were no apartment vacancies (…)
“I remember all of these ‘lasts’. Last food bag at FISH, last shower, last good home-cooked meal, last conversations with people who were trying to help instill HOPE in me that change was coming. But all I saw were dead ends, everywhere.
“Yet, I know that as futile as the situation seemed to me, I was at a starting point. I know most homeless people were realizing they were situated to die in a pandemic, due to being unhoused. I’m not so special to think that I deserved to be spared from it. I think if I had never gone to FISH looking for assistance, I could have easily ended up using a grocery cart to transport my belongings after losing my car, and sleeping on the streets – where so many ‘yets’ were waiting for me.
“I found an apartment that would accept my voucher, and Curtis paid for the security deposit.
“Now, I am fortunate to be able to donate some resources back to FISH. It will never match what I received there.
“FISH helped me keep looking for ways out of the rat maze. … I was looking for a way out, and the route is a different way for everyone. FISH doesn’t use a cookie-cutter approach to the clients. They recognize every person is a unique individual. If I am your only success story, then you have solid proof that what you are doing is heading in the right direction.
“My story is just one of thousands. I’m a success story because you left the door open. And inside the door, compassionate care is delivered every day to many untold storytellers.”
People seeking a good use of their time, talents and treasure should contact FISH.
Ron Knecht is a Senior Policy Fellow at the Nevada Policy Research Institute. Previously, he served Nevadans as State Controller, a higher education Regent, Senior Economist, college teacher and Assemblyman. Contact him at RonKnecht@aol.com.
Ron Knecht

775-882-2935
775-220-6128

www.RonKnecht.net

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ProPublica, NYT & Other Leftists’ Ignorance on Taxes

6/15/2021

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“A jaw-dropping report by ProPublica detailing how America’s richest men avoided paying taxes has intensified interest in Congress, even among some Republicans, in changing the tax code to that ensure people like Jeff Bezos and Warren Buffet pay their fair share.” – a June 9 New York Times (NYT) headline.
The only thing jaw-dropping about the report and its fawning coverage by the NYT and other lamestream media is how completely ignorant, dishonest, envious, avaricious and wantonly destructive of human wellbeing and flourishing their proposals would be.
The extreme left-wing ProPublica advocacy group evaluated the federal income tax as if it were a wealth tax, a very different animal with very different consequences, including destruction of any economy and society unless the wealth tax rate were very low.
The report evaluates selected results of our income tax in wealth-tax terms. But it doesn’t even attempt to justify this bait-and-switch fraud, proceeding as if a wealth tax – their “true tax rate” – is self-evidently fair and in the public interest, while it certainly is neither.
In a future column, I’ll address some misinformation and chicanery involved, such as:
·       The report is based on leaked confidential Internal Revenue Service data on 15 years of tax data on thousands of people. ProPublica is not legally entitled to such data, and it did not disclose its sources.
·       It studiously ignores key points such as: the top half of taxpayers by income paid 97 percent of income-tax revenues in the most recent year for which data are available. The bottom half paid three percent.
·       The top one percent of earners paid 38.5 percent of income taxes while the bottom 90 percent paid only 29.9 percent.
·       And the top one percent also paid a 26.8 percent average individual income-tax rate, more than six times higher than the four percent for taxpayers in the bottom 50 percent.
Here, I’ll address the misrepresentations about wealth taxes advocated by ProPublica and the media. I carry no brief for the 25 rich people in their report, just one for the public interest in economic growth (aggregate human wellbeing) and fairness.
I first understood this matter 50 years ago as an Assistant City Engineer in Urbana, Illinois. The lesson came courtesy of the crotchety old Public Works Director who was a Republican, while I was an ignorant statist liberal progressive Democrat.
I advocated the kind of income and wealth redistribution nonsense ProPublica and the media now promote. He pointed out simply that if people had roughly equal income and wealth levels, it would make significant investment in major enterprises (a/k/a “capital formation”) impossible.
Thus, if everyone had roughly $70,000 in annual income (the U.S. gross domestic product divided by our population), no entrepreneur could raise in reasonable time and cost the billions of dollars required for an electric vehicle industry. Nor wind and solar energy sources. Nor for high-speed rail or concert hall projects.
Government financing of such projects is even more ridiculous, as shown by the cost and schedule overruns and poor performance of water projects, bridges to nowhere and crosstown highways.
The day of the NYT report, an editorial cartoon ran showing spaceships launched from earth bearing the Bezos and Musk names. Space aliens watching from a flying saucer comment: “The male earthlings are overcompensating again.” The irony is that capital formation has allowed these entrepreneurs to restart space travel after the government recently proved its ineptitude at that venture.
Fairness?
ProPublica and the media either don’t understand or cynically deny that in a mostly market economy, people get income and accumulate wealth generally in proportion to the value they deliver to other folks, and thus in proportion to their contribution to society and the public interest. That essential fairness is not found in redistribution and government provision.
Also, wealth taxes would require people with unrealized capital gains (much of the wealth of the 25) to either sell stock, driving down the value of enterprises, or borrow large sums. Also, if wealth were taxed, would immense capital losses such as those not infrequently incurred require the government to pay tax rebates to those suffering the losses?
The income tax is destructive enough. Similar revenues from wealth taxes would be disastrous.
Ron Knecht is a Senior Policy Fellow at the Nevada Policy Research Institute. Previously, he served Nevadans as State Controller, a higher education Regent, Senior Economist, college teacher and legislator. Contact him at RonKnecht@aol.com.
Ron Knecht

775-882-2935
775-220-6128

www.RonKnecht.net

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The Federal Budget: Spending, Taxes, Deficit & Debt

6/1/2021

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President Joe Biden released his record-setting proposed budget last week. Here I’ll try to describe the particulars in terms of the basics: spending, taxes, deficits and debt, all relative to the total economy as measured by the gross domestic product (GDP).
Biden’s proposed fiscal year 2022 (FY22) federal spending total is $6-trillion, or $2-trillion more than in FY19. FY19 figures serve as reference points because the COVID pandemic greatly distorted the FY20 and FY21 (current year) figures.
The $6-trillion spending total for FY22 would be 25.4 percent of projected GDP of $23.6-trillion. His budget projects total federal spending will remain at nearly 25 percent for the rest of this decade.
The average since World War II and before the pandemic was 19.4 percent, and no single year in that period reached 25 percent. Our economy is growing faster now than in recent years as people and businesses emerge from the shutdowns ordered by governments the last 15 months. So, instead of increasing spending relative to the GDP, we should be reining it in, according to Keynesian orthodoxy.
Under Biden’s budget, federal spending would exceed $45,000 per household next year. And more spending proposals are expected later.
The largest part of the spending is “transfer payments”, the income and other support paid by government to people and businesses. This share of federal spending has risen from 27.7 percent in FY64 when President Lyndon Johnson launched his Great Society programs to 70 percent in FY19. It is the tail that wags the dog, because these mandatory programs are on auto-pilot and do not require annual Congressional appropriations.
The remaining spending, $1.52-trillion for FY22, is called “discretionary” and includes $770-billion in defense and homeland security spending, an increase of 1.5 percent from FY19, or a net decline in real terms because inflation is expected to be 2 percent. The $770-billion is less than 3.3 percent of expected GDP. Defense spending relative to the total budget has shrunk from 46.2 percent in FY64 to 15.4 percent in FY19.
Other large discretionary spending items would get increases of 23.4 percent (Health and Human Services), 40.8 percent (Education) and 15.2 percent (Housing and Urban Development).
To finance all this spending, Biden proposes $3-trillion in tax increases over this decade, the largest tax hike relative to GDP since 1968. His tax increases would undo the 2017 tax reform that lifted business investment and increased wages, especially for lower earners. They would also hobble the supply side of the economy as it tries to meet the post-pandemic demand growth.
Biden proposes to retroactively raise long-term capital gains taxes to 43.4 percent, a modern high. And to raise the corporate rate from 21 percent to 28 percent. He would hike the top marginal rate for individuals from 37 percent to 39.6 percent.
Progressives have made many proposals to soak the rich and corporations. Even if they did not destroy the economy – and they would – the sum of all of them would not cover the projected $1.8-trillion FY22 deficit, or 7.6 percent of the economy. So, taxing the middle class, which is where the money is, would be necessary, contrary to Biden’s election pledge and his continuing insistence it won’t happen.
The increasing recent deficits and those proposed by Biden are driving our publicly held national debt from high levels in 2019 past dangerous levels now and toward catastrophic levels later this decade. At 79.2 percent in 2019, the debt was increasing toward the 90 percent figure that major economic research has found to be the danger zone. This year it is estimated to rise to 109.7 percent, and Biden’s proposals would hike it to 117 percent by 2031.
The $44-trillion debt in ten years would be more than $300,000 per household.
The budget document estimates that annual interest payments on the debt will more than double by this decade’s end. But it assumes the Federal Reserve won’t raise interest rates much from the record low levels to which it has held them in recent years. Further, it assumes America’s creditors will be satisfied with current federal interest rates, despite inflation and financial risk from higher spending, taxes, deficits and debt.
Biden’s budget would be a disaster for America.
Ron Knecht, MS, JD & PE(CA), is a Senior Policy Fellow at the Nevada Policy Research Institute. He has served Nevadans as State Controller, a higher education Regent, Senior Economist, college teacher and legislator. Contact him at RonKnecht@aol.com.
Ron Knecht

775-882-2935
775-220-6128

www.RonKnecht.net

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Friends in Service Helping: Great Service to the Needy

ProPublica, NYT & Other Leftists’ Ignorance on Taxes

The Federal Budget: Spending, Taxes, Deficit & Debt

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