August 23, 2019 Breaking News, Latest News, and Videos

Newsom: Income Equality State’s Biggest Problem

More than a year before he won election as California’s next governor, Gov.-elect Gavin Newsom did not hesitate for a moment when asked what’s California’s biggest problem. “Income inquality,” he said in an interview then. He repeated that evaluation in subsequent sit-downs during the campaign.

“Take Los Angeles,” he said. “It’s America’s richest city, with Bel Air, Brentwood, Beverly Hills. But it’s also America’s poorest city, with South Central and more. The remarkable thing is they are only a few miles apart.”

Then he added that “You can’t live a good life in an unjust society.” And went on to quote the ancient Greek statesman and orator Pericles, who said, “The issue of wealth and income distribution is the oldest and most fatal of all issues in a republic.”

Newsom left no doubt about his deep conviction on this, despite his longstanding friendships with plutocrats like Gordon Getty. He offered some immediate ideas on how to ease situations where families with annual incomes barely topping $20,000 per year live not far from others whose incomes are more than 100 times that.

During his campaign, Newsom pledged to hire a statewide director to coordinate services he hopes will treat each homeless person from a “whole person care” perspective. He promised to push for more affordable housing aiming to take homeless off the streets, but – mindful of controversies in places like Los Angeles, Orange County and San Francisco – will leave it up to local authorities to decide where that housing should go.

Newsom isn’t the first to note the inequality problem. California’s tax-collecting Franchise Tax Board has reported that in 2016, the top 1 percent in overall wealth received 23 percent of all income in the state, while the bottom 90 percent received 49.6 percent. White families on average earned more than 1.5 times what Latino and black families got. Even more startling are net-worth figures reported by the U.S. Census, which found white families in California had a net worth (assets minus debt and other liabilities) of $171,000, more than eight times the $20,700 belonging to the average Latino family and nearly 10 times the $17,600 of African-American families. Those numbers include home equity, value of vehicles, furniture and almost every other type of material goods.

There will be no immediate help from the federal government, either, on evening things out: President Trump’s tax “reform” bill of last year will benefit whites far more than Latinos or blacks, and the richer you already are, the more you stand to benefit.

So what can a new California governor do about this inequality, which grew more imbalanced than ever during Jerry Brown’s latest two terms as governor?

The California Budget Project (CBP) suggests starting with an estate tax (sometimes called a “death tax”), saying that “serves as a curb on dynastic wealth.” In short, if you’ve built a valuable business, you’d better pass it on to your kids before you die, if estate taxes rise precipitously, as they might with two-thirds Democratic majorities in both houses of the Legislature. But the Legislature and governor couldn’t act alone on this: It would need to be okayed by voters because the 1982 Proposition 6 repealed state inheritance taxes. It can only be reversed via another popular vote.

The CBP also suggests eliminating or cutting tax deductions that primarily benefit well-off homeowners, including deductions for mortgage interest and property taxes. Do that, of course, and the value of much California real estate would immediately fall, which would tend to even out the wealth held by whites, Latinos and blacks.

But that would surely spur a massive political backlash, so don’t bet on it happening soon.

Another way to boost low-wealth families is to expand child care and renters’ tax credits, which help the poor while not harming others. This one is the most likely of the CBP recommendations to become reality.

But one thing is for sure: Newsom will evaluate many proposed new laws that land on his desk from the perspective of what they’ll do to help alleviate income inequality and boost low-income families. Which will be a very different perspective than any recent governor has brought to the office.

Email Thomas Elias at [email protected] His book, “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” is now available in a soft cover fourth edition. For more Elias columns, go to www.californiafocus.net

Related Posts

The Myth of “Public” Art in Santa Monica

February 8, 2019

February 8, 2019

Over the past few years, the Stanton MacDonald Wright murals at the entrance to Santa Monica City Hall have stirred...

Beausoleil: First Parole Test for Newsom

February 10, 2019

February 10, 2019

Not many Californians under 60 can recall just who is the 71-year-old Bobby Beausoleil and what evils he did back...

Santa Monica and ‘Big One’ Preparedness

July 8, 2019

July 8, 2019

All it took was 10-20 seconds for the 1994 Northridge earthquake to rattle Southern California in a way no earthquake had done before. Dozens of people lost their lives and thousands more were injured as the state reeled from a catastrophic event that cost billions in damages

AI in the Year 2020… Almost

February 11, 2019

February 11, 2019

By Nektar Baziotis In 1966 Gene Rodenberry’s “Star Trek” made its television debut on NBC. Audiences young and old were captivated...

Is Santa Monica’s Heart for Sale?

February 15, 2019

February 15, 2019

Note from SMa.r.t.: This article, in a longer form, was originally published four years ago but is still as pertinent...

Column: Adapting to Westside Vacancies

February 18, 2019

February 18, 2019

By Avi Sinai We all see the vacant storefronts around the Westside and it begs the question – why are...

SMa.r.t. Column: Gridlocked Best Intentions

February 22, 2019

February 22, 2019

On any given evening (and especially weekends) pay a visit to north-bound 2nd Street between Broadway Avenue and Santa Monica...

No Excuses: Stop the Crime Wave

March 1, 2019

March 1, 2019

My mother turned 91 last Saturday. Happy Birthday, Mom! She has walked the streets of Santa Monica her whole life...

Column: Can we Solve Westside Traffic with more Housing Development?

March 5, 2019

March 5, 2019

About the author: Avi Sinai is the principal of HM Capital, a Los Angeles company specializes in hard money real...

Open Space… Is There Any Left?

March 9, 2019

March 9, 2019

Yes there is. Small as it is, there is about 2.5 acres in the heart of downtown waiting to be...

Letter to Editor: Former Mayor on Voting Rights Case

March 13, 2019

March 13, 2019

By Paul Rosenstein Former Mayor of Santa Monica I hope the judge’s order for district elections is stayed during the...

Ban of Fur Trapping Passes Key Hurdle in State Legislature

March 17, 2019

March 17, 2019

By Staff Writer  Assembly Bill 273, the Wildlife Protection Act of 2019, which would end the commercial fur trapping industry...

Brock on Your Block: Ernest Marquez

March 15, 2019

March 15, 2019

By Phil Brock  In the latest Brock on Your Block, Phil Brock sits down with Ernest Marquez, a virtual treasure-trove...

Thanks, Village of Field Warriors

March 15, 2019

March 15, 2019

That huge gust of wind you felt one rainy afternoon last week wasn’t a gust of wind at all. It...

I Eat, Therefore I Risk:

June 24, 2010

June 24, 2010

Let’s start with the water bottle. Because that’s just such a strange modern mentality to begin with… the notion that...