silicon valley

How the Swindlers of Silicon Valley Avoid Paying Taxes

Published by Anonymous (not verified) on Fri, 20/10/2017 - 3:01am in

This post originally appeared at The Nation.

The sleeper issue in Donald Trump’s tax-cutting agenda is a potential bombshell called the “territorial tax system.” It doesn’t get the headlines, or even much political discussion, so the public is clueless. The industrial titans of Silicon Valley like it like that. Their proposal would fundamentally alter the taxation of US multinational corporations, and beneficiaries would include celebrated brand names like Google, Microsoft and Apple.

Those tech giants and other globalized companies have been after Congress for years to make the switch to “territorial.” But corporate execs are not making their campaign noisy, because their so-called “tax reform” would be a dead turkey if citizens understood the threatening implications.

RELATED: Democracy & Government

A staff member sets the stage before a news conference where Republican lawmakers announced their plans for tax reform on Sept. 27, 2017 in Washington, DC. (Photo by Drew Angerer/Getty Images)

Hacking Trump’s Tax Plan

BY Sarah Jaffe | October 5, 2017

That seems unlikely. The big names of information technology are popular companies and, yes, global trade is complicated stuff, hard to explain in a few sentences. Scores of independent watchdogs — citizen organizations like Tax Analysts and Americans for Fair Taxation — are sounding the alarm and lobbying members of Congress. But it’s an uphill struggle, especially since the Democratic Party has not tried to alert voters and mobilize public opposition.

In my experience, this is how American democracy frequently fails its promise. Politicians privately blame people for indifference; I mostly blame politicians for ducking their obligations. In my decades as a political reporter, I have found that people of ordinary intelligence can usually see through the corporate smoke and understand complex issues if the pols explain things with plainspoken clarity.

Political parties used to be personal teachers, going door to door in neighborhoods, listening to gripes and opinions, plugging the party line and ticket. In modern politics, cynical candidates needn’t bother. They can parrot what the pollsters tell them people want to hear. I prefer politicians who tell people what they need to know.

So here are critical points about the “territorial” tax system people need to understand but corporate advocates won’t mention: If the scheme is passed, American companies with operations dispersed globally would pay US taxes only on the profits earned within the territory of the United States. In the current system, Washington attempts to tax multinationals on their worldwide earnings but fails miserably because the corporations have figured out fiendishly complicated ways to hide their profits in low-tax foreign countries. (That speaks to a separate but related item on the multinationals’ current wish list for tax reform: “forgiveness” for the roughly $600 billion in profits they would owe once they repatriate those profits, an issue I have addressed previously in this column.)

RELATED: Economy & Work

New Yorkers and visiting demonstrators protest during a march on Tax Day demanding that President Donald Trump release his tax returns in New York City on April 15, 2017. (Photo via EuropaNewswire/Gado/Getty Images)

The GOP Tax Plan is What We Knew it Would Be — Tax Cuts for the Rich

BY Josh Bivens and Hunter Blair | September 28, 2017

At first glance, the territorial approach sounds vaguely patriotic — an “America first” approach to the taxation of US multinational corporations. In reality, this new system would be more like the “Get Out of Jail Free” cards in the game of Monopoly. The legislation would allow an ingenious scam, in which America’s celebrated high-tech champions would be rewarded for abandoning the mother country if they decide the price is right.

The Institute on Taxation and Economic Policy (ITEP), a nonpartisan organization, has warned, “Corporations would have even greater incentives to engage in accounting gimmicks to make their US profits appear to be earned in offshore tax havens such as Bermuda and the Cayman Islands, where corporate profits are not taxed.”

The logic for companies is not complicated. Silicon Valley and other sectors like the drug industry are notorious for dodging US taxes. A basic technique involves assigning the supposed “ownership” of a company’s profit-making functions to affiliates in cooperating foreign nations. This works especially well for intangible assets like intellectual property — drug patents or hard-to-value high-tech innovations. The process reeks of fraud, but government enforcement has either been intimidated or overwhelmed by the volume of fictitious deals. The new territorial system does not in theory prohibit these fraudulent corporate arrangements with foreign countries; it merely ends Washington’s failed attempts to collect the taxes.

The examples of US companies doing fraudulent deals or ignoring the rules are so numerous they seem like business as usual. Bermuda, for instance, has a GDP of only $5.5 billion, but Fortune 500 companies claimed, in the most recent year for which statistics are available, that they harvested a total of $104 billion in profits from Bermuda. The European Union’s antitrust commissioner accuses Apple of funneling $15.2 billion in profits from two Irish subsidiaries to an unnamed office that had “no employees, no premises, no real activities.” And the commissioner has accused Amazon of an illegitimate tax agreement with Luxembourg, ordering that country to collect $293 million in unpaid taxes from the American retailer.

RELATED: Economy & Work

Representatives of progressive political activist groups join members of the Congressional Progressive Caucus for a news conference outside the US Capitol in Washington, DC, on Oct. 4, 2017. (Photo by Chip Somodevilla/Getty Images)

Robert Reich: Five Reasons the GOP Tax Plan Is a Cruel Joke

BY Robert Reich | October 11, 2017

2017 policy paper from the Urban Institute, citing scholarly sources, traced the twists and turns of a single tax evasion without naming the company or its invention. Here’s how an American company hides its profits from the US tax collector:

Suppose a US high-tech company patents a new product and sells the patents to its Irish affiliate. If the product is not yet being marketed, the value of its patents is difficult to ascertain. The US parent company charges its Irish affiliate a low price, minimizing its taxable income from developing the new product. Once the product’s success is established, the Irish company can then charge a high royalty to a contract manufacturer in China, causing a large share of the profits of the corporate group to be reported to Ireland, with a 12.5 percent [tax] rate. Further techniques then can be used to shift the reported profit from Ireland to a subsidiary in the Cayman Islands or Bermuda, eliminating even the low Irish tax.

Warning to Nation readers: Do not try to use any of these maneuvers on your personal income tax. You might go to jail.

Would Trump’s version of territorial taxation stop US corporations from using these accounting tricks? Critics say of course not. We don’t know the official answer at this point, because private negotiations are still under way between the high-tech industry and congressional Republicans. Trump has allegedly left the details to Congress, but who knows whether that’s true.

Martin Lobel, a Washington lawyer who chairs the group Tax Analysts, said it is inconceivable that the GOP would shut down these tax gimmicks so favorable to big business. “There are no such things as ‘American multinationals,’” Lobel said. “These corporations are called multinationals for a reason. They will invest wherever they can make the most profit. If the tax code allows them to make more profits offshore, that is where they will invest, despite the millions of dollars of subsidies our tax code gives them.”

RELATED: Economy & Work

Traders on the floor of the New York Stock Exchange (NYSE) on Jan. 20, 2016. (Photo by Michael Nagle/Bloomberg via Getty Images)

A Tax on Wall Street Trading is the Best Solution to Income Inequality

BY Dean Baker | June 1, 2017

Lobel and other opponents of the territorial scheme point out that tax-dodging by multinationals injures Americans in broader ways. As ITEP explained: “The ability to avoid US taxes entirely on profits on foreign operations, rather than simply deferring taxes on those profits, would provide a strong incentive to locate real investment overseas rather than in the United States. Less investment in the United States would put downward pressure on the wages of American workers.”

The outcome of Trump’s tax-cutting agenda is imperiled because of the political chaos the president has inspired. Recode, an informed website that covers Silicon Valley, reports that the Information Technology Industry Council, which represents Apple, Google, Microsoft and others in Washington politics, supports the goal of a territorial system but has withheld endorsement because it isn’t satisfied with the details. In other words, the lobbyists are working the squeeze play that powerful interests typically apply at this stage of legislative debates.

It would help if the Democratic Party made some noise and raised some of the obvious arguments against shifting to territorial taxation. “If territorial becomes a public issue, Democrats will be against it,” Lobel predicted, “because Democrats represent small business and small business gets screwed by this, since they don’t get any benefits and it puts them at competitive disadvantage by the big multinationals.”

Reformers like Lobel suggest there is a plausible remedy for America’s confused tax system. Washington legislators could follow the model of a unitary system like the one California uses for its state taxes: It determines the tax liability by calculating a company’s profit in the state based on its sales, personnel and property — the same elements that businesses use in their investment decisions.

Lobel is not confident the public would rebel against the territorial system if the Democrats decline to take the lead. Party leaders are shy for the usual reasons: They are divided among themselves. Some of their best friends — and donors — are Silicon Valley billionaires, who generously support progressive social values and provide sustaining contributions to affiliated liberal organizations like the Center for American Progress.

Reforming and taxing multinationals is a divisive matter for Democratic leaders and other influential elites — though not for rank-and-file Democrats, who are overwhelmingly in favor of raising taxes on both multinationals and wealthy individuals. The passive silence at the top of the party and the boiling disappointment down below may be seen as a leading indicator of the party’s troubled future.

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Rise of the Brobots

Published by Anonymous (not verified) on Fri, 06/10/2017 - 5:15pm in

Some men are reacting to the “women in tech” movement by complaining that a “feminist cabal” is trying to subjugate men.

Trump Disrupts the Valley

Published by Anonymous (not verified) on Mon, 02/10/2017 - 3:00pm in

Why the titans of Silicon Valley—long tied to the Democrats—have been warming up to Trumpism.

Important Lessons From Orwell and Churchill for Resisting Authoritarian Rule in Trump’s America

Published by Anonymous (not verified) on Thu, 28/09/2017 - 4:35am in

This post first appeared at AlterNet.

Donald Trump’s reactionary presidency and Silicon Valley’s spying on online users is pushing the nation and world in dangerous directions comparable to past eras, during which authoritarian rule and totalitarian belief held sway. A handful of writers have urged Americans to heed history’s lessons on resisting tyranny in all of its forms.

One of the most recent is Thomas Ricks, who for the past two decades has been among the most prominent journalists covering the military and war. His newest book compares and contrasts Winston Churchill and George Orwell, tracing how both came to recognize and resist abuses of power and political propaganda to side with individual dignity.

AlterNet’s Steven Rosenfeld interviewed Ricks, who recounted those lessons and their critical relevance today in an era dominated by fake news politics and predatory high-tech.



Steven Rosenfeld: Your book, Churchill and Orwell: The Fight for Freedom, is remarkable in many ways. You tell how both men shaped the 20th century and remain relevant. You describe how they evolved, held their own against their day’s political conformists and ideologues, both left and right; and how they came to understand how authoritarian and totalitarian regimes operate.

The takeaways are resonate today, whether we’re talking about an executive branch that lies, erases and revises history, or the tech sector that spies on citizens and sells its files. What prompted these men, especially Orwell, to reject herd mentalities in private and in public?

Thomas Ricks: Oddly enough, I suspect for Orwell, it began with his love of personal observation. Even as a child, he loved observing nature, and that continued throughout his life. If you read his diaries, he had a habit of just writing down what he physically sees around him, what he’s thinking about, what he’s hearing people talk about — just basic observation. I think for Orwell, that becomes a point of departure — that human freedom begins with the right to perceive and to trust your own perceptions.

Of course, Orwell as an adult bangs up against Stalinism, which says, “No, we will tell you what to think. If you’re a good member of the Communist Party, you will believe what we tell you to think. We will decide what is right and what is wrong. We will decide what the facts of the matter are.”

That’s where Orwell breaks with Stalinism, but he doesn’t break with the left. He remains a socialist all his life.

SR: That’s what’s so interesting about this, at least in more recent modern America. The political right has lionized Orwell, and not the left, which you point out.

That’s one thing I was trying to do in this book — to kind of recover both these guys for liberalism, and even progressivism. Churchill was not always a conservative, and Orwell was always the socialist. Yet both have been claimed by the American right, in ways that I dislike.

— Thomas Ricks

TR: That’s one thing I was trying to do in this book — to kind of recover both these guys for liberalism, and even progressivism. Churchill was not always a conservative, and Orwell was always the socialist. Yet both have been claimed by the American right, in ways that I dislike. I was trying to say [that] Churchill is a more complex political figure than he’s seen as today, and Orwell should be seen properly as a member of the left throughout his life — delivering a leftist critique of Western capitalist democratic society all his life.

SR: When you say you want to recover their legacy for liberalism, what you’re talking about is they both, and particularly Orwell, rejected political ideologues of their day based on personal experience. They came to understand how authoritarian and totalitarian systems work, and how propaganda works. Can you describe that arc?

TR: Sure. Orwell goes into the 1930s a pretty typical leftist of his time. He believes left is good, right is bad. So socialism and communism are good, and capitalism and fascism, bad. Then he goes to Spain late in 1936. There, he has the great political education of his life. He is a member of a small political splinter group fighting in the Spanish Civil War — anarchist Trotskyites. They are part of the left, but they are not mainstream left in Spain.

Now the problem was [that] at the time, Stalin of Russia could not stand the idea of a competing leader of world communism. With Trotsky having been a comrade of Stalin’s, and then [having] fled Russia, what was coming? So the first enemy of Stalin was non-Stalinists on the left — these are the people he really went after. As the Soviet Union became more and more influential in the Spanish Civil War, one of the things it did was use its security apparatus, the NKVD, the predecessor of the KGB. The NKVD runs the security forces, the police and the secret police of the Spanish Republic, the left-wing government. It goes after the non-Stalinist parts of the left in Spain.

A page from George Orwell's 1984. (Photo by Jason Ilagan/ flickr CC 2.0)

Our President Is Up to No Good

BY Bill Moyers and Henry Giroux | March 4, 2017

Orwell is up fighting on the front against the nationalist-fascists. Then he comes back to Barcelona on leave in May 1937 to see his wife, who was working in Barcelona, and is shocked to find himself getting involved in street fighting with the republican government attacking its own people, his little faction. Then he goes back to the front, fights the fascists and nationalists again, and is shot through the neck. To his amazement, he doesn’t die. The bullet misses the artery, the windpipe and the spine, which is kind of a miraculous thing to have happen. He flees Spain. He doesn’t know it at the time. We know actually, he and his wife were both indicted right about the time they left, by the republican government for treason and Trotskyite deviationism.

He flees Spain, goes home to England, and sits down and reads all the newspapers and all their coverage of the Spanish Civil War. He reads the right-wing newspaper. He’s not surprised they’re lying about what’s going on. But then he picks up the left-wing newspapers, reads all their coverage of the war over the last six months, and he’s shocked to find they’re lying too. He comes away from Spain, and the experience of seeing friends of his killed by a left-wing government, thinking very differently about leftist politics. He decides that fascism and communism are actually pretty close together. They are different manifestations of the same thing. They are right-wing and left-wing manifestations of totalitarianism. He decides the key to freedom begins with personal liberty, with the right of the individual to proceed.


George Orwell

George Orwell and the Power of a Well-Placed Lie

BY Robert Kuttner | January 25, 2017

He has his hero in 1984, Winston, say at one point that, “Freedom is the freedom to say that two plus two make four.” Of course, that character in 1984, Winston, is tortured by the government until he sobs [and says] “hold up as many fingers as you like, and I’ll tell you whatever number that is. If you say it’s five fingers, I’ll say it’s five.” Then they say, “No, you don’t just say it, you have to believe it too.” And he was eventually tortured into that.

SR: Right. I’m looking at the front page of today’s New York Times, where it says, “GOP Senators Embrace Plan for Tax Cut that Adds to the Deficit.” It basically said they’re not going to pay attention to what nonpartisan economists say the impact will be. This is erasing the past, in Orwell’s terms, and—

TR: And it’s pissing all over today’s facts. It’s saying, We don’t care about the facts, we are going to let ideology dominate.

SR: Right, and that’s what’s so important about what you have written about, because what readers end up getting is a profile of Churchill, and more so with Orwell, of how an individual can react, and what journalists are supposed to do. Journalists are supposed to recognize the delusions public figures utter and expect people to believe and push back. Individuals are also supposed to ask questions, but it’s hard to break with herd mentalities.

In a really inflamed political situation, in a time of political turmoil, when political parties are changing rapidly, when there’s no solid political ground, when compromise is seen as betrayal, when you have a president who believes only in personal loyalty to himself but doesn’t give it back, by the way — when you have that kind of situation, people who insist on the facts become the enemies of many other people.

— Thomas Ricks

TR: And when you do, you’re attacked for doing so. The basic job with journalism is the basic job of anyone of goodwill in a democratic society. It is to perceive the facts, and then act upon them. For the journalists, the act is to write about it. For other people, the act is to act upon them in some other way.

But in a really inflamed political situation, in a time of political turmoil, when political parties are changing rapidly, when there’s no solid political ground, when compromise is seen as betrayal, when you have a president who believes only in personal loyalty to himself but doesn’t give it back, by the way — when you have that kind of situation, people who insist on the facts become the enemies of many other people. It’s an uncomfortable position to be in sometimes. I’m not saying it’s comfortable.

One of the things that’s striking about Orwell and Churchill is both became deeply alienated from their own natural political allies. Churchill spent the 1930s insisting that Nazism is becoming stronger, is becoming a threat. That goes against the policy of his party and of his government, because his conservative party is running the government. For that, he is essentially sent into what he calls the political wilderness for the entire decade of the 1930s. He is shunned. He is mocked. He is seen as really a washed-up old politician who is really no longer relevant.

Orwell, likewise — having stood up and said, look, the left is not always telling the truth about what’s going on in Spain, and we need to be careful here — also ran into problems with his friends and political allies. Some friends told him he was terribly wrong. He actually found it very hard to get published. Animal Farm, his first classic novel, was turned down by multiple publishers. In fact, an official in the British government went to publishers in London and said, we don’t think you should publish this. Orwell didn’t know it at the time, but that official, Peter Smollett, turns out to have been working secretly for the Soviet Union.

SR: Yes. When I was reading this, I found it so resonant today, because we are in a media environment where we are deluged with more opinion than information. At the same time, you have the highest levels of government not earning the trust and allegiance of its citizens, but telling them to do what they’re told. How dangerous do you think this is?

TR: I think we are at an extremely dangerous political moment in American history. In many ways, while the international situation right now reminds me somewhat of the 1930s, the domestic situation in America reminds me a lot of the 1850s. That’s worrisome of course, because the 1850s were followed by the American Civil War.

I’ve actually had a series of conversations with some retired national security officials, some retired military officers, who are increasingly worried that we are heading for some kind of civil war in this country. Not necessarily a big military set piece battle with Gettysburg-type things, but some kind of chronic, sustained political violence — in which violence plays a large role in shaping politics, which was true, by the way, of the 1850s in America, especially in Kansas. But it was also true in the 1930s internationally. I think you could see this from the left as well as the right — chronic political violence, assassinations of judges, nullification juries, state government saying they won’t go along with the federal government. I’m worried that the left will play into this. For example, there’s nothing that the neo-right, the new right, strategists would like more.

It’s a hard time politically. People who insist on the facts are finding themselves unwelcome, even among their own parties, their own natural allies. I think we especially have to pay attention to people who are willing to call out their own sides.

— Thomas Ricks

It’s a hard time politically. People who insist on the facts are finding themselves unwelcome, even among their own parties, their own natural allies. I think we especially have to pay attention to people who are willing to call out their own sides. This is the commonality of Churchill and Orwell, but it’s also something you see today with American politics. People who really interest me a lot are the people on the left who are willing to criticize the left, and the people on the right who are willing to criticize the right.

The most interesting political commentary these days I find coming from anti-Trump conservatives, who tend to be classic conservatives. People who believe in rule of law, the Constitution, traditional values and basically American institutions: classic conservatism. Their critique of Trump is that he believes in none of those things. That he is against the rule of the law. He is ignorant of the Constitution, and he attacks institutions like the judiciary. These people say, Trump is not conservative; don’t call him a conservative, he’s a reactionary.

I’m not a conservative myself, and so I find that critique illuminating. It makes me understand Trump in a way I wouldn’t have otherwise. In fact, one of the gripes I have with American journalism these days, American political journalism, is that it keeps on referring to Trump as a conservative. I’m persuaded by reading these writers; a bunch of them at The Atlantic, like David Frum and Eliot Cohen. Some people at The Washington Post, like former Bush speech writer Michael Gerson. Jennifer Rubin, even Peggy Noonan of The Wall Street Journal sometimes, even Charles Krauthammer on Fox sometimes. These people have made it pretty clear that Trump is not a conservative, and I think it’s an error and professional misdeed for political journalists to present Trump as a conservative.

SR: The afterword in the book is almost written in an advisory way, as a swan song to people still practicing journalism. It talks about what’s happened to journalism through a set of lenses Orwell would appreciate — particularly what’s happened with Silicon Valley. Outside the executive branch, you have this giant technological apparatus that’s spying on everybody, creating profiles, selling those mostly to the private sector but also sharing them with governments, and people don’t seem to mind.

When you live in an oligarchy, you are going to have the means of information, as well as the means of production, in the hands of the rich and powerful, who will tell you not to believe your own perceptions. To trust them. So I go back to Orwell saying, you need to begin by trusting your own perceptions. But they can’t just be uninformed perceptions.

— Thomas Ricks

TR: No. It’s kind of shocking to me that the major product of Silicon Valley is you and me, the American individual — that they’re mining our lives, literally. I was kind of struck that Orwell as a writer went out and actually, in England, went down to the coal mines to write about the coal miners. What we need today is writers who go down into the mines of Silicon Valley, and write about how our lives are being excavated and exploited as resources by these big new companies; Google, Apple, Microsoft and a score of others.

SR: Having thought about this so much, what would be the takeaways you would want to impart to people who care about representative government, and care about informative media, and care leading their lives with a certain amount of privacy and dignity?

TR: My point of departure is: We no longer live in a democracy in America right now. I believe we live in an oligarchy. When you live in an oligarchy, you are going to have the means of information, as well as the means of production, in the hands of the rich and powerful, who will tell you not to believe your own perceptions. To trust them. So I go back to Orwell saying, you need to begin by trusting your own perceptions. But they can’t just be uninformed perceptions. Both Churchill and Orwell say you need to go and find the facts.

What I try to do in that afterword — which is kind of my journalistic last will and testament, and kind of a pep talk to people like you who are still slaving away in the salt mines of journalism — what I’m trying to do there is say, hang in there. The foundation of Western civilization is what you are doing. Seeking the facts, and observing accurately what is going on. This is why I ended the book by talking about Martin Luther King Jr. and his letter from the Birmingham City Jail, written in 1963. It’s an odd place to go in the book about two Englishmen from the 1930s and ’40s, but I see King as solidly in the tradition of Churchill and Orwell.

When I looked around the American scene, thinking about is there anybody like them today, I thought: No, I really don’t see anybody quite like them today. But Martin Luther King Jr., in retrospect, walked in the footsteps of both Churchill and Orwell. He begins, in his letter from Birmingham Jail, writing very much as Orwell would have. What are the facts of the matter? He answers his question. The fact of the matter is that Birmingham is the most segregated city in America. Why is that? He explores — he says, the civil rights that the federal government tells the Negro he has are not allowed to the Negro citizens of Birmingham. In fact, the apparatus of the state is used to prevent them from exercising those rights.

This is why it’s so brilliant of King to insist on being jailed. He said, all I’m trying to do is exercise the rights my government tells me I have. So when my government puts me in jail for doing that, there is a problem. The problem is not with me. The problem is with the government that is saying out of its mouth, I have these rights. But it’s saying with its arms, no you don’t.

I think he does a beautiful job of saying here are the principles, here are the facts, and how do I apply my principles to those facts? I think it’s something that we all can emulate today, but especially journalists. I would take away, also the warning, it’s not going to make you popular. It’s not something that a lot of people want to hear right now. Nonetheless, it’s the right thing to do in the long run. It is an act of great patriotism to your country, and to your fellow citizens, to write and observe accurately.

SR: Thank you. This is splendid. I really appreciate what you have accomplished in this book and presented here.

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Slack CEO endorses UBI on Twitter

Published by Anonymous (not verified) on Fri, 25/08/2017 - 7:13pm in

Successful entrepreneur Stewart Butterfield, co-founder of online photo-sharing application Flickr and creator of the popular business communications system Slack, has spoken out on Twitter in favour of universal basic income. On 4 August 2017, Butterfield stated that “giving people even a very small safety net would unlock a huge amount of entrepreneurialism”. He was responding to Austen Allred, the founder

The post Slack CEO endorses UBI on Twitter appeared first on BIEN.

Living the American Dream in a Trailer Park

Published by Anonymous (not verified) on Wed, 12/07/2017 - 5:40am in

All too often, they’re the butt of jokes and stereotypes — mobile home parks and the “trailer trash” who live in them.

But the 50,000 parks that are spread across the United States deserve a lot more respect than that. Home to some 20 million people — 6 percent of Americans — they are the nation’s largest source of unsubsidized affordable housing, offering a shot at the American dream to people who can’t afford a traditional home. And at a time when only 1 in 4 Americans who qualify for government housing assistance actually receives aid, these parks take a huge load off a severely strained system.

Homeless in High Tech’s Shadow

April 5, 2013

Historically, trailer parks have been mom-and-pop operations that have turned a tidy profit through lot rentals paid by every tenant each month. People who live in mobile home parks generally own their homes, but not the land they live on, and pay monthly lot rental fees to a park owner — fees that vary widely depending on location, but can be around $700 to $800 in urban areas. Affordable housing activists have helped some residents — like the residents of Birch and Baker in Boscawen, New Hampshire — featured in the video above — buy their parks and own them as co-ops, to free them from ever-rising rents.

But far more common in the past few years has been the phenomenon of investors, such as billionaires Sam Zell and Warren Buffett, catching on to the fact that there’s a lot of money to be made in trailer parks — returns of 20 percent or more. Buffett’s Berkshire Hathaway owns Clayton Homes, which manufactures nearly half of all mobile homes a year in America. And Zell’s Equity LifeStyle Properties (ELS), the largest mobile home park owner in America, has a “controlling interest in nearly 140,000” park lots. The Guardian reports that in 2014 alone, ELS made $777 million in revenue, helping boost Zell’s near-$5 billion fortune.”

In general, residents are between a rock and a hard place when it comes to rent increases: Mobile homes aren’t so mobile anymore (they cost thousands of dollars to move, which can be prohibitive for people on fixed or limited incomes), and in many states there are few protections for residents, which mean that park owners can raise rents at their own discretion and are also able to evict residents in as little as 60 days.

Mom-and-pop parks — which for years were the hallmark of the industry — tended to make modest yearly increases in lot rentals (if at all). But the standard among investors is to raise rents immediately after buying a park, and to justify large increases by comparing rates to local apartment rentals. In Silicon Valley, which faces one of the worst affordable housing crunches in the country, lot rentals have been jumping — and now range from $1,600 to $2,000 a month for new residents in some parks.

These days, mobile home parks aren’t such a joke anymore — they’ve become serious business.

This video was supported by the Economic Hardship Reporting Project, a journalism nonprofit devoted to covering inequality in America, and its Puffin Story Innovation Fund.

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Can This Berniecrat Congressman Win Silicon Valley Over to His Progressive Agenda?

Published by Anonymous (not verified) on Sat, 01/07/2017 - 4:00am in

This post originally appeared at Mother Jones.

On an unseasonably warm day in June, Silicon Valley’s newest member of Congress held a town hall meeting in the gym of Milpitas High School — home of the Trojans. It was an apt venue for US Rep. Ro Khanna, a Berniecrat of recent vintage who’d pulled his own daring Trojan horse maneuver: He’d established a reputation in his district as a business-friendly centrist, ousted liberal incumbent Rep. Mike Honda in the state’s top-two election system in November with the backing of wealthy techies, and then quickly repositioned himself to Honda’s left. “If Donald Trump thinks we can explore a $3 trillion tax cut for the investor class, we can certainly afford a trillion-dollar raise for the working class,” Khanna proclaimed, drawing hearty applause from a crowd of 150, including a former Honda voter and a Republican wearing a “Ro Khanna” polo.

In many other districts, talk of a $1 trillion, government-funded wage subsidy would be written off as ludicrously socialist. But in Milpitas it now strikes many people as reasonable — a fact that says a lot about both the rapid political evolution of Khanna and of Silicon Valley itself.

In many other districts, talk of a $1 trillion, government-funded wage subsidy would be written off as ludicrously socialist. But in Milpitas it now strikes many people as reasonable — a fact that says a lot about both the rapid political evolution of [Rep. Ro] Khanna and of Silicon Valley itself.

To call Khanna an unlikely progressive hero would be an understatement. A former economics lecturer at Stanford, corporate lawyer and Department of Commerce appointee, he readily concedes that his background has engendered “a suspicion about me” on the left. In his first bid to unseat Honda, a fellow Democrat, in 2014, he openly courted votes from Republicans and independents with a focus on “job creation” and a mailer highlighting “Mike Honda’s old-school liberal orthodoxy: Big taxes. Big spending.” Khanna did not support taxing most capital gains as regular income — a position that no doubt endeared him to Valley executives, who are often paid in stock options.

Khanna was one of only two Democrats supported that year by Silicon Valley venture capitalist and Republican megadonor Peter Thiel, who wrote him a $2,600 check. He also pulled in large donations from other Republican-friendly tech billionaires such as angel investor Ron Conway and former Facebook President Sean Parker — not to mention employees of the computing goliaths Alphabet and Microsoft. “To a certain extent, I think we are starting to come to a realization of our own power,” Parker said in introducing Khanna at a 2013 fundraiser.

But things didn’t quite work out that way: Khanna narrowly lost. So like any Silicon Valley startup that doesn’t immediately catch on, Khanna pivoted.

“On the campaign trail, I heard a lot of stories about income inequality and stagnant wages,” Khanna told me in an email a few days after the 2014 election. Since then, he has been collecting stories from people he’s met while campaigning. He mentioned an African-American family whose daughter had taken off a year from the University of California to work; she couldn’t afford the tuition. “I learned more about poverty in my own district,” he said, “and I learned about the hardships of individuals who were nurses or teachers or firefighters, telling me their stories about how they lived in Silicon Valley and really couldn’t make ends meet, couldn’t afford a house, couldn’t afford the rent, had to move out, couldn’t afford college.”

We need an economic policy that is gonna favor the working class, the middle class, and not the investor class.

— Rep. Ro Khanna

After his 2014 loss, Khanna also read up on progressive economic theory. He met with the lefty economic thinkers Robert Reich, Paul Krugman, Joseph Stiglitz and Stephanie Kelton — who argue that the best way to stimulate the economy is from the bottom up, because poor and working-class people actually spend their money rather than hoarding it. The meetings led Khanna to conclude that America needs “a restructuring of the economy,” he told me. “We need an economic policy that is gonna favor the working class, the middle class, and not the investor class.”

In his 2016 rematch against Honda, Khanna dialed back the talk of appealing to Republicans, stressed his support for taxing short-term capital gains as regular income, and even quietly endorsed the presidential campaign of Bernie Sanders. Khanna’s deep-pocketed Silicon Valley supporters didn’t notice or care about his leftward shift; Thiel, Conway and Parker kept supporting him and were even joined by Republican-leaning venture capitalist Marc Andreesen. Khanna won the district in November with a commanding 61 percent of the vote.

And that’s when things got interesting. Because rather than tacking back to the center once in Washington, as his progressive critics had expected, Khanna has continued moving left. In March he proposed his $1 trillion wage subsidy for the working class: People who earn between $25,000 and $75,000 a year would effectively receive up to a 40-percent raise in the form of annual earned income tax credit (EITC) of $3,000 to $12,000. Early this month, he introduced legislation that would tax wealthy corporations if they do not pay their employees a living wage. And he recently became the first member of Congress to endorse Cenk Uygur’s Justice Democrats, a tea-party-style group dedicated to running progressives against centrist incumbents in Democratic primaries (Khanna told me he is supporting the group to encourage “competitive elections” and has not committed to endorse its candidates.)

To a certain extent, Khanna’s leftward shift makes sense politically; labor unions have been his most powerful adversaries and remain his biggest potential threat in any primary challenge. Yet it’s hard to see his evolution as simply a cold political calculation. His district, which includes parts of Fremont, San Jose, and Cupertino, voted for Hillary Clinton over Bernie Sanders by a 56 to 43 percent margin — a fact that some of Khanna’s constituents remain eager to point out.

Bernie Sanders “had his ass handed to him by Hillary Clinton — he lost — so why is he leading the Democratic Party?” Neema Kharva, the owner of a food packaging business from Santa Clara, asked Khanna at the Milpitas town hall meeting.

“He’s leading a strong part of it,” Khanna replied.

“No, he created factions,” Kharva snapped, “and his message is not very cohesive…We have so many things to beat up the Republicans on, and we need to become a lean, mean machine like the GOP is.”

“I agree with that,” Khanna said.

Khanna still feels uneasy about the idea of being a progressive torchbearer — he prefers to think of himself as a bridge between the Democratic Party’s Hillary and Bernie camps. “Obviously, everybody is a reflection of their district,” he told me, “but I think the combination of Bernie Sanders’ moral clarity with Silicon Valley’s interest in and understanding of job creation can be a compelling platform for the Democratic Party.”

The Valley’s reaction to the $1 trillion EITC surprised Khanna for how positive it was — but maybe it shouldn’t have. In fact, an even more radical idea has been batted around in the Valley for several years now: a universal basic income. Since 2014, the tech press has written dozens of stories on the concept. The San Francisco tech incubator Y Combinator began rolling out a UBI pilot project in Oakland early last year and is now giving 100 local families around $1,500 a month, no strings attached. In December, Facebook co-founder Chris Hughes and others launched the Economic Security Project, a $10 million fund aimed at researching and promoting UBI. The group has been endorsed by venture capitalist Vinod Khosla, whose Khosla Ventures has invested heavily in artificial intelligence startups. Silicon Valley sees a need to counteract the negative effects of AI and automation on a blue-collar workforce, says Economic Security Project co-chair Natalie Foster. But “Ro Khanna talking about it is really a first for Congress.”

The Valley’s support of these sorts of redistributive policies could in some ways be seen as self-serving. Khanna is not proposing to pay for wage subsidies with a tax on automated cash registers or self-driving cars; instead, he wants to levy a “financial transaction tax” that would mostly affect high-frequency trading on Wall Street. Yet his approach and others like it have also attracted endorsements from labor leaders such as former Service Employees International Union President Andy Stern and progressive thinkers such as Reich. “We did talk, and I suggested an expansion of the earned income tax credit on a bunch of grounds,” Reich told me. “It’s good economics, it helps people, it is the largest anti-poverty program in the federal government already, and it could reach far more people.”

On other issues near and dear to the Valley, Khanna is far from a lapdog for big tech. He has called for an anti-trust investigation into Amazon’s recent acquisition of Whole Foods, has advocated somewhat tighter controls on H-1B visas, and has spoken out against the practice of Uber and other gig economy apps classifying workers as independent contractors. “I am a technology optimist,” he says, arguing that in the long run tech will “create more jobs and create more opportunities.” But, he adds, “We have to have a plan for how are we going to deal with that transition, so people feel like technology is empowering their lives and not a negative.”

Still, Khanna clearly hasn’t sold everyone on his $1 trillion EITC idea — even within his own district. After he wrapped up his town hall meeting in Milpitas, I asked several attendees for their thoughts on the idea but found myself having to explain it to them. “Can you give me a nutshell what that is about?” asked Ashit Ghevaria, a product manager at a tech company who’d come to the town hall to complain about smells from the local landfill. After I filled him in, he agreed that low-income people “are working hard — they are not begging. Those are honest, sincere people. So considering our cost of living, something must be done.” But he wasn’t ready to sign on to Khanna’s plan just yet. “It’s the whole balance sheet,” he said. “If you are giving to something, you need to take out money from somewhere.”

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Summon Your Tech Kids to the White House Day

Published by Anonymous (not verified) on Tue, 20/06/2017 - 10:46pm in

Who benefits when tech CEOs meekly take their seats before Trump and indulge his inarticulate blather?