America’s Affordable Housing Crisis: Challenges and Solutions

Comments for the Record

United States Senate

Committee on Finance

America’s Affordable Housing Crisis: Challenges and Solutions

Tuesday, August 1, 2017, 10:00 A.M.

By Michael G. Bindner

Center for Fiscal Equity

Chairman Hatch and Ranking Member Wyden, thank you for the opportunity to submit these comments for the record to the Committee on Finance.  As usual, we will preface our comments with our comprehensive four-part approach, which will provide context for our comments.

• A Value Added Tax (VAT) to fund domestic military spending and domestic discretionary spending with a rate between 10% and 13%, which makes sure very American pays something.
• Personal income surtaxes on joint and widowed filers with net annual incomes of $100,000 and single filers earning $50,000 per year to fund net interest payments, debt retirement and overseas and strategic military spending and other international spending, with graduated rates between 5% and 25%.  
•  Employee contributions to Old Age and Survivors Insurance (OASI) with a lower income cap, which allows for lower payment levels to wealthier retirees without making bend points more progressive.
• A VAT-like Net Business Receipts Tax (NBRT), which is essentially a subtraction VAT with additional tax expenditures for family support,  health care and the private delivery of governmental services, to fund entitlement spending and replace income tax filing for most people (including people who file without paying), the corporate income tax, business tax filing through individual income taxes and the employer contribution to OASI, all payroll taxes for hospital insurance, disability insurance, unemployment insurance and survivors under age 60.

The Subtraction VAT/Net Business Receipts Tax is the relevant item for the purposes of this topic.  Among the possible credits and deductions from this tax are the diversion of Social Security Old Age and Survivors tax revenue to employee stock grants, with a third of those traded into an insurance fund of similar companies.  This is important, though not essential, because employee-owned firms can spend cooperatively as well as manage cooperatively.  Current employee-owned firms could, of course, pursue these options immediately.  A second credit could be for education, collegiate, trade and remedial.  This credit would include both tuition and living expenses, including both pay and housing.

Larger firms would have larger apartment buildings “on campus” or would pay for campus housing from universities, trade schools and remedial education providers (both public and religious – religious adult education would fill in a whole in their product portfolio – one that is sorely lacking).

Student housing would not be “one size fits all.”  Students with children would also get $10000 per child per month, payable with stipends.  Students would not be one size fits all either.  They could be teens, young adults or middle-aged learners who have never before had a chance at literacy or workers who have lost their jobs to automation, as well as the disabled who need skills to enter the workforce.

At some points, employee-owned cooperatives may dominate a local economy without employing all members.  In such cases, in lieu of land value taxes, cooperatives could house and pay a citizens’ dividend to non-workers.

Work and student rules will require that rented housing be kept neat.  Longer-term workers will receive permanent housing (possibly with indoor gardening capabilities made possible by Mars exploration research) which they will be responsible for maintaining, but with maintenance and repair services so no one need let problems go unfixed.  Ownership and responsibility both guard against bad landlords and bad tenants.  This plan will maximize both, but only if you think outside the box.

Thank you for the opportunity to address the committee.  We are, of course, available for direct testimony or to answer questions by members and staff.