In his recent letter, Rick Frommer asked a lot of questions regarding potential city council plans to fund affordable housing by implementing an impact fee. Taken individually, each question seems reasonable and inquisitive. However, taken as a whole, it becomes clear the questions have a distinct political slant and constitute a litany of conservative derision directed against any attempt to encourage more affordable housing through implementation of impact fees or other taxes.
Frommer asked: “Is it good for a municipality to try to affect the free markets of real estate, manufacturing, labor, finance, retail and construction, among others? Even, inadvertently, by increasing fees?”
Oddly, I don’t recall him asking that question when Gainesville and other government bodies attempted to influence and affect the free market by offering tax credits, free extension of water and sewer service, or even directly subsidized construction costs to big corporations to encourage them to locate in their cities. Many examples of this exist.
For instance, hundreds of millions of tax dollars have been gifted to corporations and millionaire sports team owners for things like a new business complex housing the headquarters of Porsche of North America, the Georgia Aquarium, and the new Mercedes-Benz Stadium. The stadium alone cost citizens $200 million in direct construction subsidies, and another estimated $500 million in taxes levied on hotel room rentals.
These tax breaks and other forms of corporate welfare have favored the interest of the wealthy and big corporations by transferring their “savings” onto the backs of citizen tax payers. The above examples don’t include federal bailouts of Wall Street and investment banks regarded as “too big to fail,” and Fannie Mae and Freddie Mac that were sold fraudulent mortgages repackaged and bundled as mortgage backed securities by some banks.
Worse still, citizens were forced to pay millions of dollars in unearned bonuses to financial managers of investment banks whose own mismanagement caused the collapse of those banks -because it was quote “in their contract.”
The same philosophy is reflected in the Republican-sponsored tax bill Congress is working on today. The bill plans major cuts in funding of programs for the middle class and poor in order to deliver an unneeded tax break for the wealthy and big corporations. Conservatives claim tax cuts stimulate the economy and create jobs. Unfortunately, President Ronald Reagan’s 1988 tax cuts and “trickle down economics” preceded the recession of 1990, and when President George W. Bush signed his tax cuts into law, we got the 2008 economic collapse and massive unemployment.
This suggests there’s no such thing as a free market because practically everything is subsidized through tax incentives or cuts. Everything that is, except the interests of the middle class and poor. Does Frommer think free market interventions at public expense are OK for big corporations and wealthy sports team owners, but not for citizens on the lower end of the socioeconomic ladder? After reading his letter against affordable housing, it sure sounds like it.