Today I want to feature a book by New York Times reporter and two-time Pulitzer Prize finalist Jason DeParle. American Dream is a classic of literary journalism. It tells the story of the millions of women sent to work as a result of Bill Clinton’s drive to “end welfare.” The stories in the book speak to the question: If as the American dream goes we live in a country where anyone can make it, why generation after generation don’t some families make it?
And here is a quote about poverty from page 328 of the book that I find particularly poignant: “At $5.15 an hour, the real value of the minimum wage is lower than in 1950 when Hattie Mae was still picking cotton.”
I was recently contacted by Santo Purnama of CultureUnplugged.com about their non-profit film and documentary archive for social impact. I looked through their hunger and poverty section, finding many interesting videos. This one about micro-finance stood out to me in particular since micro-finance has intrigued me for a while:
Here are a few older posts from this blog about microfinance:
Sheila Nix, the U.S. Executive Director of ONE, emailed me some information about the crisis in the horn of Africa.
Yesterday, the United Nations declared a famine in south Somalia. There are more than 11 million people in the Horn of Africa–more than the combined population of NYC and Huston–who desperately need food, clean water and basic sanitation.
ONE is a grassroots advocacy and campaigning organization that fights extreme poverty and preventable disease, particularly in Africa.
I recently received an email from David Orr of the World Food Programme about a refugee
camp at Dadaab in Kenya that he just visited. Here’s an excerpt:
I’ve talked to some of the newly-arrived families at Dadaab. I’ve seen and heard about their suffering, how they have lost their crops and their animals.
Many stories are similar to that of Adan Kulo, who watched his livestock starve to death. “I realized my family would soon follow,” he says. He took his pregnant wife and children on a grueling three-week journey through the desert to Dadaab. They were robbed by bandits; food ran out; one child fell ill and his parents feared for his life.
Within hours of arrival at the camp, Adan received 21 days’ worth of food from the World Food Programme. “Now that we have food,” he says, “I’m looking for a spot where I can build a shelter for my family.”
WFP is the world’s largest humanitarian agency fighting hunger. They are 100% voluntarily funded, which means they rely on donors’ generosity to expand their operations.
For years CT has been dealing with a budget crisis. Spending is greater than revenue, and revenue is down as a result of the recession. In terms of poverty this is dangerous because government spending cuts need to be made and are being made, and that means many of the government sponsored-programs that are struggling to keep this state’s poor afloat are are a risk of being cut away leaving the people to sink into poverty.
Worse yet, the alternative–increasing taxes–can be just as harmful. One new tax attempt severely hurts local online retailers many of which are small businesses including many financially struggling entrepreneurs. Here’s the issue: States cannot collect sales taxes from out-of-state businesses. By absurdly claiming online referrers, who independently contract as advertisers for companies like Amazon and happen to live in-state, are a physical presence of the business in the state. In other words, the state intends to claim that paying an independent contractor a commission for advertising is tantamount to opening up shop in the state, even though neither the advertising nor the sales resulting from the advertising are actually happening in the state. If that sounds complicated it’s because it is so absurd a rationalization for collecting an illegal tax. Being such an absurd rationalization, there is a good a chance of the new tax attempt not bringing any new tax revenue. But what is simple is that this tax hurts CT businesses and struggling entrepreneurs.
This new tax means companies like Amazon will end their affiliate programs with any and all CT businesses and entrepreneurs. This is a painful loss of revenue for many of these CT businesses. Ironically, that means the state will be collecting less income taxes from these local businesses and yet will still not be collecting taxes from the out-of-state Amazon. I know this first-hand because I was an affiliate with Amazon until June 10th when they terminated me and all other CT affiliate advertisers. Now my income has gone down as a result of a failed attempt by the CT government to collect sales taxes on a Seattle-based company.
A well-written July 1st editorial from Investors Business Daily explains the way history repeats in regards to this failed tax attempt:
There’s a bigger issue at stake here, though. Ever since the catalog was invented, states have tried to force out-of-state retailers to pay their sales taxes. The matter went all the way to the Supreme Court, which in 1992 ruled that doing so violated the interstate commerce clause.
Now states think they’ve found a way around this restriction by vastly expanding the definition of “presence” in a state to include online marketing affiliates.
Also a New Haven Register editorial from May 27th summarizes the issue well in my opinion:
The budget counts on this new tax raising $9.4 million in the next year, although those following the battle over the tax, which is strongly opposed by online retailers, don’t expect it to yield any revenue next year[...] The likely loss of $9.4 million in tax revenue next year is minor in comparison to a state budget of $19 billion. Its impact, however, will be far larger on the small Connecticut companies that counted on the referral fees from Internet sales.
To balance the budget spending cuts and new taxes may both be needed. But we cannot let most of the burden of these spending cuts and taxes fall on small businesses, the poor and the struggling, who are already unfairly burdened, especially if the burden is from an ill-conceived tax or cut that doesn’t even work and won’t even provide the claimed balance to the budget.