Icing On The Cake

My parents once explained to me trickled down economics as such; you give the rich champaign and hope they piss on the poor.

It’s not called trickle down anymore, nor is it called voodoo economics, or Reaganomics, hell, you’d be hardpressed to find someone admitting it’s “supply side” economics, and now it’s just tax relief and tax cuts.

Because we know the policy is little more than hooking up the rich and hoping some of that windfall gets pissed on the poor, it seems there has been a concerted effort not to draw attention to the fact, instead calling a tax cut a tax cut with little clarification who actually gets benefited, and then attacking anyone who is against the plan as trying to take money out of hard working Americans’ pockets.

This is all well and good, I suppose.  In the normal rough and tumble of American life, who cares about the increased homelessness, crime, and spread of disease that are poverty’s ultimate outcomes?  No biggie?  We’ll always have panhandlers and drugdealers so where’s the big deal?

But at least, at the very least is it too much to ask to not carry on this blatantly favoritism based policy in the reconstruction efforts following a natural disaster?  Can we catch a little break here?

Apparently the answer is, “no.”

As the USAToday reports, tax breaks that were intended to invigorate construction in the areas ravaged by hurricane Katrina are for the most part going to benefit… wait for it… investors who are buying up luxury condos mere walking distance from the University of Alabama.

TUSCALOOSA, Ala. — With large swaths of the Gulf Coast still in ruins from Hurricane Katrina, rich federal tax breaks designed to spur rebuilding are flowing hundreds of miles inland to investors who are buying up luxury condos near the University of Alabama’s football stadium.

About 10 condominium projects are going up in and around Tuscaloosa, and builders are asking up to $1 million for units with granite countertops, king-size bathtubs and ‘Bama decor, including crimson couches and Bear Bryant wall art.

NEW ORLEANS: 66% of residents are back, but basic services still lag

While many of the buyers are Crimson Tide alumni or ardent football fans not entitled to any special Katrina-related tax breaks, many others are real estate investors who are purchasing the condos with plans to rent them out.

And they intend to take full advantage of the generous tax benefits available to investors under the Gulf Opportunity Zone Act of 2005, or GO Zone, according to Associated Press interviews with buyers and real estate officials.

Tuscaloosa, an area that suffered minimal intermittant wind damage.  Meanwhile, down in the areas that actually need the rebuilding efforts are stymied by “red tape”.  Even further, as Shakespeare’s Sister’s Melissa McEwan points out, people are finding that the tax breaks don’t even benefit those trying to build a home for themselves and their families, only investors seeking to rent.

But perhaps the most bothersome aspect of this is highlighted by, of all people, a Californian:

Dave Toombs, a real estate investor from Irvine, Calif., with no connection to Alabama, bought two new, upscale townhouses at The Traditions, just minutes from campus, as investment properties. He said he hopes to use GO Zone tax benefits when he files his taxes.

“If we qualify for the GO Zone it will be icing on the cake,” said Toombs, who is consulting with an accountant because the rules are complicated. “It’s another plus check to put in the column.”

Icing on the cake.  Thousands of people were dislocated by that storm, turned into refugees in their own country and huddled up in the battered superdome.  The government gave them blankets and bottles of water.

These weren’t, predominantly, the affluent.  These were the working poor that President Bush presided over, and while David in California might think it to be icing on the cake to own a condo within walking distance of Crimson Tide ball games, I have a hard time thinking the poor and dislocated folks who couldn’t afford the rent there have quite as rosy a view.

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