© by Mark Dempsey
Recently, State Senator Ted Gaines weighed in to oppose the agreement to raise California’s minimum wage. He also just sent me a push-polling opinion “survey” suggesting he is saving us from the tax-and-spenders in the capitol who might repeal any part of Proposition 13.
In the last 40 years, the bottom 90% of real median income increased $59. If that were an inch on a bar graph, the top 10% would have an income increase bar 141 feet high. The bar for the top 0.1% would be five miles high. (Source David Cay Johnston) I’d say those mammoth increases--orders of magnitude larger than the proposed minimum wage changes--have nothing to do with productivity, and everything to do with cheating and looting. What’s Gaines doing about those?
And is Proposition 13 really threatened? No one proposes revising anything about homeowners’ tax rates, but the real cheating and looting in Proposition 13 is in the loophole for commercial property: If owners sell less than 50% of a commercial property, then a sale triggers no reassessment and taxes remain at the old rate. So many commercial properties, remain assessed at, in effect, 1978 values.
For example: computer mogul Michael Dell recently bought a Santa Monica hotel. To avoid triggering re-assessment, he bought a third of the hotel, his wife another third, and his son another third. More than 50% of the real estate did not change hands at any one time, so this sale triggered no reassessment, saving Dell oodles of taxes...and it cost us ordinary property owners higher tax rates or worse public services to compensate.
Don’t Prop 13’s lower rates encourage new business, though? Nope. New businesses must pay tax based on current-value assessments if they purchase property; the current system favors old businesses. In fact, commercial office parks are patchworks of companies paying current tax rates, and those using the Prop 13 loophole to avoid paying tax at current rates.
How much does this cost the taxpayers of California? Roughly $5 billion a year. That’s one reason we must pay higher taxes, or have worse public services. California’s schools and roads used to be among the finest in the nation, and our universities had free or low tuition; not any more. Residences may get a property tax break in some circumstances, but commercial property gets the real free lunch here.
Americans love a winner, but hate a cheat. Between offshoring profits in Panama and other tax havens, and gaming public policy domestically with champions like Senator Gaines, it sure looks like corporate America has been cheating.
And it has an impact: Americans’ median net worth is roughly $30K, while Australian’s is $200K. Could tax dodges like the commercial loophole in Prop 13 be responsible for that difference? Could a higher minimum wage possibly be only a tiny compensation for all that fraud and looting by our plutocratic masters? And is that pope fellow still Catholic?
http://makeitfairca.com proposes eliminating the commercial loophole in Prop 13--leaving homeowners’ tax breaks intact. I say tell Senator Gaines to stop trying to con us and support making it fair.
Recently, State Senator Ted Gaines weighed in to oppose the agreement to raise California’s minimum wage. He also just sent me a push-polling opinion “survey” suggesting he is saving us from the tax-and-spenders in the capitol who might repeal any part of Proposition 13.
In the last 40 years, the bottom 90% of real median income increased $59. If that were an inch on a bar graph, the top 10% would have an income increase bar 141 feet high. The bar for the top 0.1% would be five miles high. (Source David Cay Johnston) I’d say those mammoth increases--orders of magnitude larger than the proposed minimum wage changes--have nothing to do with productivity, and everything to do with cheating and looting. What’s Gaines doing about those?
And is Proposition 13 really threatened? No one proposes revising anything about homeowners’ tax rates, but the real cheating and looting in Proposition 13 is in the loophole for commercial property: If owners sell less than 50% of a commercial property, then a sale triggers no reassessment and taxes remain at the old rate. So many commercial properties, remain assessed at, in effect, 1978 values.
For example: computer mogul Michael Dell recently bought a Santa Monica hotel. To avoid triggering re-assessment, he bought a third of the hotel, his wife another third, and his son another third. More than 50% of the real estate did not change hands at any one time, so this sale triggered no reassessment, saving Dell oodles of taxes...and it cost us ordinary property owners higher tax rates or worse public services to compensate.
Don’t Prop 13’s lower rates encourage new business, though? Nope. New businesses must pay tax based on current-value assessments if they purchase property; the current system favors old businesses. In fact, commercial office parks are patchworks of companies paying current tax rates, and those using the Prop 13 loophole to avoid paying tax at current rates.
How much does this cost the taxpayers of California? Roughly $5 billion a year. That’s one reason we must pay higher taxes, or have worse public services. California’s schools and roads used to be among the finest in the nation, and our universities had free or low tuition; not any more. Residences may get a property tax break in some circumstances, but commercial property gets the real free lunch here.
Americans love a winner, but hate a cheat. Between offshoring profits in Panama and other tax havens, and gaming public policy domestically with champions like Senator Gaines, it sure looks like corporate America has been cheating.
And it has an impact: Americans’ median net worth is roughly $30K, while Australian’s is $200K. Could tax dodges like the commercial loophole in Prop 13 be responsible for that difference? Could a higher minimum wage possibly be only a tiny compensation for all that fraud and looting by our plutocratic masters? And is that pope fellow still Catholic?
http://makeitfairca.com proposes eliminating the commercial loophole in Prop 13--leaving homeowners’ tax breaks intact. I say tell Senator Gaines to stop trying to con us and support making it fair.
No comments:
Post a Comment
One of the objects if this blog is to elevate civil discourse. Please do your part by presenting arguments rather than attacks or unfounded accusations.