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  #1  
Old 09-17-2008, 01:05 AM
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Schwarzenegger to veto California budget, a first in modern times

I'm putting my money where my mouth is and I'm supporting the Governor and his Veto. Every month of the stalemate in the budget I lose about $5,000 and right now I'm down about $15K with no end in sight.

That said California is spending more money than it can invent in phony accounting and the State is already short 17 billion dollars this fiscal year and the year is not over yet. Someone needs to draw the line and as much as I hate stressing over my next paycheck I'd feel worse knowing the madness will continue with our out of control Democratic legislature.

Yet another reason I'm not a Democrat any longer.

STRESS!

http://blogs.usatoday.com/ondeadline...rzenegger.html
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  #2  
Old 09-17-2008, 02:15 AM
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Okay, here's a crazy idea.... We all know that I'm against Obama's tax increase and that is probably the deciding factor that is going to push me McCain.

Having said that, I'm not against all tax increases, just tax increases that unfairly target the business owners, professionals and moderately successful Americans so some lazy asses can have the new iPhone.

Back to my point, WHY IN THE HELL DO WE HAVE PROP 13?

For those of you outside of California, that means we get taxed on the acquisition value of our homes rather than the assessed value.

In other words. Grandma and grandpa bought house in 1980 for $200,000, house is now worth $3 mil. Granma and grandpa are still paying the same relative taxes they paid in 1980.
Which means, it's less expensive for them to stay in their house (and defer maintenance) than it would be to move to a smaller apt. that would be more practical now that they all kids are grown up and they are alone. Taxes cost $5k/yr. vs. an apt which would cost more.

So as a result, fewer houses are available for sale because people are incentivesed not to move, driving the costs of available homes up. Older homes are getting more and more dilapidated because grandma and grandpa can't afford the upkeep. Everything else has gotten more expensive, like schools, roads, public works, etc. But those services are being subsidized by the new homeowners who pay more in taxes, because the homes are more expensive, and grandma and grandpa are paying 1/30th in taxes from what their neighbors are paying..

And because of this, there is also no money in the state to fix roads, fix schools, etc.

-- The original idea behind it was to keep rising prices to force people out of their homes because of taxes. I say, TOO DAMN BAD.. It's not your neighbors job to pull your weight. You can't afford to live on beachfront property in Santa Monica anymore, MOVE. You can't afford that home in Beverly Hills because you're retired, MOVE.

It's rent control for homeowners and it's Bullshit. I'd gladly pay double my property tax if it meant better roads, schools, public services, and if all the homes in my area that look like there about to fall over were updated...

What a bullshit Prop.
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  #3  
Old 09-17-2008, 06:55 AM
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Just a couple of points ....

#1 The house Grandma and grandpa bought house in 1980 for $200,000, house is not worth $3 mil anymore.

#2 Even if it was, if they got taxed the way you propose Grandma and grandpa couldn't afford to live in their house. But it appears by your logic they shouldn't be living there because they can't afford to keep it up anyway?

Bottom line? If you want to raise revenue fine but i believe there are other avenues to do that. Blaming PROP 13 for the tax shortfall is an old argument
that has never worked.

None of us have really been behind closed doors to see what the real problem is with the budget. Until we have some first hand knowledge
about the fiscal issues and the what it is that keeps law-makers
from reasonable compromise most of us will be a bit short handed with solutions.

But depriving senior citizens of their choice as to where they live seems at least in my mind short sighted.

But in fairness let's look at some facts about prop 13.

A Note on Fairness

Is the measure’s acquisition tax plan unfair? The acquisition property tax system calculates the tax at the time the property is acquired by a new owner. A cap is placed on future increases. The traditional ad valorum (of the value) property tax system bases taxes yearly on the current value of the property. Adherents to the ad valorum property tax system object that similar homes, side by side, pay different taxes depending on when they were purchased.

As HJTA Director of Legal Affairs Jonathan Coupal explained in a Los Angeles Times article, paying different taxes for similar services is not unique in our tax system. The acquisition property tax system is no more unfair than the traditional method of property taxation under which owners of more valuable property pay more for the same services. This fairness argument ignores the nature of taxes. If we were that concerned with proportionality between the amount of tax and the level of service, we would evolve to a system of nothing but user fees. Because proportionality between tax liability and services has never been an attribute of property taxes, it is unfair to level this charge against Proposition 13 alone.

The ad valorum tax system doesn't assure equal taxation. A 1966 report from the Assembly Revenue and Tax Committee said: equalization of assessments is "more myth than a reality."

A number of economists argue that the equality argument is misguided. California homebuyers probably pay no real tax penalty under Proposition 13 because the differential assessments are capitalized into the purchase price. In other words, prospective taxes reduce the purchase price below what would otherwise be paid, hence no tax penalty.

Proposition 13 is a contract between government and individual taxpayers. As Karen Nolan of the Vacaville Reporter commented, Proposition 13 is like her grandmother's quilt: each patch is different, but stitched together it keeps everybody warm. Under Proposition 13, each property may have a different tax amount, but every one in the community is protected.

That overall taxpayer protection comes from that revolutionary aspect of Proposition 13 -- tax certainty.

The Unusual Case of Tax Certainty

Because of Proposition 13, for the first time the certainty in taxation lay in the hands of the taxpayer instead of the tax collector. Proposition 13 set up an acquisition value system that treats all homeowners alike in that they pay 1% of the market value established at the time of purchase. It limits increases to 2% a year.

In 1992, Justice Harry Blackmun wrote in the United States Supreme Court's decision in Nordlinger v. Hahn, upholding the constitutionality of Prop 13's acquisition system: "The Equal Protection Clause is satisfied as long as there is a plausible policy reason for the classification." He found two rational reasons -- 1) Neighborhood preservation and continuity, and 2) Protecting of existing owners of property who purchase property with certain tax expectations, who might be forced to sell or divert expenditures from food to taxes when taxes get too high.

An acquisition property tax policy is predictable and removes the problem of subjective assessments by assessors, while protecting homeowners against prohibitive property tax increases.

For government, the system works, too. Property tax in California was increasing about 10% a year statewide before the recession and continued to produce positive revenue growth despite the recession.

Government also enjoys a measure of certainty under Proposition 13 during lean times. Normally, under the market value system, when property values drop during a recession, taxes must be reduced. Because, under Proposition 13, many properties are paying taxes on assessed values below even the reduced market values, taxes on these properties do not have to be lowered. In fact, they can still be raised 2% if inflation rises that much or more. The government does not suffer a severe shock to its revenue collection. During the 1990s recession, one Los Angeles County assessor's official acknowledged that advantage and told the L.A. Daily News: "Thank goodness for Proposition 13."
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  #4  
Old 09-17-2008, 07:03 AM
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I was reading about this briefly this morning. What I found interesting is that Cali legislators admitted that their income tax early concept was a short term goal that did nothing to solve budget problems that would come up again in the following year. I found that interesting. People would actually support a legislature that admitted it only looks out until about 10 months down the road.
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Old 09-17-2008, 03:30 PM
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Quote:
Originally Posted by Quicksilver
Just a couple of points ....

#1 The house Grandma and grandpa bought house in 1980 for $200,000, house is not worth $3 mil anymore.

#2 Even if it was, if they got taxed the way you propose Grandma and grandpa couldn't afford to live in their house. But it appears by your logic they shouldn't be living there because they can't afford to keep it up anyway?

Bottom line? If you want to raise revenue fine but i believe there are other avenues to do that. Blaming PROP 13 for the tax shortfall is an old argument
that has never worked.
#1 - On my side of town, the $200,000 house is still worth $3mil. Or the land is worth $2.5mil and the house is a tear down.
#2 - Absolutely, 100% correct. But in addition, grandma and grandpa are incentivized NOT to move. Cause it's more expensive to move to a 2 bedroom apt. than it is to stay in the 5 bedroom house.

Sorry QS, but where I come from when people reach the age that their children are out of the house, they downsize. They sell their house and move to a nice retirement area and get a great apt.

So unless Grandma and Grandpa decide to foster some kids, move relatives into the house, turn the extra rooms in the house into some sort of day care, there is no reason why the state gov't and the younger residents should subsidize their living.

I know young families that are successful and can't afford a house and are living in one bedroom apt's with babies, while I have neighbors who haven't mowed their lawns, fixed their retaining walls, painted their house, or done anything other than live relatively tax free, in a 5 bedroom house that is completely empty..

I have lived in many states including Florida, NY, Ohio and believe you me, Prop 13 is not a benefit to anyone except a small few.
ANd just like people pay taxes on income, so should they pay taxes on the value of their real estate.

It's a socialist program and is making this state worse, not better, except for the very few how are staying in family homes long beyond their children being gone..

Just my .02

Of course though, I could understand your point of view as well... "Why should I have to move?" Why should I pay more in taxes?

- to which I would answer, What costs the same today as it did in 1980?
NOTHING... So the people who have benefitted the most from prop 13 are being subsidized by my friends who can't afford a home and have nice incomes as doctors, etc.
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  #6  
Old 09-17-2008, 04:18 PM
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You apparently didn't read the info provided.

You can't be serious.!!!! But in case your not joking.........

You actually believe that just because where you come when people reach retirement age and their children are out of the house,
they should say OH MY GOD B-Line believes we should downsize. Let's sell our house and move to a nice retirement area and get a great apt????
Your brain must be on fire. So let me extinguish your irrational illogical thinking with a thought of my own.

On your side of town that may be correct but what about the rest of California?
Your side of town or where you come from shouldn't be the determining factor
regarding what people do or how they live their lives,
or how taxes should be apportioned.

Life isn't fair and neither is death and taxes so take in a deep breath
and relax.

FIRE OUT.............


Quote:
Originally Posted by B-Line
#1 - On my side of town, the $200,000 house is still worth $3mil. Or the land is worth $2.5mil and the house is a tear down.
#2 - Absolutely, 100% correct. But in addition, grandma and grandpa are incentivized NOT to move. Cause it's more expensive to move to a 2 bedroom apt. than it is to stay in the 5 bedroom house.

Sorry QS, but where I come from when people reach the age that their children are out of the house, they downsize. They sell their house and move to a nice retirement area and get a great apt.

So unless Grandma and Grandpa decide to foster some kids, move relatives into the house, turn the extra rooms in the house into some sort of day care, there is no reason why the state gov't and the younger residents should subsidize their living.

I know young families that are successful and can't afford a house and are living in one bedroom apt's with babies, while I have neighbors who haven't mowed their lawns, fixed their retaining walls, painted their house, or done anything other than live relatively tax free, in a 5 bedroom house that is completely empty..

I have lived in many states including Florida, NY, Ohio and believe you me, Prop 13 is not a benefit to anyone except a small few.
ANd just like people pay taxes on income, so should they pay taxes on the value of their real estate.

It's a socialist program and is making this state worse, not better, except for the very few how are staying in family homes long beyond their children being gone..

Just my .02

Of course though, I could understand your point of view as well... "Why should I have to move?" Why should I pay more in taxes?

- to which I would answer, What costs the same today as it did in 1980?
NOTHING... So the people who have benefitted the most from prop 13 are being subsidized by my friends who can't afford a home and have nice incomes as doctors, etc.
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  #7  
Old 09-17-2008, 04:20 PM
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Quote:
Originally Posted by B-Line
#1 - On my side of town, the $200,000 house is still worth $3mil. Or the land is worth $2.5mil and the house is a tear down.
#2 - Absolutely, 100% correct. But in addition, grandma and grandpa are incentivized NOT to move. Cause it's more expensive to move to a 2 bedroom apt. than it is to stay in the 5 bedroom house.

Sorry QS, but where I come from when people reach the age that their children are out of the house, they downsize. They sell their house and move to a nice retirement area and get a great apt.

So unless Grandma and Grandpa decide to foster some kids, move relatives into the house, turn the extra rooms in the house into some sort of day care, there is no reason why the state gov't and the younger residents should subsidize their living.

I know young families that are successful and can't afford a house and are living in one bedroom apt's with babies, while I have neighbors who haven't mowed their lawns, fixed their retaining walls, painted their house, or done anything other than live relatively tax free, in a 5 bedroom house that is completely empty..

I have lived in many states including Florida, NY, Ohio and believe you me, Prop 13 is not a benefit to anyone except a small few.
ANd just like people pay taxes on income, so should they pay taxes on the value of their real estate.

It's a socialist program and is making this state worse, not better, except for the very few how are staying in family homes long beyond their children being gone..

Just my .02

Of course though, I could understand your point of view as well... "Why should I have to move?" Why should I pay more in taxes?

- to which I would answer, What costs the same today as it did in 1980?
NOTHING... So the people who have benefitted the most from prop 13 are being subsidized by my friends who can't afford a home and have nice incomes as doctors, etc.
LOL...I agree with you and get this...

I purchased my moms house on some acreage which allowed her to buy smaller home in town with less maintenance. I then completely remodeled / rebuilt the entire house and her low prop 13 tax base was transfered to me because I'm family.

I benefit from prop 13 and I can afford to pay the higher taxes. You won't see me offering though.
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Old 09-17-2008, 06:46 PM
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Hey Barry,

Don't know much about where you grew up or different areas of the country where you may have lived, but if you've always been a California resident, I could completely understand how you might support Prop 13.

But in NYC, real estate taxes are very high, so people move to the suburbs to avoid "city tax".

It is one thing to have a tax system that limits the amount of increase, it's another thing all together to have a tax ceiling that keeps payments practically stagnant for 30+ years.

It is welfare and state subsidy on a grand scale. And the state wouldn't be in such a fiscal mess if grandpa homeowner was paying his fair share in taxes. Granted though the rich and poor both benefit. It's only the state that suffers (look at our roads, schools, public services and budget crisis.)

Again, I don't have an issue with a tax plan that helps people who want to stay in their homes. I do have an issue with a tax plan that incentivizes them NOT TO MOVE. There can be a happy medium.

My parents have some retired friends that live in the valley. Their children have been out of the house for a decade and THEY WANT TO MOVE. They want something smaller, something with less maintenance, etc.
-- But because of Prop 13, it doesn't make financial sense for them to downsize because it will cost them more to move to a smaller place because of Prop 13. The longer you are in a home, the harder it becomes to leave. And despite what Jonathon Copland explains, that impedes commerce.

-- Which means:
fewer homes on the market.
Higher prices on existing homes.
Higher taxes to new home buyers because of the higher prices.

I have lived in numerous places besides California and believe you me, Prop 13 is the exception not the rule.. And it's a stupid exception..

California is the only state that has such nonsense. And I would gladly pay more real estate taxes and have better public services and fewer dilapidated prop 13 houses all over the neighborhood.
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Old 09-17-2008, 09:35 PM
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If you believe your comments
fewer homes on the market.
Higher prices on existing homes.
Higher taxes to new home buyers
because of the higher prices.

Then you need to visit the Central Valley
and Sacramento California where there
are a gaggle of empty houses which
are collecting no taxes and have lost
70% of their value. Examples
that clearly contradict your opinion.

I respect your opinon but clearly
you're opinion in my view is narrow,
baseless, without substance,
and quite frankly unkind.

The overall posititve effect of Prop. 13 is that it forces
the tax supported entities at all levels to implement
fiscal responsibility (living within a budget) instead of having
open access to the taxpayers checkbook.
And thats the way it should stay.

Seeing as how your pretty set with your opinion
regarding this matter i see no reason to continue
with a discussion that will not solve the a problem you
feel is important to you.
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Last edited by Quicksilver; 09-17-2008 at 09:51 PM.
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Old 09-18-2008, 02:38 PM
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Barry,

Remember, I am a homeowner also. I'm not taking a stab at a benefit that does not effect me.
If Prop 13 were to be recalled, I would suffer having to pay an increase in taxes as well.
So while I am the type of person that likes to vote with my wallet, on the issue of Prop 13, compared to the other states I have lived in, it's bringing this state down, not propping it up.

The roads by my house are as bad as bad can be. The public school systems are horrible. The police force is overworked, understaffed and we have fire departements that don't have enough money to put out out these ginormous blazes that are popping up everywhere.

As a tax payer, I would love for the state gov't to put a ceiling on INCOME TAX as well. What I'm paying today in income will be the same thing I'm paying in 30 years regardless of earnings, etc. But the loss of that revenue is not going to help city groups to budget better, it's only going to leave them underfunded with less adequate professionals doing the job because salaries are too low.

No one likes to pay more taxes but it's a necessary evil.

I've also never seen a toll road in California. There are certainly none in Los Angeles. You can't get out of the state of New Jersey without paying a toll for using their highways..

And it's the income that is gained from things like tolls and real estate taxes that helps pay for schools and roads.

So you have to ask yourself, what's more important. Giving people a BONUS by not having to pay adequate taxes because they have been living in a home for X amount of years or having good schools, roads, police departments, fire departments, etc.

In addition, the increase that is allowed in real estate taxes does not even come close to matching the increase in inflation. Which actually means, you are paying LESS in taxes than you were 30 years ago.

I could understand if the tax increases were keeping up with inflation or the cost of living but it doesn't. When fuel prices go up, so do the prices of running school buses and ambulances for the fire department.

Yes, there is a benefit to all homeowners, especially the homeowners who have been in there homes a long time. But just like someone in NYC who has a 4000 sqft. rent controlled apt. on Central Park South for $1000 month isn't fair, neither is a homeowner in California who is paying 1/20 in taxes for the same property as their neighbor with the exact same house.

Just my .02..
And don't think it's narrow. I understand the other points, but the means don't justify the ends.
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