Mo' Money Mo' Problems, OR California still sucks

[fskimospy]

<stupid liberal>
We already have the highest taxes in the country and cant raise enough money, I know we'll raise taxes more!
</stupid liberal>

Learning about the roots of problems is HARD when all you need to do is say 'STUPID LIBRUL HURR HURR', huh?

 

[Argo]

And we are seeing the result of 80 years of FDRs policies.
The majority of taxes collected should be collected by the state/county/city and NOT the federal government.

Funding should not be a political favor to a municipality by the federal government.

Funding should not be diluted by several layers a bureaucracy before it gets it those that are spending it.

The federal government needs to drastically cut taxes allowing local municipalities to raise their base tax rates. The only downside to this is that the federal government loses it control over the state...boo hoo...

I can stand behind that. I would also go as far as saying the federal government should set very few laws. Majority of the laws should be at the state/local level - federal government should just make sure that individual states uphold consitution, and protect our national interests (offense/defense).

 

[werepossum]

Remember when we had our little conversation about straw men?

Yes. That was every thread in which you've posted. LOL

 

[woolfe9999]

I live in CA, and the truth is that it really doesn't have a higher tax burden than everywhere else. It is perceived that way because we have high income and sales tax. However, we have extremely low property taxes due to Proposition 13, and property taxes are a major source of revenue for other states. A major problem is that Prop 13 not only cut property tax to 1% of property value, but it allows the original property valuation to follow the property around through inheritances and inter vivos family transfers, meaning that people owning property in 2050 will be paying 1% of the property's assessed value as of 1978. This is why we have such high income and sales taxes, and it is great if you own property here but sucks if you rent because you have to endure the high income and sales tax but don't get the benefit of the near non-existent property taxes.

- wolf

 

[fskimospy]

Yes. That was every thread in which you've posted. LOL

Maybe you should consider what that says about your method of argument.

 

[JS80]

I live in CA, and the truth is that it really doesn't have a higher tax burden than everywhere else. It is perceived that way because we have high income and sales tax. However, we have extremely low property taxes due to Proposition 13, and property taxes are a major source of revenue for other states. A major problem is that Prop 13 not only cut property tax to 1% of property value, but it allows the original property valuation to follow the property around through inheritances and inter vivos family transfers, meaning that people owning property in 2050 will be paying 1% of the property's assessed value as of 1978. This is why we have such high income and sales taxes, and it is great if you own property here but sucks if you rent because you have to endure the high income and sales tax but don't get the benefit of the near non-existent property taxes.

- wolf

I'm sorry but not all of us have inherited property with $50k cost basis on a $700k house. Because CA property is so expensive, the taxes you pay, as a new homeowner, is comparable (or higher) to what you will be paying on a similar home in low tax burden states.

 

[Patranus]

I can stand behind that. I would also go as far as saying the federal government should set very few laws. Majority of the laws should be at the state/local level - federal government should just make sure that individual states uphold consitution, and protect our national interests (offense/defense).

And that was the original intent of the federal government. If the intent of the federal government was to act the way it is right now, why is the point of having state governments?

 

[woolfe9999]

I'm sorry but not all of us have inherited property with $50k cost basis on a $700k house. Because CA property is so expensive, the taxes you pay, as a new homeowner, is comparable (or higher) to what you will be paying on a similar home in low tax burden states.

You're right, but you still get the benefit of not getting reassessed while you own the property, no matter how long you own it. And this affects commercial property in very problematic ways as well. Most commercial property is owned by business entities, not individuals. When a business entity that operates on a property decides to sell out or go out of business, they just sell the business entity to the buyer along with the property, and hence the same entity still owns the property and therefore there is no reassessment for the new owner.

Property tax revenues are overall lower here in California as a percentage of total state and local revenues than in 45 of the 49 other states. In fact, California's overall tax burden is very close to the national average:

http://www.ccsce.com/pdf/Numbers-oct07-HighTaxState.pdf

This analysis was done before the recent sales tax increase, but also doesn't take into account tax increases in many other states over the past 2 years.

- wolf

 

[Patranus]

You're right, but you still get the benefit of not getting reassessed while you own the property, no matter how long you own it. And this affects commercial property in very problematic ways as well. Most commercial property is owned by business entities, not individuals. When a business entity that operates on a property decides to sell out or go out of business, they just sell the business entity to the buyer along with the property, and hence the same entity still owns the property and therefore there is no reassessment for the new owner.

Property tax revenues are overall lower here in California as a percentage of total state and local revenues than in 45 of the 49 other states. In fact, California's overall tax burden is very close to the national average:

http://www.ccsce.com/pdf/Numbers-oct07-HighTaxState.pdf

This analysis was done before the recent sales tax increase, but also doesn't take into account tax increases in many other states over the past 2 years.

- wolf

California is 6th
http://www.taxfoundation.org/taxdata/show/335.html

 

[woolfe9999]

California is 6th
http://www.taxfoundation.org/taxdata/show/335.html

Yes 6th in the nation, but the actual range is very tight. According to this data, California is .8% higher than the national average. There are a couple states with very low tax burdens, like Nevada and Alaska which are about 3% below the national average. However, the vast majority of states are within 1% of where California is. The notion that we are taxed through the nose here, in a comparative sense, is largely a myth.

- wolf

 

[JS80]

Yes 6th in the nation, but the actual range is very tight. According to this data, California is .8% higher than the national average. There are a couple states with very low tax burdens, like Nevada and Alaska which are about 3% below the national average. However, the vast majority of states are within 1% of where California is. The notion that we are taxed through the nose here, in a comparative sense, is largely a myth.

- wolf

It is not a myth. If you are a high earner with a high cost basis on your home you are indeed taxed through your nose.

 

[marincounty]

It is not a myth. If you are a high earner with a high cost basis on your home you are indeed taxed through your nose.

If you can't handle the cost you can move to Nevada or Alaska or some other cheaper state.
But they don't pay California salaries in those states either.

 

[Craig234]

It is not a myth. If you are a high earner with a high cost basis on your home you are indeed taxed through your nose.

Let's review JS80's logic.

The generality that Californians are 'taxed through the nose' is not disproven by the fact that the average taxes are close to the national average; rather it's proven by one group allegedly paying high taxes.

Facts don't seem to be of much use to JS80. No doubt the rich skyrocketing in income while the poor are flat prove the rich are getting screwed and overtaxed.

 

[Slew Foot]

Let's review JS80's logic.

The generality that Californians are 'taxed through the nose' is not disproven by the fact that the average taxes are close to the national average; rather it's proven by one group allegedly paying high taxes.

Facts don't seem to be of much use to JS80. No doubt the rich skyrocketing in income while the poor are flat prove the rich are getting screwed and overtaxed.

The Californians who are worth a damn and earning a living are taxed through the nose. The welfare leeches arent. And prop 13 has to go, but the media will put all sorts of spin on throwing grandma out of her house so that'll never happen.

 

[woolfe9999]

It is not a myth. If you are a high earner with a high cost basis on your home you are indeed taxed through your nose.

If? There are lots of ifs. In another state, you might be taxed more than in California, if, if, if. The only question is what our overall tax burden is compared to other states, and the fact is that it isn't that much higher.

My parents bought a house for $50 grand here that is now worth a million, even after the recent housing crash. They pay something like $600 a year in property taxes. They were high wage earners before retirement, but the higher income tax here was nothing compared to what they saved in property taxes. If they were able to buy a house in another state and experience that kind of appreciation on it, they would have been paying $10K-30K more per year in property taxes. They were high wage earners, and they made out like bandits living here instead of somewhere else.

The truth is, our tax structure here favors people who have lived here for a long time, and isn't so good for people moving into the state, and favors the old over the young, unless the young are lucky enough to inherit property. That could be bad or good, depending on whether we really want more people living here or not. The truth is, the property tax structure needs to be changed since it is arbitrary and inequitable, while other taxes should probably be slightly lower.

- wolf

 

[Craig234]

The Californians who are worth a damn and earning a living are taxed through the nose. The welfare leeches arent. And prop 13 has to go, but the media will put all sorts of spin on throwing grandma out of her house so that'll never happen.

One of your points is right-wing ideological junk - "Goldman Sachs makes HUGE profits, so they're worth a damn while you struggling mom and pop businesses are worthless", that's your logic.

Your other point - I'm surprised you agree prop 13 needs to go.

I'm curious why you think that, if it's for sensible or crazy reasons.

 

[fskimospy]

If? There are lots of ifs. In another state, you might be taxed more than in California, if, if, if. The only question is what our overall tax burden is compared to other states, and the fact is that it isn't that much higher.

My parents bought a house for $50 grand here that is now worth a million, even after the recent housing crash. They pay something like $600 a year in property taxes. They were high wage earners before retirement, but the higher income tax here was nothing compared to what they saved in property taxes. If they were able to buy a house in another state and experience that kind of appreciation on it, they would have been paying $10K-30K more per year in property taxes. They were high wage earners, and they made out like bandits living here instead of somewhere else.

The truth is, our tax structure here favors people who have lived here for a long time, and isn't so good for people moving into the state, and favors the old over the young, unless the young are lucky enough to inherit property. That could be bad or good, depending on whether we really want more people living here or not. The truth is, the property tax structure needs to be changed since it is arbitrary and inequitable, while other taxes should probably be slightly lower.

- wolf

Not only does it need to be changed due to its arbitrary and unequal nature, it would help prevent future budget crisis from occurring in a future recession. Property taxes are generally far more stable than sales/capital gains taxes which California uses to a greater extent than other states. This is why California's government is swimming in cash one year and bankrupt the next.

As I said, it's the CONSTITUTION people, that's what needs to be fixed.

 

[JS80]

Not only does it need to be changed due to its arbitrary and unequal nature, it would help prevent future budget crisis from occurring in a future recession. Property taxes are generally far more stable than sales/capital gains taxes which California uses to a greater extent than other states. This is why California's government is swimming in cash one year and bankrupt the next.

As I said, it's the CONSTITUTION people, that's what needs to be fixed.

No, they are bk because they spend too much money.

 

[Patranus]

Not only does it need to be changed due to its arbitrary and unequal nature, it would help prevent future budget crisis from occurring in a future recession. Property taxes are generally far more stable than sales/capital gains taxes which California uses to a greater extent than other states. This is why California's government is swimming in cash one year and bankrupt the next.

As I said, it's the CONSTITUTION people, that's what needs to be fixed.

The problem is spending not more taxes.

 

[yllus]

Not an American citizen/resident so I don't really care enough about this topic to educate myself on it, but I did catch an interesting TIME Magazine cover article on the topic that I thought I'd post here for consumption by others. The article actually makes it sound like some of California's current pains are ones undertaken for the sake of emerging in a better position later.

Why California is Still America's Future

California, to borrow a phrase, will be back. It's been stuck in an awful recession &#8212; not quite as awful as Nevada's &#8212; but it's getting unstuck. It's made nasty cuts to close ugly deficits, but it hasn't had to release prisoners or close parks, and its IOUs are being paid. Its businesses aren't fleeing to Nevada or anywhere else; Jed Kolko, an economist at the Public Policy Institute of California, has shown that fewer than one-tenth of 1&#37; of its jobs leave the state each year.

Even California's real problems tend to get magnified by its size. If it were a country, it would be in the G-8. So, yes, California has the most foreclosures and layoffs. With 38 million residents and a $1.8 trillion economy, it also has by far the most homes and jobs.

The Next Gold Rush (Green Energy)

When it comes to energy, California is not just ahead of the game; it's playing a different game. Its carbon emissions per capita are less than half the U.S. average. And from 2006 to '08, it attracted $3 of every $5 invested in U.S. clean tech &#8212; five times as much as the No. 2 state. It's by far the national leader in green jobs, green patents, supply from renewables and savings from efficiency.

It's also leading the way toward electric cars, zero-emission homes, advanced biofuels and a smarter grid: its electric utilities plan to install smart meters in every California home. It's even launched a belated battle against car-dependent sprawl, with unprecedented rules forcing communities to consider carbon emissions in their land-use plans.

California has been preparing for its clean-energy future for a long time. Starting in the energy crisis of the 1970s, California revamped its electricity markets so that utilities could make more money by helping their customers use less power. It also began enacting groundbreaking efficiency standards for buildings, appliances, pool heaters and almost anything else that needs juice. It just proposed the first standards for flat-screen TVs.

As a result, per capita energy use has remained stable in California while soaring 50% nationwide, saving Californians an estimated $56 billion and avoiding the need for 24 new gas-fired power plants. On the supply side, the state has required utilities to provide one-fifth of their power from renewables by 2010, which will jump to one-third by 2020. And California's soup-to-nuts effort to slash emissions &#8212; including a cap-and-trade regimen in 2012 &#8212; is the blueprint for federal climate legislation.

The State of Progress

Then again, California has legitimate problems that inspire legitimate criticism: gangs, sprawl, disturbing dropout rates, water shortages that don't seem to stop farmers from irrigating rice and cotton in the desert, the crazymaking traffic that Hollywood immortalized in Falling Down. It's still sitting on a fault line. Its expensive housing, even after the real estate crash, poses a real obstacle to the dream of upward mobility. So do its public schools and other public services, which have been deteriorating for years &#8212; in part because older white voters have been reluctant to subsidize younger minorities.

This gets to the one area where California really is dysfunctional: its budget. Californians generally enjoy government spending more than they enjoy paying for it, which is a national problem, but they've also straitjacketed their politicians with scads of lobbyist-produced ballot initiatives locking in huge outlays for various goodies, as well as the notorious Proposition 13, which has severely restricted local property taxes since 1978.

California is also one of only three states that need a two-thirds supermajority to pass a budget or raise taxes, a virtual impossibility in its ultra-partisan legislature. So it relies on a boom-and-bust tax base that even many liberals admit is overreliant on the rich. The state's economy actually grew last year, but its revenues crashed because its top earners had lower incomes and capital gains. That meant sharp cutbacks, especially in education, which in California is unusually dependent on state cash. "We have an incredibly dynamic economy, but we'll still end up in federal receivership if our government can't pay its bills," says historian Kevin Starr, a prolific chronicler of the state.

Fortunately, help may be on the way. Nonpartisan groups like Repair California and California Forward have built momentum for sweeping reforms that could stop the unsustainable chaos &#8212; including an end to the two-thirds rule, limits on ballot initiatives and a new system of taxation. Schwarzenegger is pushing for a gargantuan water-sharing agreement that could help prevent the state from running dry. And his potential successors are also formidable go-getters with forward-thinking credentials &#8212; including former governor and current attorney general Jerry Brown, golden-boy San Francisco mayor Gavin Newsom and former eBay CEO Meg Whitman.

Brown, the early front runner, was widely mocked as Governor Moonbeam back in the 1970s, but some of his ideas &#8212; including energy efficiency, as well as the emergency-communications satellite that inspired his nickname &#8212; no longer seem so flaky.

 

[Craig234]

Yllus, thanks for the article, I learned some things about my state. Note, there's an editing error duplicating a section.

 

[DucatiMonster696]

And we are seeing the result of 80 years of FDRs policies.
The majority of taxes collected should be collected by the state/county/city and NOT the federal government.

Funding should not be a political favor to a municipality by the federal government.

Funding should not be diluted by several layers a bureaucracy before it gets it those that are spending it.

The federal government needs to drastically cut taxes allowing local municipalities to raise their base tax rates. The only downside to this is that the federal government loses it control over the state...boo hoo...

I agree. Here's a nice little fact. California currently has 1/3rd of all welfare cases in the nation. This isn't something that happens for no reason. People folk to California to seek out public services. In San Francisco you have groups of able bodied young adult men and women who basically are homeless for no other reason then they can get away with this act and depend on public services and panhandling. On top of this madness you add in bullshit like the sanctuary city polcies which feed, cloth, house and educate illegal aliens and protect them from criminal prosecution. So who gets to foot the bill at the end of the day and clean up the mess? You guessed it the legal and tax paying city residents of San Francisco and in many cases the state of California.

http://www.youtube.com/watch?v=sIHa8QyU2Ok

 

[werepossum]

Maybe you should consider what that says about your method of argument.

Mine and half the forum, apparently, since I'm far from the only one to receive that pronouncement.

 

[JS80]

More like the state run by ri'tards.

 

[ElFenix]

Yes 6th in the nation, but the actual range is very tight. According to this data, California is .8% higher than the national average. There are a couple states with very low tax burdens, like Nevada and Alaska which are about 3% below the national average. However, the vast majority of states are within 1% of where California is. The notion that we are taxed through the nose here, in a comparative sense, is largely a myth.

- wolf

it's .8 percentage points higher but about 8% higher.