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Gene
climber
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prop 13 radically shifted our revenue model away from one in which cities and counties had real power and a real purse, to one in which the state and state income tax became increasingly important. So true.
But there is more lunacy.
Since Prop 13 passed in 1978, there have been additional limits imposed on the ability to tax real property. When first enacted, all changes of ownership – except interspousal - triggered a new Prop 13 reassessment. Props 58 and 193 exempted parent to child and grandparent to grandchild transfers from reassessment. Folks over 55 can carry their previous base-year values, factored forward, to a different property under certain conditions.
Look at this: Grandma bought her house pre-1975 and paid property taxes based on the 1975 assessment, factored forward at 2% per year. Let’s say that Grandma’s house was valued at the 1975 statewide median home price of $41,600. With no subsequent change of ownership, as defined by Prop 13 et seq, and at the 2% maximum increase in assessment allowed by Prop 13, the home’s 2011 assessed value would be just shy of $85K. Grandma’s getting along in years and deeds her house to me, her favorite grandson. If I own the house – not just live in it – another 20 years until 2031, my 2031 assessment will be $126K. But of course, by 2031, I’ll be able to take advantage of the over 55 exclusion and if I sell the place and buy another in the same county at less than or equal the selling price, I get to carry my $126 tax level with me. (I sell the house at $950K and buy another at $950K or less - I pay property taxes on a $126K value.) Then, years later, I deed it to my kid or grandkid.
I love you Grandma.
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JEleazarian
Trad climber
Fresno CA
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it's not a problem because it's unfair to the ultra-rich to tax their income at a high rate or because they'll then leave the state (it's not and they haven't), but because of the resulting revenue volatility.
I agree, klk. That's what I thought I was saying, although quite a few couldn't get past my not immediately wanting to get more out of "the rich" to understand the point. Thanks for explaining it better.
I'm curious about how you apply my queues and vacancies models to non-fungible positions like NFL quarterbacks, though.
John
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JEleazarian
Trad climber
Fresno CA
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Surely, John, you would stipulate, that in difficult financial times, the rich are the only ones that are not going to be greatly inconvenienced by a small adjustment upwards in their taxes
I do agree with that, but a "small adjustment upward" won't do the trick in down years, because the highest reported incomes in California depend disproportionately on high capital gains. In a down market year, these high capital gains disappear, and a small adjustment won't yield enough income.
Unlike the federal government, California can't print money, which limits its ability to borrow during lean years, even if we didn't have the fiscal mess both parties gave us.
I also question the statements by Anders, et al. about a "massive transfer of wealth." There's been strong evidence of an increasing concentration of wealth, but wealth isn't a zero-sum game. Rather, with the advent of new technology, those who invested in that technology have accumulated wealth much faster than those who didn't. It's not that they took it from someone else; rather it's that theirs grew, while most others did not.
We also don't have nearly as reliable statistics about wealth, because other than property, estate and gift taxes, we don't pay wealth taxes, so we don't have the IRS collecting the same statistics, but that's more of a quibble.
John
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Elcapinyoazz
Social climber
Joshua Tree
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actually, it is true that the ultra-wealthy pay a vast share (the percentage varies by year) of state income tax, and that it's a problem for the budget.
And again, ACTUALLY, income tax is one tax of many. Personal income tax of all earners makes up approximtely 30-40% of the California state revenue stream. Earnings volatility among the ultra wealthy has nothing to do with the false talking point Elezarian the right wing shill is trying to fly here, which is that those lowly commoners have no incentive to see govt expenditures controlled because they have no skin in the game. Complete, utter horsesh#t.
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JEleazarian
Trad climber
Fresno CA
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Elcap:
I never said that they had no incentive, nor did I say they had no skin in the game. Rather, I said they had less incentive. And since I hear no serious proposals to change any individual taxes other than the income tax, I was confining my comment to the proposals on the table.
(I don't consider proposals to reform Prop. 13 serious proposals to change individual taxes for two reasons. First, there is too little popular support for it. Second, the only changes I see floating with any chance of success are to increase non-individual (i.e. corporate) property taxes. Who pays those corporate taxes? CEO's? Ordinary employees? Shareholders? Customers? Do tell.)
I do, however, like being the right-wing shill.
John
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klk
Trad climber
cali
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Earnings volatility among the ultra wealthy has nothing to do with the false talking point Elezarian the right wing shill is trying to fly here, which is that those lowly commoners have no incentive to see govt expenditures controlled because they have no skin in the game.
everyone i know in serious policy study and practice (and whose professional judgment i trust) believes that the revenue volatility generated by the current income tax bracketing is a serious problem and would get worse if the electorate once again decides to up the ante on the plutocrats.
i wasn't speaking to j el's other point. but yeah, the average cali voter doesn't understand that prop 13 has effectively subsidized the most feudal parts of the state's economy, including illegal immigration, while shifting the tax burden back onto the average cali voter in the form of fees.
(and yeah, i couldn't respond with a straight face to john's weird maoist idea that we should pay entry level trash collectors at the uc more than we pay the president of the system.)
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Mangy Peasant
Social climber
Riverside, CA
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ElCap, thank you for your polite response.
[your link] illustrates the level of education required to compete for an opening at said level, barring any other experience. It has absolutely nothing to do with promotion.
Since when is competing for an opening not related to promotion?
Your examples and personal anecdotes emphasize engineering positions. I'll use a term I heard up-thread: Engineering represents a "tiny slice" of the public sector payroll. The situation I describe probably doesn't apply to engineering much, if at all. It's hard to create an engineering diploma mill. So you are right, but in a very limited scope.
The diploma mills are more focused on the "softer" disciplines (management, criminal justice, psychology, etc.) And government is full of bureaucratic positions that don't require an engineering degree (I actually think government would be far more effective it were run by engineers, but we are far from that...)
The problem is more prevalent in the bloated, "administrative" areas of government, such as welfare programs (e.g. HUD, Medicaid), homeland security, civilian management of contracts, department of education, etc. Many of these federal programs have state and even local-level equivalents.
http://articles.baltimoresun.com/2011-04-28/news/bs-md-ci-school-official-degrees-20110428_1_college-degrees-online-degrees-george-gollin
Don't believe me that it's a problem? Would you believe this document? (written by a government employee, btw)
http://www.gao.gov/new.items/d04771t.pdf
This individual obtained the degree in 1996 while in the Air Force in order to advance his career. He informed us that while serving as a Lieutenant Colonel in the Air Force, he was told that he would need a master’s degree in order to be considered for promotion to colonel.
We've already established that teachers do get automatic promotion with degrees, and teachers make up a good portion of the (state) budget payroll. That fact alone discredits the idea that my claims are completely bogus. The claim is absolutely true for a big chunk of the state payroll. The extent and cost of the problem in other areas of government is not as clear-cut, but it is a problem.
The report I included above is from 2004, and the federal government has taken steps to eliminate employees from completely non-accredited schools. So there has been progress. But my original claim (the one that you so objectively considered) is that a disproportionate number of government employee degrees are from accredited, but lesser-quality schools. The accreditation process is not trivial, but many schools today make it their business model to "squeak by," and betray the whole point of the accreditation by relaxing the standards in practice. In other words, it's damn-near impossible to fail out of some of these schools. And a lot of government employees are enrolled in them.
But, if you still want to dismiss my arguments, all you have to do is answer one basic question:
If these degrees don't help people get raises, then why do people get them at all?
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Mangy Peasant
Social climber
Riverside, CA
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Look at this: Grandma bought her house pre-1975 and paid property taxes based on the 1975 [...]
I love you Grandma.
Good one Gene!
Yes, Prop 13 (and its cousins) creates a class of tax-exempt "old money" in CA.
However, I've seen numbers on this, and it turns out that very few houses are still being assessed at 1975 rates. So, although it is an outrageous loophole, it's not a huge problem in the bigger scheme of things.
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pyro
Big Wall climber
Calabasas
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california may be broke and i can't explain why.
PLEASE BUY MARIJUANA IT WILL SAVE OUR STATE!
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klk
Trad climber
cali
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mp, i would love to see something like data on percentage of students at for-profits who are cal state employees (or for that matter, federal employees). but no one seems to have any, and what studies ive read on the for-profits (ive been following the series in the che) don't seem to have any data on that issue either.
the two links you give us aren't too helpful, either.
the first is a link to the case of someone in the baltimore k-12 system who had falsified his resume. shocking, i'm sure (who would expect to find corruption in baltimore?), but not exactly on point.
the second link is an investigation done (by a federal employee) of the use of mill diplomas in the federal govt. the report could only verify 463 cases. i can easily imagine that the figure is (as the investigator insists) "under reported," but 463 out of tens (hundreds?) of thousands hardly constitutes an epidemic. moreover, according to this report, the vast majority of those folks (257) were in the Dept. of Defense. (shocking, huh?) the next largest group, 35, was in DoE.
there is no evidence here, of any sort, for yr apparent belief that welfare moms going back to for-profit schools and then onto the cal state labor dole are a major source of 1. california's budget problems or 2. the rise of the for-profits.
so far as yr other complaint, that teachers are rewarded for continuing education, i see no evidence that most of that, or even a big chunk of it, is happening at diploma mills. that might well become true, esp. once we finish gutting the cal states, but i can't find any evidence that it's true now. indeed, if i'm not mistaken, teachers aren't allowed to claim CMEs from unaccredited universities.
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Elcapinyoazz
Social climber
Joshua Tree
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Since when is competing for an opening not related to promotion?
When it is an initial entry into the system.
I would add that you seem to have no knowledge of time-in-grade requirements WRT to promotion. This is tiresome.
You cite a source that found 400-some cases...out of over 4 MILLION federal employees(which is less fed employees than we had in the 1960s, 70s, 80s and half of the 90s, btw). That is 0.01%, one in ten thousand.
Your "argument", is a joke.
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Dave
Mountain climber
the ANTI-fresno
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"
Aug 31, 2011 - 10:12pm PT
I work in a mine. I don't get hazard pay.
I notice you don't say what you get paid, which I'm sure is very high considering there is no educational requirement. Thats your "hazard pay"
It's always amusing to hear the high school dropout construction/oilfield/mine workers crowing about not needing any education to make the big bucks. All they need is gumption!
Good luck sitting out the next price slump in whatever mineral you mine. Do you go welfare or "man up" and bag groceries?"
Yeah, and I'm not going to say what I'm paid. I will say pay scales are highly variable between locations, type of work, and method of payment. Some guys could do better in town as waiters, others who've done it all and been mining their entire lives at some mines make more than the mine manager. I'll also say you might try it before you talk about something you know nothing about.
The requirement to work at our company is a high school diploma or GED. Other places sometimes don't require that.
Why is it amusing to hear about people who do real, dangerous work, as opposed to fatty and others sitting at desks providing services, talking about not needing an education to make good money? A degree doesn't make you smart and capable, your own talent and experience does.
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Dave
Mountain climber
the ANTI-fresno
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You could complain about it, or you could do something about it.
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August West
Trad climber
Where the wind blows strange
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Everyone paying their fair share is reasonable.
Raising taxes to compensate for poor fiscal management and policy is not.
If you have bad politics (and I would put prop 13 and many other props in that category) that leaves you in a fiscal mess, the only answer is gutting spending? Doesn't matter who it hurts. Shut down the University of California (no investment for the future)? Let our interstates fall apart. No earthquake preparation, etc. No spending on anti-terroism? Hell, just get rid of the military? Am on the right track?
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August West
Trad climber
Where the wind blows strange
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Many of you would be surprised as to how few tax "loopholes" really remain. The "rich" tried opening foreign accounts with UBS, but the IRS caught on and are now settling/prosecuting the taxpayers.
Yea, well when you don't pay much straight up tax, who needs loopholes. It's like Buffet pointing out his tax rate (sans deductions) is the lowest in his office since capital gains tax is so much lower than salary.
And corporate taxes have a lot of loopholes. The corporate rate is almost 40%, but yet corporations are only paying a little over 20%. That is a lot of loopholes.
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nick d
Trad climber
nm
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I'll also say you might try it before you talk about something you know nothing about.
I grew up in the oilfields and I know more about "it" than you apparently do since you don't seem to have been at it long enough to have been through the inevitable downturn.
And by the way, the most dangerous jobs in the lower 48 are those in convenience stores. Your mining job is safer than working at a 7-11.
edit: Fatturd has to be the most disingenous pos on the board. I'm sure the ride-a-long you went on was super dangerous. I'm just amazed you weren't killed. Prototypical lying GOPr.
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klk
Trad climber
cali
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Your mining job is safer than working at a 7-11.
unless it's coal, maybe. three close relatives died of complications from black lung, another had his back broken in a long fall. and another is now longboarding, so he spends each and every shift bent over at the waist so he can fit in that frickin 4' shaft.
driving a monster rig in one of those open pit deals looks like a lot more fun.
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Splater
climber
Grey Matter
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Topic Author's Reply - Sep 1, 2011 - 07:01pm PT
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>>>Grandma bought her house pre-1975 and paid property taxes based on the 1975 [...]>>>$41,600. at the 2% maximum increase in assessment allowed by Prop 13, the home’s 2011 assessed value would be just shy of $85K
Actually there are years like 2009-10 when Grandma's assessment will decrease just like everyone else's. 2% is only the max increase. It changes by the lessor of the 2% figure, or the change in CCPI, the Cal Consumer Price index, which can even be negative in down years. There have been 6 years when the increase was between 1 & 2%, and one year (2010) when the CCPI actually went down by .237%. So Grandma's assessment will be something like 5-6% less than $85K. which will be passed to her Rich heirs. (By any sane definition, anyone who inherits a house is rich).
>>However, I've seen numbers on this, and it turns out that very few houses are still being assessed at 1975 rates. So, although it is an outrageous loophole, it's not a huge problem in the bigger scheme of things.
I have been looking at houses on Redfin and sdlookup and I see houses all the time that are only paying 1/5 to 1/10 of full assessment market value. Any house that has not been sold and reassessed at market value since 1984 is indeed a HUGE problem (of unfairness). And homes from 1985-2000 are just gradually less of a problem in terms of prop tax subsidy.
To change Prop 13, we don't need to increase every house to market assessment. We could just do that for commercial property. The residential prop tax change could be made revenue neutral, by just changing the state tax rate for each home to something like .5% instead of 1%.
Other ways of rewriting it to protect "grandma": limit the delta between market value and assessed value to $200K (indexed), with a limit of one parcel or home per household. Eliminate all inheritance of subsidy, except married couples. Eliminate all age 55 special loopholes. If someone over 65 (not 55) can't pay even with the $200K exemption, they can take out a reverse mortgage or the state can effectively do that with a
lien in which they collect the past taxes due when the owner dies.
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nick d
Trad climber
nm
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Working in industry you are more likely to get hurt, working at the 7-11 you are more likely to be killed.
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