California Dreamin': How the State Can Beat Its Budget Woes

[Master Shake]

Re: California Dreamin': How the State Can Beat Its Budget Woes

Feel better now?

[Nivelles]

Re: California Dreamin': How the State Can Beat Its Budget Woes

One thing, more than anything else, bankrupted California: reducing property taxes much tooooooooooooooooooo darn low, thanks to Proposition 13.

Proposition 13 was approved by a 65% popular vote in 1978. And now, a mere 31 years later, it's suddenly making California go bankrupt?

Bullshit.

For the kids here: Prop. 13 was passed by the people during the so-called Reagan Revolution. Governor Reagan lead the tax revolt.

Again, bullshit.

Proposition 13 was enacted into law in 1978. But Reagan had left office as governor of California in 1975.

Reagan wasn't even there. He had turned to running for President, in '76 (a campaign which he lost, to Ford, as the Republican nominee.)

The "Reagan Revolution" is a reference to the Reagan Presidency, which did not begin until 1981, and that was 3 years after prop 13 passed in Cali. So that foolishness, of trying desperately to blame Reagan, is off by 3 years, no matter which way anybody looks at it. It's bullshit.

After Prop 13, homes skyrocketed in price, especially enriching the rich. The State was denied revenue, and the bill for this tax revolt was handed to next generation--- you kids now......... Enjoy.

Flaming bullshit. Flaming, smoking bullshit. Flaming, smoking, ignorant bullshit.

House prices go up, when they do, because of demand versus supply (same as anything else.) As a matter of principle. House prices are hardly ever very closely related to property tax rates, because the tax rates are always relatively low compared to the principal amount (in any normal market - not counting some place like Detroit, where economic collapse has led to instances where the sale price of a house is less than the property tax owned on it.)

However, if you're talking about assessed value, for tax purposes, that price increase is associated with false appraisals by the criminally-corrupt Cali assessor system, which persisted in trying to steal as much as possible from homeowners after prop 13 passed. Faced with a tax limited as a percentage of assessed value, they pumped up the assessed values, to still extort higher tax payments from the population.

... but the real cause of this State bankruptcy now is Proposition 13. Make no mistake about that.

Bull shit, flaming and smoking. Partisan party D'rats have been using that stupid stunt for years and years, of crapping their panties and screeching "Reagan" whenever they need to pass the blame, for something that's their own fault. The really amazing thing is, that the D'rats can still find suckers who will believe it.

[Starving Steve]

Re: California Dreamin': How the State Can Beat Its Budget Woes

Feel better now?

I do feel better now.;)

[rj1]

Re: California Dreamin': How the State Can Beat Its Budget Woes

Proposition 13 was approved by a 65% popular vote in 1978. And now, a mere 31 years later, it's suddenly making California go bankrupt?

Bullshit.



Again, bullshit.

Proposition 13 was enacted into law in 1978. But Reagan had left office as governor of California in 1975.

Reagan wasn't even there. He had turned to running for President, in '76 (a campaign which he lost, to Ford, as the Republican nominee.)

The "Reagan Revolution" is a reference to the Reagan Presidency, which did not begin until 1981, and that was 3 years after prop 13 passed in Cali. So that foolishness, of trying desperately to blame Reagan, is off by 3 years, no matter which way anybody looks at it. It's bullshit.



Flaming bullshit. Flaming, smoking bullshit. Flaming, smoking, ignorant bullshit.

House prices go up, when they do, because of demand versus supply (same as anything else.) As a matter of principle. House prices are hardly ever very closely related to property tax rates, because the tax rates are always relatively low compared to the principal amount (in any normal market - not counting some place like Detroit, where economic collapse has led to instances where the sale price of a house is less than the property tax owned on it.)

However, if you're talking about assessed value, for tax purposes, that price increase is associated with false appraisals by the criminally-corrupt Cali assessor system, which persisted in trying to steal as much as possible from homeowners after prop 13 passed. Faced with a tax limited as a percentage of assessed value, they pumped up the assessed values, to still extort higher tax payments from the population.



Bull shit, flaming and smoking. Partisan party D'rats have been using that stupid stunt for years and years, of crapping their panties and screeching "Reagan" whenever they need to pass the blame, for something that's their own fault. The really amazing thing is, that the D'rats can still find suckers who will believe it.

Starving Steve traditionally isn't one of the "smarter" posters on here.

What drove California bankrupt was they spend too much money for the tax receipts they collect.

Regarding Prop 13, I read that something like 70% of California counties had property tax revenue go down this fiscal year and that it was the first time since Prop 13's passage for that. Which means that for about 70% of California counties, Prop 13 is a non-issue.

I see that SEIU Local 1000, made up of 95000 state employees, are thinking of striking...

[Raz]

Re: California Dreamin': How the State Can Beat Its Budget Woes

I'm one of those greedy, ignorant, hate-filled Southerners who's to blame for Reagan, who's to blame for Republican ascendency in the 1980s that's to blame for everything that's wrong with America.

What's really scary to me is that every day young minds are exposed to the make-believe world of Starving Steve.

[Munger]

Re: California Dreamin': How the State Can Beat Its Budget Woes

House prices go up, when they do, because of demand versus supply (same as anything else.) As a matter of principle. House prices are hardly ever very closely related to property tax rates, because the tax rates are always relatively low compared to the principal amount (in any normal market - not counting some place like Detroit, where economic collapse has led to instances where the sale price of a house is less than the property tax owned on it.)

You are wrong about this. As Michael Hudson has explained time and again, higher property taxes lead to lower house prices.

It's really not hard to understand: a market of potential buyers can afford to pay $1000 per month on a house. If the taxes are $500, they will bid the house up to where the mortgage payments are $500. If the taxes are $100, they will bid the price of the house up to where the mortgage payments are $900. Each way they are paying $1000. The question is who gets the money - the banks or the state.

Professor Hudson discusses this concept with EJ.

Most economists – even Milton Friedman – recommend that the more efficient tax burden is one that collects economic rent – property rent, fees charged for using the airwaves, monopoly rent, and other income that is basically an access charge. If you tax land rent, for instance, this doesn’t raise the price of housing or office space. The rent-of-location is set by the market place. Taxes – or interest charges to buy such property – are paid out of the market price for using this space or natural resource.

“Rent-seeking” charges are paid out of prices. Sotaxing economic rent doesn’t add to prices. It simply collects what nature or public infrastructure spending have provided freely – site value, the broadcasting spectrum, the rights to access the internet or other technology in cases where prices exceed the reasonable cost of production. Unfortunately, despite what Milton Friedman said, the economy today is increasingly about how to get a free lunch of this sort – and how to get the government to avoid taxing it, and shift the tax onto labor and industry instead. This loads down the economy with unnecessary costs and higher prices, especially when rent-yielding assets are bid up on credit. That’s the essence of this decade’s real estate boom.

See also http://www.itulip.com/forums/showthread.php?t=966

Prop 13 has been documented as distorting the market by offering perverse incentives.

Proposition 13 thus gives rise to a lock-in effect for owner-occupiers that strengthens over time. It also affects the rental market, both directly because it applies to landlords and indirectly because it reduces the turnover of owner-occupied homes.

As a result of Proposition 13, there are obvious distortions in the real estate marketplace. For example, in 2003 financier Warren Buffett announced that he pays property taxes of $14,410, or 2.9 percent, on his $500,000 home in Omaha, Nebraska, but pays only $2,264, or 0.056 percent, on his $4 million home in California. Although Buffet is known as an astute investor, the low property taxes on his California home are not attributable to his investment prowess, but rather to Proposition 13.
...
The large effect of Proposition 13 on renters' tenure is particularly striking and suggests that longer tenure by owner-occupiers forces younger households to delay their transition from renting to owning. The authors also find that African-American households responded more strongly to Proposition 13 than white households and out-of-state migrant households responded more strongly than native-born households. From 1970 to 1990, the tenure length of African-American homeowners and renters increased by 1.3 years and 1.8 years, respectively, relative to that of white homeowners and renters. From 1970 to 2000, the tenure length of migrant homeowners and renters increased by 1.5 years and .6 years, respectively, relative to that of native-born homeowners and renters.

The effect of Proposition 13 on mobility varies widely depending on the size of the subsidy, with the largest effects occurring in coastal California cities where the increase in property values has been greatest. From 1970 to 2000, average tenure length increased by less than one year in inland California cities, but by more than two years in the Los Angeles area and by three years in the Bay area. As the authors suggest, whether the Proposition 13- induced increases in continuity and stability have been worth the cost in lost tax revenue and the resulting redistribution from inland to coastal California communities remain subjects for further research

http://www.nber.org/digest/apr05/w11108.html

Prop 13 also creates capricious taxation rates.

http://online.wsj.com/article/0,,SB1...265400,00.html

With an artificially low tax burden, prices increase and the tax burden shifts from the "free lunch" of land price increases onto labor. That the tax burden merely shifted to labor is empirically documented:

http://ntj.tax.org/wwtax%5Cntjrec.nsf/80A9A9639CDB749585256AFC007F1910/$FILE/v52n1099.pdf
http://www.ppic.org/content/pubs/op/OP_998JCOP.pdf

[World Traveler]

Re: California Dreamin': How the State Can Beat Its Budget Woes

Starving Steve, hang in there and ignore the insults. Your posts make valid points and are worth as much as anyone else's on iTulip.

Personal insults aimed at other posters do not strengthen one's arguments. Quite the contrary.

[Starving Steve]

Re: California Dreamin': How the State Can Beat Its Budget Woes

Thank you for your kind words of support.

[Raz]

Re: California Dreamin': How the State Can Beat Its Budget Woes

Starving Steve, hang in there and ignore the insults. Your posts make valid points and are worth as much as anyone else's on iTulip.

Personal insults aimed at other posters do not strengthen one's arguments. Quite the contrary.

Perhaps you should start at the very beginning of this thread and read forward. Steve insulted ME, and he knows it.

And while your at it, perhaps you should check out all of Steve's posts, especially the ones where he totally fabricates history and praises Joseph Stalin.

[cjppjc]

Re: California Dreamin': How the State Can Beat Its Budget Woes

Here is Ellen Brown's article on North Dakota

Cash-Starved States Need To Play The Banking Game: North Dakota Shows How

Wikipedia entry on Bank of North Dakota



Bank of North Dakota Site

Thanks Rajiv. Have not seen much of you lately. It seems the only real advantages North Dakota has is lower rates. I wonder if their politicians do a better job of matching spending to revenue.

[goadam1]

Re: California Dreamin': How the State Can Beat Its Budget Woes

Proposition 13 was approved by a 65% popular vote in 1978. And now, a mere 31 years later, it's suddenly making California go bankrupt?

Bullshit.



Again, bullshit.

Proposition 13 was enacted into law in 1978. But Reagan had left office as governor of California in 1975.

Reagan wasn't even there. He had turned to running for President, in '76 (a campaign which he lost, to Ford, as the Republican nominee.)

The "Reagan Revolution" is a reference to the Reagan Presidency, which did not begin until 1981, and that was 3 years after prop 13 passed in Cali. So that foolishness, of trying desperately to blame Reagan, is off by 3 years, no matter which way anybody looks at it. It's bullshit.



Flaming bullshit. Flaming, smoking bullshit. Flaming, smoking, ignorant bullshit.

House prices go up, when they do, because of demand versus supply (same as anything else.) As a matter of principle. House prices are hardly ever very closely related to property tax rates, because the tax rates are always relatively low compared to the principal amount (in any normal market - not counting some place like Detroit, where economic collapse has led to instances where the sale price of a house is less than the property tax owned on it.)

However, if you're talking about assessed value, for tax purposes, that price increase is associated with false appraisals by the criminally-corrupt Cali assessor system, which persisted in trying to steal as much as possible from homeowners after prop 13 passed. Faced with a tax limited as a percentage of assessed value, they pumped up the assessed values, to still extort higher tax payments from the population.



Bull shit, flaming and smoking. Partisan party D'rats have been using that stupid stunt for years and years, of crapping their panties and screeching "Reagan" whenever they need to pass the blame, for something that's their own fault. The really amazing thing is, that the D'rats can still find suckers who will believe it.

I don't think this is the language we usually use around here.

[Serge_Tomiko]

Re: California Dreamin': How the State Can Beat Its Budget Woes

I'm one of those greedy, ignorant, hate-filled Southerners who's to blame for Reagan, who's to blame for Republican ascendency in the 1980s that's to blame for everything that's wrong with America.

What's really scary to me is that every day young minds are exposed to the make-believe world of Starving Steve.

It is scary, but without people like you to feed them, they will die. Their existence, as annoying as it is, will be transient. Fear not.

[Starving Steve]

Re: California Dreamin': How the State Can Beat Its Budget Woes

Perhaps you should start at the very beginning of this thread and read forward. Steve insulted ME, and he knows it.

And while your at it, perhaps you should check out all of Steve's posts, especially the ones where he totally fabricates history and praises Joseph Stalin.

When I was a child of about 4 or 5 years-of-age, I would watch television in Duluth along with my grandmother and grandfather. I remember, to this day, how my grandmother cried with joy when she saw the films of Stalin's Red Army liberating Eastern Europe.

I remember to this day, and I am almost 61 now, how my grandmother cried when she saw the people dancing in the streets of Europe's cities when the Nazis were crushed on May 1st, 1945.

One of our family's relatives was liberated by Stalin's Red Army, and she somehow made her way to Isreal after the war. I don't know what her name was, but every other relative of our's was murdered by the nazis in WWII.

FDR, Winston Churchill, Charles DeGaule, and Joseph Stalin were heros in our family. And they still are heros to this day.

Our family came from Pischatch (sp?) and Warsaw, Poland. My grandparents knew plenty about the nazis and what they did in Eastern Europe, and in fact, nearly everywhere in Europe.

I worked as a planner in Winnipeg for a few years, many years ago, and I got to know many of the people of that city, many Ukranian, and many Russian. I did not find very many of the old people there, whatever their religion was, who really hated Stalin. He was a hero to those who lived through WWII, and for good reason.

[Rajiv]

Re: California Dreamin': How the State Can Beat Its Budget Woes

Thanks Rajiv. Have not seen much of you lately. It seems the only real advantages North Dakota has is lower rates. I wonder if their politicians do a better job of matching spending to revenue.

I have just been busy trying to keep the place of employment from going under. These are difficult times.!

Actually North Dakota gets much more than low interest rates -- It now has the ability to leverage its tax money as a bank (~ 12:1 at the last reckoning) as long as it lends the money out wisely -- also, interest income can be used for running the state government -- along with judicious taxing.

This results in North Dakota spending ~$5300 per capita compared to California's ~$3500 per capita in 2007. The North Dakota state budget continues to be in the black when other states are awash in red ink.

Data:
California
North Dakota

Just as an aside, the North Dakota incarceration rate was 221 compared to California's 471, and the per capita expenditure on prisons was $41 compared to $110

Also the State Income tax rates

North Dakota

North Dakota collects income taxes from its residents utilizing five tax brackets.

For single taxpayers:
-- 2.1 percent on the first $32,550 of taxable income
-- 3.92 percent on taxable income between $32,551 and $78,850
-- 4.34 percent on taxable income between $78,851 and $164,550
-- 5.04 percent on taxable income between $164,551 and $357,700
-- 5.54 percent on taxable income of $357,701 and above.

For married persons filing joint returns:
-- 2.1 percent on the first $54,400 of taxable income
-- 3.92 percent on taxable income between 54,401 and $131,450
-- 4.34 percent on taxable income between $131,451 and $200,400
-- 5.04 percent on taxable income between $200,400 and $357,700
-- 5.54 percent on taxable income of $357,701 and above.

North Dakotans who are Native American are not subject to state income tax and do not have to file a state return if certain conditions are met.

California

California collects income tax from its residents at the following rates.

For single and married filing separately taxpayers:
-- 1 percent on the first $7,168 of taxable income
-- 2 percent on taxable income between $7,169 and $16,994
-- 4 percent on taxable income between $16,995 and $26,821
-- 6 percent on taxable income between $26,822 and $37,233
-- 8 percent on taxable income between $37,234 and $47,055
-- 9.3 percent on taxable income of $47,056 and above.

A 1 percent surcharge, the Mental Health Services Tax, is collected on taxable incomes of $1 million or more, making California's highest marginal rate 10.3 percent.

For married persons filing joint returns and heads of households, the rates remain the same but the income brackets are doubled.

[cjppjc]

Re: California Dreamin': How the State Can Beat Its Budget Woes

I have just been busy trying to keep the place of employment from going under. These are difficult times.!

Actually North Dakota gets much more than low interest rates -- It now has the ability to leverage its tax money as a bank (~ 12:1 at the last reckoning) as long as it lends the money out wisely -- also, interest income can be used for running the state government -- along with judicious taxing.

This results in North Dakota spending ~$5300 per capita compared to California's ~$3500 per capita in 2007. The North Dakota state budget continues to be in the black when other states are awash in red ink.

Data:
California
North Dakota

Just as an aside, the North Dakota incarceration rate was 221 compared to California's 471, and the per capita expenditure on prisons was $41 compared to $110

Also the State Income tax rates

North Dakota



California

Once again thank you. Very informative. I remember a while ago at a closing the buyers attorney going over all the mortgage paperwork and saying "It's great to be a bank." at least three times.