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Some hot political topics around a Bento box

40 comments

Had lunch yesterday here in Oakland at Ozumo (fantastic Japanese food) with Nancy Light and Gladys Horiuchi, two friends from Wine Institute. I’ve known both for many years; Gladys, communications manager, has always been so helpful to us working reporters, and Nancy, communications director, handles what much be a stressful job with poise and lightness. I asked them what’s up these days at W.I. and they said the #1 and #2 priorities for the institute and Robert Koch, the president and CEO, are defeating HR 5034 and, here in California, defeating Proposition 25 and passing Prop 26.

They asked me if I was writing about HR 5034 and I said no. There are bloggers who know far more about it than I do — Tom Wark obviously is one — and why should I weigh in on a topic about which I am less informed than others? It’s distributors that are behind the HR 5034 threat. The entire wine, spirits and beer industries are united against it, Gladys and Nancy explained. It’s a non-partisan issue, with Democrats and Republicans both for and against it. It’s clear that the anachronistic distribution system is breaking down and will dissolve one of these days, but the wholesalers, who are a very powerful special interest, will fight tooth and nail to preserve it. Bobby Koch apparently is spending a lot of political capital and money to defeat 5034. More power to him.

As for the California propositions, 25 essentially would allow the state to raise taxes and fees with a simple majority vote, instead of the 2/3 supermajority now required. True, the initiative’s sponsors claim that the 2/3 threshold would be maintained in order to raise taxes, with the simple majority needed only for passage of a state budget. But this seems like a complicated and potentially slippery slope these days, when municipalities are scrambling to find every dollar they can. If the state can pass a budget with a simple majority, it seems obvious that taxes or fees or whatever you call them could be increased on alcoholic beverages, including wine, with a simple majority. And with the wine industry in such a fragile state, that’s the last thing we need. So I’m voting no on 25, even though that puts me in the company of conservatives. Most liberal groups are in favor of Prop 25.

Prop 26 would lock in the 2/3 supermajority and make it pertain not only to taxes but to the kinds of fees imposed by local governments, e.g. hazardous materials fees or fees on alcohol retailers. This is a complicated issue, since it has to do with the difference between a “tax” and a “fee,” and it also calls into question the power of the California Legislature to interpose itself into strictly local budgetary affairs. To the best of my understanding, if Prop 26 passes, the state would have to approve, by a 2/3 supermajority in the Legislature, any California taxpayer paying a higher tax on anything, with most “fees” being re-defined as taxes. That means, for example, that if San Francisco decided to pass a nickel-a-drink law, the California Legislature would have to sign off on it by a 2/3 supermajority.

Once again the pro-26 crowd is largely the business and anti-tax community, while those against it argue that it will help Big Oil and Big Tobacco. I wish it was easier for average voters like me to penetrate through the fog of political ads, arguments and counter-arguments and to know how these propositions really do or don’t address the issues. It always seems like a guess. I’m not entirely comfortable voting no on 25 and yes on 26, but I will.

  1. I would ask my good friend to reconsider his stand on Prop 26. The need for a super-majority passed by the State Legislature may prevent a nickle-a-tax on drinks law but it will also stymie every single useful and important measure in the State.

    You have seen how the Legislature cannot do its own work. What do you think will happen when it is asked to approve such simple things as Library late fees, parking meter fees, etc.

    We probably should not be discussing politics here, especially silly local politics, and while I disagree with you about Prop. 25, I find Prop 26 to be dangerous legislation of the type that is intended to essentially destroy the ability of local communities to run their lives. The State has no rational reason for being in the approval of local fees in the first place, but to now require a 2/3 majority is to essentially end the power of local government to run its own local business. Sorry, old buddy, but I think you are wrong on this one.

  2. Greg Brumley says:

    One may logically argue that the nation’s — indeed, the western world’s — financial crisis was born in California.

    As a non-Californian who lives here, I can’t muster up much sympathy for the problems California brought on itself. Particularly, since the apparent motive was greed.

    Look, let’s be brutaly honest: Californians wanted to enjoy soaring property values without paying their fair share of residential property taxes. That’s what Prop. 13 was all about.

    The last figures I saw were that Californians pay a .5% to .6% residential property tax, on average. The rest of the country pays 1.5% to 4%. The only states with rates below California’s are the dirt-poor states of the deep south (Mississippi, Alabama, Louisiana, etc). Please note that this disparity holds true in comparison to places like Boston and Washington and New York, where home values are as high as the Bay Area’s.

    Were Californians paying their fair share of property taxes, their state and city crises would not exist. Moreover, the housing crisis may not have existed, since rational property taxes would have held down property values and made irresponsible mortgage schemes less tenable.

    (Let me be clear: I do not include agricultural and business property in this analysis. Because farms, vineyards and other businesses generate taxable income and create jobs, their property taxes should be low.)

    Now, Steve, you want to join the flock of sheep being led around by the Republicans with their Tea Party dogs nipping at your hooves?

    If you freeze taxes while the number of taxpayers dwindle, what are you willing to give up? Will you give up more police and fire protection, a trend already well in motion across the State? Will you see our school children without athletics and arts programs? (in a State which already shames itself by spending more on prisons than on educaton.) Are you willing to see highway and bridge conditions deteriorate further? Perhaps you’ll be willing to give up effective enforcement of pollution controls? How about other public health protections?

    The Republicans are very good at playing to fear and greed. Have they offered you anything approaching a comprehensive plan to replace the government services you’re going to lose? No? I’d think anyone would want to give that problem careful consideration before voting “no” on 25 and “yes” on 26. Especially over an extra nickel for a drink.

    OK, I’ll take my curmudgeon crown back now.

  3. Steve, for the Chamber of Commerce types the sky is always falling. Most States pass budgets and approve new taxes and fees with a simple majority. I see no evidence that business are fleeing those obviously Socialist enclaves and moving to CA because we require a super-majority to do the same.

    I think the super-majority requirement allows our politicians to sit in their ideological corners and do nothing. We all are held hostage by the tyranny of the minority. I believe that if budgets, fees and taxes required a simple majority to pass there would be more deal-making not less, and our politicians would have to be more accountable and accessible to their entire constituency.

    I agree with Greg that Prop 13 has been an absolute disaster for California. It was based on a morally and ethically bankrupt ideology: “I got mine and the rest of you can just screw off.” Which arises from an even bigger ideological failure: supply-side economics, and all its bastard children. Anyone who thinks less taxes and regulation makes for more jobs is living in a fool’s paradise. The reality is right in front of us: less jobs in pursuit of higher profits, and greater concentration of the nation’s wealth in fewer hands. Depriving government of the money needed to operate will never make government smaller, it will just cause it to fail – just like it does any business. As we are seeing.

    Steve, how is it in your economic self-interest to support fewer jobs and failed government? I guess you can tell how I will be voting next Tuesday.

  4. Nick Palumbo says:

    John,
    Who do you work for? Obviously not private enterprise. As for me, I refuse to bite the hand that feeds me. Less taxes and regulation is creating plenty of jobs, just look overseas. Even the “big boy’s” in the wine industry are flocking to Chile, Argentina etc to start very succesful and high quality brands. If I were to consider a mid to large sized winery I would certainly look to those counties, out of reach of your own greedy hands that have never seen a hard days work.

  5. Hey Nicky – way to make it personal. Whose hand is feeding you – who are you indentured to? If you ever come to Sonoma I will have one of my employees pour you some of the wine I have made with my own hands from grapes I have grown. I drive tractor, forklift and flatbed, I maintain and repair our winery equipment, do my own punchdowns and schlepp barrels. My workweek is 60-80 hours. This is the third company I have started and the fourth I have managed. Before I became an entrepreneur I was a chef, a welder, a research scientist, a wine retailer and a journeyman winemaker working for 50,000 cs to 350,000 cs wineries. So perhaps you ought to rethink your last statement.

    Funny you mention Chile and Argentina – two countries that have experienced strong economic recoveries and growth under left-wing governments. It will be interesting to see how the recently-elected right-wing Piñera (a Pinochet supporter) can manage to screw things up for Chile in order to further enrich himself and his cronies.

  6. Nick Palumbo says:

    John, just John,
    Your assumption is that “left-wing” governments is the answer. Wineries are taking their business there because of the cost of doing business not because of the type of government. Good news is we get to vote on it but it seems we will cancel each other out on this one. I just hope you don’t feel the same way about HR 5034. We have more in common than I thought with possibly one (other) exception. I have close family that owns a major beer distributor in So. Cal. It is certainly a challenge to discus the three tier system with them. As for my personal position, I also own my business and my hands are currently stained from tractor grease and fermentations.

  7. Greg Brumley says:

    Very nicely written, John. Any chance you could get Nick to come work with you for a day? I’ll do punchdowns, if I can come watch.

    Nick, I hate to burst your I-only-watch-Fox-News-because-it-tells-me-what-I-want-to-hear bubble. But the “low taxes = more jobs” scam is a myth.

    Of the 10 states with lowest unemployment, 4 are among the 10 most-taxed. Nevada, which all right-wingers have touted as a model of low taxes and low regulation, leads the nation in unemployment.

    Are you in the telecommunications industry, Nick? If so, maybe you can tell us how the US economy has benefitted from all the jobs that industry exports to India. Undoubtedly from the wonderful service we American consumers enjoy from those Indian outsourcers.

  8. James McCann says:

    Greg,

    Obviously Prop 13 has been a mixed bag, but it did not cause the budget problems, it was a reaction to existing budget problems of the 1970s. By that time, 15% of CA’s workforce was in the public sector, government spending per rate of personal income was much higher than the rest of the country, and retirees and lower income families were forced to leave their homes as property taxes increased dramatically.

  9. Mr. Palumbo – respect. Good to hear that you work with your hands. I had wondered if you might be in financial services or SEO marketing. I think you would be surprised how nuanced my positions are. I do not assume that left-wing governments are the “answer.” On the contrary, I was simply pointing out that left-wing governments are not necessarily the impediment that the Right in this country has painted them to be.

    I am dead against HR5034. I see it is special pleading from narrow corporatist interests for an exception to compliance with the Constitution itself to avoid competition.

    I care what happens in our State. I am a 3rd generation Californian. Incidentally my father’s father retired as VP of Crocker Citizens Bank and to his dying day could be provoked to apoplexy by any mention of FDR. He and I had some interesting conversations.

    I was here when Prop 13 passed. I was not fooled by appeals to sympathy for people being driven out of their homes by rising property taxes. To this day I believe there were better targeted remedies for allowing low-income families and seniors to stay in their homes without resorting to the amazingly blunt and simple-minded approach of Prop 13.

    I repeat, depriving government of the monies needed to operate will not make it smaller. It will fail. We need to be able to pass a State budget. Local governments need to be able to raise revenues for the services we rely on. How many corporate boards require a super majority to approve a budget? None that I am aware of.

  10. My goodness, Steve, I do believe you have trumped Juan Williams whose thoughtful comment on Lib intolerance is obviated in the above responses.
    Whatever your vote, it will be the correct one. Great County, America.

  11. The State, or government, is not the entity Ferdinand Lassale, the father of the Welfare State, predicted: “God and Santa Claus at the same time”. The State does not possess “inexhaustible funds at its disposal, which can be used to make all citizens prosperous and happy. Neither can it provide security for everyone from cradle to grave”.
    In reality, “the State is the social apparatus of coercion and compulsion, and its characteristic mark is that it has, within a definite territory, the exclusive power and right to resort to violence. (Mises, Ludwig von)
    “Entrepreneurs should be free to make their own decisions and then to benefit, or suffer the consequences. [We] must insist that governments not interfere with voluntary transactions among private [and consenting] individuals”. (Bien Greaves, B.)
    Lastly, “the government is best which governs least”. (Jefferson, Thomas)

  12. James McCann says:

    My God, do I actually agree with Steve on a political point? Echoing Ray’s point above, whatever you choose to do, by having studied an issue and making an informed decision, you cannot make a wrong choice.

    I do believe that sometimes we overthink these issues, instead of asking ourselves “what is the right thing to do?”

  13. Greg Brumley says:

    James,

    Property taxes increased prior to Proposition 13 because property values increased.

    The good people of California chose to opt out of their responsibilities to pay a fair share of taxes on homes which were doubling in value every 5 years.

    Now, the piper arrives with the bill.

    The real problem is not taxes, it never has been. The real problem is that the middle class has been so pounded by decades of reduced buying power (while the top 1% has seen its share of national income nearly triple) that they’ve tried to maintain their standard of living by borrowing against their homes.

  14. James McCann says:

    Greg,

    By your logic, my property taxes could increase from $10,000 to $20,000 per year in five years, and then to $40,000 in another five years?

    How about fiscal responsibility from the politicians? Taxes have never been a problem? Seriously? Where is it written that taxes have to rise because property values rise?

  15. James, may I please add “personal responsibility” to your fiscal solution mixture? Although we all have an obligation to care for the young, the old and the infirm, there will always be those able bodied who would have others do for them (without choice) what they are unwilling to do for themselves. Would that they could replace their envy with admiration and get on with a balanced and productive life. We all matter.

  16. James McCann says:

    Ray,

    Amen.

  17. Greg Brumley says:

    James,

    To have a $40,000 property tax bill, according to the California averages post Prop. 13, you’d own an $8 million home. If you owned an $8 million residence, and couldn’t afford the property tax, may I suggest you sell the home so you can afford to pay your bills, including the property tax?

    “Where is it written that taxes have to rise because property values rise?” you ask. If you own stocks and their value rise, don’t you have to pay for that increase in value when you sell? If you own a car and its value decreases, doesn’t the tax on the car also go down? Don’t hear you complaining about that.

    In the real world, cars and houses and other property have always been subject to use taxes based on their values (and, in the case of cars, the burden they place on public resources like roads).

    When one realizes a bonanza of increased home value (which he did nothing to earn), why shouldn’t one pay one’s fair share on the increased wealth?

    To those who aren’t willing to pay taxes on the true value of their homes, please answer two questions? (1) If you don’t pay that extra tax, who should pay it in your place? (2) Are you willing to give up police & fire protection, are you willing to see your community’s education suffer so you can save on property taxes?

    That is what’s happening, isn’t it? If the home owner doesn’t pay his share, somebody else has to. Cities and school districts are already laying off officers and teachers. If not for Prop. 13, there could be another $15+ billion a year to solve the fiscal crisis.

    The problem with those who “vote out” taxes is they never have a better answer. That’s why I began with the word, “greed”. They neither know nor care who shoulders their burden — so long as it isn’t them.

    They never offer a solution as to how local government might be more effective and more efficient. That’s always somebody else’s problem.

    But they have been effective. In the 30 years since Reagan, they’ve succeeded in gutting the American middle class. And that is killing our country.

    American workers have, for years, become more productive every 12 months. Over the same time period, their buying power has declined year after year after year. They’re less and less able to buy a home — certainly without betting their futures on some sort of sub-prime mortgage scam.

  18. “Where is it written that taxes have to rise because property values rise?” It’s written in real-world economics. A rise in property values (without an infusion of extra capital) is an example of very real inflation. If it takes more dollars to buy a thing – especially a thing that should be actually losing value from age and use – then the real buying power of those dollars has dropped. The real costs of goods and services have gone up accordingly, not just for you and me as individuals but for all of us through our government as well. Our governments are struggling to provide the services we demand of them – as well as to maintain (much less improve or increase) the common infrastructure – because their buying power has decreased too.

  19. James McCann says:

    Greg,

    You don’t seem to understand how local taxes work. The value of a particular house is only relative to their percentage of the total tax burden of the town. For example, if a town’s grand list increases dramatically because of new development, it is possible for individual tax burdens to fall, regardless of any increase in their property value. If the value of real estate in a town increased dramatically without any increase in service burden to the town, would you really have everyone pay more taxes even if the town doesn’t need the revenue? (This happens in the real world when a new train line links a suburd to an urban center, thus increasing home values)

    John,

    Real estate values are not pegged to the consumer price index, or any other measure of inflation. Note that while real estate plunged in recent years, gas, food and other staples increased.

    John and Greg,

    The great thing about those who fight for tax decreases (or the slowing of their increase) is that they apply to everyone. In my PA county, we have great schools, fire and police departments, and we often run a surplus in our local budgets. My property taxes went down by over $1000 this year, and next year they are projected to only rise slightly. There are thousands of communities around the country that spend the taxpayer’s dollars in a responsible manner, and where town managers do not earn $600,000/year. I can assure you that in those communities you do not have people running around yelling about a “fair share.”

  20. Greg Brumley says:

    James, there seem to be great differences between California and Pennsylvania — not the least of which is how property taxes are levied.

    There are also reasons your public — and private — employees earn so much less.

    Enjoy your winter.

  21. James McCann says:

    Greg,

    I will, my favorite season. I knew it was only a matter of time before this is what you resorted to…

    People who want and work for responsible goverment are not greedy.

    I disagree with Steve about almost everything politically, but you and John attacking him for suggesting that it should be harder to raise fee (taxes) was a terrible knee jerk reaction.

  22. Greg Brumley says:

    James,

    People who opt out of paying their fair share see “responsible government” as allowing them to do that. If Prop 13 weren’t robbing California of $15+ billion a year, you might have something to talk about.

    As a right-wing Republican, you equate cutting YOUR taxes with responsibility, but you’re unwilling to answer the two questions I posed earlier: (1) If you won’t pay for the government services, who should? (2) What services should Californians cut to meet your “austerity” concept?

    You see, that’s been the problem for right wingers from the John Birch Society to the Libertarians to the Tea Party: It’s always about somebody else paying for your “austerity”.

    Right wingers are big on tax generalities, but never have specific solutions. So, give us a SPECIFIC answer: Exactly which public services do you feel Californians should give up, in order to freeze taxes (which is the effect of props 25 and 26)? And, while we’re at it, how many more teachers policemen and firemen are you willing to lay off in the process?

    Aren’t you the guy who believes wine wholesalers really aren’t the ones who support government liquor stores and HR 5034? You believe it’s the unions! What would you Republicans be without your boogeymen?

    Steve is a bright fella who loves the wine industry. The very fact that he agrees with you should give him cause to rethink.

  23. James – I find I am often in agreement with Steve politically, which is why his “hold his nose” support for 26 and rejection of 25 came a bit as a surprise. I’m not sure how you can construe my comments or Greg’s as an attack.

    I note that PA does not require a supermajority to pass a budget or to raise taxes. Your taxes are lower than here in CA, and your State does not appear to find it any easier to raise new revenues to pass a balanced budget than we do.

    This example of simple majorities not being able to raise revenues or pass balanced budgets in PA – as well in as 2/3 of the rest of the States – suggests to me that the push to require supermajorites is an ideologically driven solution in search of a problem.

  24. James McCann says:

    This is getting tedious, but what the hell:

    You keep using the word “fair share”, but what does that really mean? My wife and I pay more federal income taxes than the bottom 47% of American households COMBINED. Is that a fair share? Is fair share defined by whatever your local government says they want from you?

    1. I do, and CA citizens do pay for government services. Fiscal conservatives want EVERYONE to pay less, it is NOT about our own austerity, it is about everyone’s austerity. Governments across the country make tough decisions to figure out how to allow people keep more of their hard earned dollars.

    2. They should cut whatever it takes to balance the budget, and then use that as the new baseline. NJ would be happy to loan you Gov. Christie for a few days to show you how this is done.

    1a. Same as #2 above.

    2a. I wouldn’t lay off teachers and firemen, I would fire the army of failed administrators and reduce salaries. It’s what happens in the private sector.

    The unions are on record as being against privatization of government stores. Google it. The wholesalers in control states are small, often marginally profitable operations, and would grow and gain tremendously by privatization. (This is not a disputed fact)

    I am on the record from the very beginning as being against 5034, which or course the wholesalers are behind.

  25. James McCann says:

    John,

    I don’t disagree that it is ideologically driven. But I do think it is a reaction from people who are sick and tired of the government putting their hand back into their pocketbooks. I, and other fiscal conservatives that I know, do not want to shut down the government. We do want them to squeeze every ounce of services they can from every penny we give them. When they don’t, they should be booted from office as opposed to just handing them more money to mismanage.

    In PA, the budget votes are brutal to even get to a majority, and frankly, if it was a super-majority, there would not be a budget. Those battles, which happen because we are a very evenly divided state politically, save the taxpayers money every year in the process. In other states where the legislature leans significantly in one direction or the other, a simple majority means one party puts together a budget and to hell with the voters and the minority.

  26. Interest payments on municipal bonds are generally exempt from the federal income tax. State and local debt is thus tax-favored over private debt, creating an economic distortion. Debt issued to finance government schools, airports, parking lots, and other facilities is favored over
    debt to finance similar private facilities. Thus, tax law encourages monopoly government ownership and is biased against private-sector competition and innovation.
    There is an ongoing trend to securitize future federal aid for highways, housing, and other items in “grant anticipation” debt. Federal aid has long spurred overspending by the states but debt innovation exacerbated the problem.

    Californians pay over $60 billion more in income taxes alone to the Federal Government than they receive back in federal dollars. They run a massive deficit with the Social Security Administration as well; in spite of California rank as 46th in percentage of population over 65. California lavish public-employee pensions can bankrupt the state.
    “California consumes three times as much energy as it produces, and when oil and natural gas prices rise, states like Colorado see a cascade of earnings, revenues, and royalties flow into their state. Whereas states like California see a cascade of capital flow out of state.” (Boaz,D.)
    The slowing economy has reduced revenues, but excessive public spending remains the root cause of California’s persistent financial troubles. “The state has nearly tripled spending since 1990 (doubled in per capita terms). It went on a spending binge during the dotcom boom and never adjusted to the lower revenues after the bust. During the Schwarzenegger years the state has increased spending twice as fast as inflation and population growth”. (Cato)
    One cannot confuse the people and the businesses of California with the state government. There’s no clear and direct relationship between the two.

  27. Greg Brumley says:

    James,

    The failures is your argument are these…..

    You say you and your wife pay more income taxes “than the bottom 47% of American households COMBINED”. I assume you mean the bottom 47% on average. Even so, why shouldn’t you? If you make that much money, you should pay more. If, however, you’re like the upper 1% on average, you pay a 15-22% actual tax while the guy making $25,000 pays over 30%

    In a major recession, you want a balanced budget? But, of course, you wouldn’t fire public safety officers and teachers to get it. That’s the Republican scam, again. To make ends meet, California governments ARE firing teachers and fireman and lawyers now. Somehow, in your “balanced budget” fairytale, that would all end WHILE state revenue declines.

    Speaking of balanced budgets, what did you Republicans do when Clinton wiped out the deficit? You wasted it on warmongering and welfare for the top 1%.

    Taxes didn’t put our country in this mess, you Republicans did. And you have not an ounce of shame.

    Your claim that fiscal conservatives want everyone to pay less is belied by the fact that “fiscally conservative” politics is bankrolled by people who, like the top 1%, don’t pay their fair share. Fortune 500 CEOs, Wall Street traders, the big banks, the oil companies. And your complaint that you pay more income tax (in dollars, not percentage of income) than 47% of Americans indicates you believe that, because you make more, you should be obligated for a smaller percentage in taxes. Again, if the everybody-pays-less argument had not come on top of Prop 13, which assured homeowners DO NOT PAY THEIR FAIR SHARE of their increased real estate values, you might have an argument.

  28. Okay, let’s put this one to bed.
    I want to see w-2s and 1099s and 2009 tax returns(Gross and AGI) from both James and Greg. The government doesn’t spend percentages. I’ll bet that James’ 15% equals more actual teacher/firefighter pay than Greg’s 30% This dispute actually bodes well for a flat tax for every citizen? G’night.

  29. James McCann says:

    I was trying to make a point, that flew way over Greg’s head, as expected. The bottom 47% of American households pay NO federal income taxes. I paid a little over 52K in federal income taxes last year. Add in local, state, property and sales tax, and we were pushing 75K in taxes. Sorry I am so selfish and will not pay my fair share. My wife and I both have good jobs, but we are not rich. We give significantly to charities, but, contrary to left-wing beliefs, we do not deduct any, because our income is too high to allow it. (Which is fine by us, we enjoy helping others.)

    Greg, thanks for spelling out what “fair share” means to you. I will continue to create jobs, pay taxes, and enjoy the wonderful school system and services we have in my county through the fiscal responsibility we’ve demonstrated through the years. Who knows, maybe we’ll even hire a couple of extra policemen or firemen, IF WE CAN AFFORD IT.

    THE GUY MAKING $25K PAYS HOW MUCH IN FEDERAL INCOME TAXES? Thank Republicans for that non-existent number.

    The top 1% pays over 38% of the taxes. Those damn slackers better get their act together!

    And yes Ray, I would love a flat tax, because if the lower half of households paid federal income taxes, the Democrats would quickly see their base erode, as everyone would want to know where their money was going, as opposed to where it was coming from.

  30. James McCann says:

    Sorry Ray… left out the numbers.

    Gross was 270K, AGI was 211K, but of course we are hit by AMT, and we pay $52K+. (Federal only) By my math that is 19.3%. (Federal only) Through hard work, our numbers will be way up this year, but our taxes will be as well. We don’t begrudge the government that money, but we do seek to hold them accountable for every penny.

  31. James, looks like you could use some accelleratd depreciation? You may wish to try winegrowing (maybe Petite Manseng?) thereby reducing your AGI to effect a federal tax rate of under 10%…… like the rest of we slacker farmer/wineries. Have a swell holiday season, you have obviously earned it.

  32. James McCann says:

    Thank you Ray, I’m thinking about throwing in a little Vidal Blanc on my 1/3 of an acre and declaring myself a farmer. I think the deer might like that.

    Enjoy your holidays also.

  33. David Harlow says:

    Greg, I don’t like to single out any one person, but in this case, since you have deemed everyone else a Right Wing Republican, it is fairly easy to assume that you are a Left Wing Moron, probably from San Francisco… Let’s examine why….

    1. Prop13 – First of all Prop13 came about because California enjoyed property values that soared in value SO quickly. NO other state can even come close to the amount of increase, and certainly not in the speed in which a house could double or triple in value. The only thing you have said that was correct was: “If you own stocks and their value rise, don’t you have to pay for that increase in value when you sell?” The key words are “when you sell”. If my house increases four-fold in value (which it has), I will pay my share of taxes on the four-fold increase, just as I would in stocks, cars, or any other asset. If you have a stock portfolio worth $10K, and it goes to $40K over a 3 year period, did you pay taxes on your increased VALUE? No, but you will when you sell it. Because my home value increases, does not mean that I should have to come up with thousands of extra dollars each year….did my income suddenly change too….??? NO!

    2. “Fair Share” – As James or Ray mentioned, a Flat Tax is the real answer. Your ridculous argument of somebody making $25K, paying 30% tax is a moronic statement. For a single person, the listed tax rate for 2010 is 15%, but if they have a wife a couple of kids, it is 0%. If everyone paid a 15% flat tax, with little or no deductions, then your argument for everyone doing their FAIR SHARE would be legitimate.

    3. Why we are broke – The biggest reason that California (and the U.S.) are bankrupt is NOT from a lack of taxes, although if EVERYONE paid taxes, it could be less of an issue. It really comes down to RIDICULOUS government overspending, across the board……from all the free handouts that ENABLE people to collect checks from the government, while they sit home all day watching Oprah on their 50 inch flat screen TVs, to all the SUPER ridiculous pay plans, pension plans, health care plans for ALL government employees. Go read up on that, and try to convince anyone to “feel bad” for them. If you want to refer to GREED, that is the ultimate!
    The other issue we have (especially in CA) is the illegal immigration problem. I honestly have a soft heart for them, because I have been to several of the Latino countries where many are coming from and I can see why they want to leave…..I would be doing the same thing if I were in there shoes. Why wouldn’t you want to come to the U.S. where you can get jobs that pay far better than home, pay no taxes, free healthcare, free schooling, and as a bonus, if you birth some children while you are here, they are automatically U.S. citizens. Even when things are looking bleak for America, it is still the “land of opportunity” to many. In California, this puts a major strain on our taxes, our healthcare, our schools and our programs.

    Over and Out!

  34. Greg Brumley says:

    James’ point was based on skewed information — the mothers’ milk of the right wing.

    The BOTTOM 47% of Americans don’t pay zero income tax. A TOTAL of 47% paid no income tax in 2009, only (38% in 2008). Among those who didn’t pay were a lot of multimillionnaires.

    But James’ twisted logic does bring to mind fundamental statistics. Wikipedia claims the bottom 50% of Americans earn 3.3% of the nation’s personal income. Paul Krugman points out that the top 1% have 24% of the imcome. Moreover, the top 10% have 90% of the nation’s wealth. This is the greatest income gap since World War I (pre-1920s).

    Even allowing for some error by Wikipedia, that’s an astounding indictment of the Republicans’ effort to kill the American middle class.

    The problem will not be solved by tiny taxe cuts for the large number who make a relatively small share of the income (even including James, according to his personal figures). That’s the old Republican scam of throwing bread crumbs to the masses.

    The Republican party is hellbent on expanding that income gap. Since its inception in the 1850s, the Republican party has perpetuated the lie that they’re for wealth creation. In fact, they’ve always been about wealth concentration. (The only exception was Theodore Roosevelt).

    Proposition 13 is an extension of the same fallacy: people with property trying to shift the tax burden onto others.

    The bottom line is this: The 90% should not be fighting over how the tax burden is distributed among ourselves. We should demand that the top 10% pay an exponentially greater share. (A flat tax isn’t the answer because it extends inequitable wealth distribution.) A return to more balanced tax burdens — aggressively graduated at the top 10% — should be a keystone to public policy which causes a more balanced distribution of income and wealth. The end result will be a return to the prosperity we saw from the late 1940s through the early 1970s, but have not seen in the last 30 decades.

    Again: fairness, not greed.

  35. James, I just realized that you may, indeed, be the problem ! You are, it appears, an enabler. Your federal tax covers the salary of two of Greg’s non tax paying government employee poster people. If we are to ever reduce the size of government, you have a patriotic duty to reduce the dollar amount of the taxes you are paying. By the way, what the hell does any iof this have to do with wine? Thanks, Steve for the forum and your kind indulgence. Finis

  36. The only person whose comments have it correct are those of David Harlow. No matter how much property values increase, they should only make a difference in taxes, when that increase is realized at the time of sale. You then have the decision of whether to pay income tax on the profit, between purchase price and sale price less improvements. Or you can elect to buy another property of the same value as the sales amount, thereby increasing your tax liability. Until then, you should only be paying taxes based on the original property value, then, at the time of sale, when you have actually realized a monetary gain, your increased tax liability becomes reality. This protects older home owners, who have lived in the same home most of their adult life, and haven’t had much increase in their income since retirement, and can ill-afford property tax increases cutting into their limited incomes, and stiil keep their homes. Not to mention inflations effect on their daily lives.
    David also recognizes the tremendous burden placed on tax paying California resident homeowners/business owners, to shoulder the expense of increased taxes, levied by the Liberal Left, Pro Big Government, to pay for illegal aliens that cross our border with their hand out. Never paying any income tax, federal or state, using State provided food stamps to pay for food, then giving birth to new tax liabilities while utilizing medical care without payment for those services, at the expense of the California taxpayers. Those children then become legal citizens as a birth right! Then they continue to be a further drain of California tax dollars, while attending public schools for a free education.

    All this, when I only wished to join in a friendly wine blog! Over and Out!

  37. Paul Howe says:

    In this blog debate, which is very well argued on all sides, I would like to add just one thing. Let the politicians get personal. But among us intelligent readers and writers leave the personal attacks out of any email. We will all get better information.

  38. After reading all of that, I could use a drink. And at this point, I don’t particularly mind if it costs 5 cents more.

  39. James McCann says:

    Paul,

    You are right. I apologize to all involved and the readers of this blog. The conversation got more heated than it should.

  40. I appreciate when readers go at it, but I hope my blog doesn’t turn into a political shoutfest. Just a gentle reminder to my wonderful readers!

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