Dan Walter’s Anti-Prop 13 theory baseless article response

Dan Walters:
Subject: “California’s below-average property tax rate is more than offset by its above average property values”. Your Anti-Prop 13 theory baseless.
Good article. However, a ‘hold on’ attitude is going to get worse as baby boomers as well as seniors are not going to sell.
Our ‘Prop 13’ piece that appeared in the Mercury News Aug 13, 2008 explains the ‘hold problem’ that is getting worse in the neighborhoods with a large elderly population. The elimination of capital gains might yield a boom. When it comes to taxes, the 1970 takeaway is that taxes on capital should always be leveraged and dramatically cutting elderly people’s capital gains tax could serve the lowliest citizens. It would certainly help schools.
Our efforts turned into SJR-20 resolution 57, which we felt was inadequate tying it to moving to a rest home: http://www.leginfo.ca.gov/cgi-bin/postquery?bill_number=sjr_20&sess=PREV&house=B&author=alquist. Elaine Alquist thought our proposals were good but changed it due to apparent political pressure. We could not support it.
Your articles are always worth reading. Any suggestions would be helpful.

James Hall

http://jameshall.wordpress.com/

Obama Care Healthcare 2010

Hello Again:

Timeline_Healthcare_Bill

Most of you know I spent most of my career in the insurance business. The new ‘Obama Care’ is a good start and long overdue. If you have the interest, check out: http://www.healthcare.gov/law/timeline/index.html. Feel free to share it with your friends. It’s definitely the most thorough review I’ve seen. It’s going to take years to break up the health insurance monopoly (5 companies), but this is a start.

Regards,

Jim

Gov. Schwarzenegger Signs Legislation Making California the National Leader on Health Care Reform

(sent to me by my cousin John Upton)  Gov. Schwarzenegger Signs Legislation Making California the National Leader on Health Care Reform
California is First State in the Nation to Create Health Benefit Exchange

Governor Arnold Schwarzenegger today signed AB 1602 by Assembly Speaker John Pérez (D-Los Angeles) and SB 900 by Senator Elaine Alquist (D-Santa Clara) creating the California Health Benefit Exchange, an entity that will help California consumers and small businesses shop for and buy affordable health insurance starting in 2014. The Governor’s action makes California the first state in the nation to enact legislation creating a health benefit exchange under federal health care reform.

4th point for William P. Fuller’s solution

Subject: Rework Estate Taxes – Boost Spending

The following is a response to the article (

http://www.mercurynews.com/opinion/ci_16251955?nclick_check=1)

written by William B. Fuller and printed in the San Jose Mercury – Oct 5^th, 2010.

William B. Fuller’s piece on reworking Estate Taxes to boost consumer spending includes three great tax ideas to boost the economy: #1. Bring estate tax back with a vengeance to 55%, #2. Defang the gift tax and #3, Tame the Generation Skipping Tax (GST).  Number 4 could be to eliminate or reduce capital gains when selling a home over and above the $250,000 per person exemption.  Surely, it would stimulate billions of dollars of home sales while increasing property tax revenue in the process here in California.  Revenue needed so badly for schools.

Jim Hall

Monte Sereno

Rework Estate Tax article by William P Fuller

Re-post – Opinion: To save the economy, federal taxes should encourage giving while we’re alive By William P. Fuller Special to the Mercury News Posted: 10/05/2010 12:01:00 AM PDT

We’ve just endured the worst financial crisis since the Great Depression and are now facing a potential “double dip” and an excruciatingly slow recovery. In just two and a half years, we have witnessed the metamorphosis of the U.S. from a nation of irrational spenders and consumers into a nation of irrational savers and scrimpers. Economists agree that until we get people to spend more, the destructive cycle of less consumption, leading to anemic corporate performance, leading to less demand for labor, leading to higher unemployment, leading to even less consumer spending, isn’t likely to correct itself.

Estate Planning for the State – SJR-20 Resolution 57

William Dean:

Subject: Estate Planning for the State
SJR-20 Resolution 57

Gas taxes, local taxes, auto fees, sales tax revenue, tolls for bridge traffic and lastly property taxes aren’t cutting it. Hopefully, the economy will turn upward and billions in new revenue will enter the system. Unfortunately, the interaction between property taxes and capital gains taxes in California are unique because of Prop 13 and won’t increase much even though the economy may start an upward trend. Property taxes are the primary source of income for schools and local governments – close to 72%.

What to do about it?

Seniors have had enough tax breaks over the last 40 years, which is true. Fortunately, the problem is the solution to creating billions in property tax revenue early. Allow those very seniors to sell without paying capital gains, or possibly double the exemptions. Remember, there is the escape tax legislation called the ‘Step-Up-Basis-at-First-Death’ that avoids capital gains completely for the survivor.

DISAPPOINTING FINAL FORM for SJR-20 Resolution 57

Attn:
State Senator Elaine Alquist, Santa Clara , CA – Chair Senate Subcommittee on Aging and Long-Term Care
State Senator Lois Wolk, Yolo County , CA – Chair Assembly Revenue & Taxation Committee.

Subject: DISAPPOINTING FINAL FORM for SJR-20 Resolution 57

Summary: We originally proposed what became SJR 20 for two primary purposes:

1. To correct an estate tax inequity that exists between senior couples and surviving spouses to the very limited extent of its application to selling their primary residence.
2. By correcting the inequity, also motivate senior couples (age 65 & over) to change their place of residence, if doing so meets a personal need. Because many senior couples are in pre-Proposition 13 ownerships positions, the likely effect would be increase property tax revenue, and help reduce state and local government budget deficits.

The final SJR 20, as modified from our original, accomplishes neither objective.

Our team’s response to Senate and Assembly response

Clearly, these analyses were made up after the bill was amended from what we had given the senior legislature.
My questions:
a. Was it changed first by the senior legislature? If so, was Ann Mack aware of this?
b. Both analyses refer to an “author”; senate says “author’s office”, assembly says “author’s statement.” Who is this “author?” Both analyses refer to “as amended May 5, 2010.
c. Was it changed after the senior legislature acted on it, and by whom? When did the senior legislature act – before May 5?
d. If changed after the senior legislature, why didn’t the analysis indicate that it was not what the senior legislature had acted on? Why wasn’t Ann Mack made aware that a significantly different bill was what the legislature was considering?
* The senate analysis:
a. paragraph #1 completely fails to make the point about the inequity between the first death step up vs senior couples.
b. paragraph #2 should say senior “couple”, not senior “citizen.”
c. The argument in support notes the insufficient exclusion being a disincentive to plan for care needs, but misses the idea that it is a disincentive to make other lifestyle changes, such as a smaller home in a location nearer to grandchildren, etc.

SJR-20 Senate Revenue and Tax Analysis

CONTINUED

SENATE RULES COMMITTEE

Office of Senate Floor Analyses

1020 N Street, Suite 524

(916) 651-1520 Fax: (916) 327-4478

SJR 20

CONSENT

Bill No: SJR 20

Author: Alquist (D)

Amended: 5/5/10

Vote: 21

SENATE REVENUE & TAXATION COMMITTEE: 4-0, 5/12/10

AYES: Wolk, Alquist, Ashburn, Padilla

NO VOTE RECORDED: Walters

SUBJECT: Taxation: sale of principal residence: senior citizens

SOURCE: California Senior Legislature

DIGEST: This resolution urges the Congress and the President of the

United States to enact legislation that increases the amount of gain that a

senior citizen 65 years of age and older and who pays for long-term care

costs I allowed to exclude from income, from $250,000 to $500,000, and

from $500,000 to $750,000 for joint returns, from the sale of the qualifying

principal residence of the senior citizen.

SJR-20 Assembly Revenue and Tax Analysis

SJR 20

Page 1

Date of Hearing: June 28, 2010

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Anthony Portantino, Chair

SJR 20 (Alquist) – As Amended: May 5, 2010

Majority vote.

SENATE VOTE: 32-0

SUBJECT: Taxation: sale of principal residence.

SUMMARY: Urges the Congress and the President of the United States (U.S.) to enact

legislation that would increase the amount of capital gain excludable from income if it is realized

by a senior citizen 65 years of age or older on the sale of his/her principal residence.

Specifically, this bill:

1) Makes a request from the Legislature to Congress and the President of the U.S. to enact

legislation that would do all of the following:

a) Increase the amount of non-taxable gain realized on the sale of the qualifying principal

residence by a senior citizen 65 years of age or older from $250,000 to $500,000 for

single filers and from $500,000 to $750,000 for joint filers.

b) Limit the seniors’ eligibility for the increased amount of non-taxable gain only to seniors

who pay for long-term care costs, including long term care insurance premiums, entrance

fees to assisted living facilities, continuing care retirement communities, and senior

congregate living facilities.

2) Makes findings to support the request and resolves that the Secretary of the Senate transmit

copies of the resolution to specified elected officials.

Open Letter to Anna Eshoo

Dear Ann Ream:

Subject: SJR-20 Resolution 57 Hijacked (http://www.leginfo.ca.gov/cgi-bin/postquery?bill_number=sjr_20&sess=PREV&house=B&author=alquist).

I think this is a case of well-intentioned legislation introduced by a separate senior group to the senior senate and on to the state legislature that was hijacked by the insurance and retirement homes lobby.

Please review our initial legislation and you have Resolution 57. There were zero “no” votes by any representative during the entire process. It doesn’t pass the smell test by any measure.

Please review our response to Senator Alquist and our piece that appeared in the Mercury News: http://jameshall.wordpress.com/2008/12/09/.

We have tried to develop interest from the major players including Anna Eshoo for many years. We would like to know who the Federal representative who is sponsoring the bill.

James Hall

Open Letter to Senator Elaine Alquist

Senator Elaine Alquist

SJR-20
Resolution Change 57 – 100% Yes Zero – No (http://www.leginfo.ca.gov/cgi-bin/postquery?bill_number=sjr_20&sess=CUR&house=B&author=alquist)

What Happened?

We will identify ourselves as the original group that worked with Senior Senator Ann Mack to develop the legislation that became SJR 20. We had a four-fold purpose:
1. Increase property tax revenue substantially over time without a direct confrontation with Prop 13. We expect this would occur because senior couples over age 65 would have a capital gains tax barrier to selling their homes removed. We believe their moving might cause a new buyer, paying current market value property taxes, to then occupy the home. The larger purpose, however, was the one listed below.
2. Overcoming a huge inequity for elderly taxpayers only, which is the Federal unfairness in application of the ‘Step-Up-Basis-at-First-Death’ (no matter what age.) By allowing all seniors over 65 to sell their primary residence and pay no capital gains, they would receive the same capital gains tax treatment given to surviving spouses. Since surviving spouses pay no capital gains in immediately selling their primary residence, whereas couples face a large capital gains over the $250,000 per person exemption, couples are second-class taxpayers to surviving spouses. We were primarily attempting to resolve that inequity!
3. Stimulate home real estate sales among seniors in middle to upper class neighborhoods
4. Free up billions of capital that is currently locked-up  

SJR-20 is Chartered

Hello Everybody:

Subject: SJR-20 Chartered

Our legislation made it through the state of California, or in legislation terms: “chartered”.  (Resolutions Chapter 57 of 2010)  The next step is to find a federal legislator to go forth with a ‘federal resolution’.  We’ve been on this subject for close to four years.  A huge thank you to Senior Senator Anne Mack.  We wouldn’t be where we are without her.

Jim Hall

Reason no one moves: awful property taxes

Originally posted in the San Jose Mercury News letters section:

Reason no one moves: awful property taxes
Taxes are the main reasons Californians are staying where they are. Proposition 13 has caused a steady shift of the property tax burden from commercial and industrial to residential property. This locks in outdated assessments, thus denying the community the additional tax revenues that would be paid by new homeowners.
Seniors over 62 should be allowed to move anywhere in California without paying increased property taxes, as long as they are moving to a less expensive residence.
State and federal capital gains taxes should be eliminated for sale of a home by seniors over 62. There are millions of California homes that have appreciated more than the outdated $250,000 per person capital gain exemption that won’t sell because of the state and federal (24.3 percent) tax rate.

James Hall
Monte Sereno

Open Letter to Warren Buffett by Jennifer Bestor

The following is a letter that Menlo Park resident Jennifer Bestor wrote to billionaire Warren Buffett concerning her research on the tax burden shift, favoring commercial property owners, resulting from the passage of California Proposition 13.

10 March 2010

Mr. Warren Buffett
Berkshire Hathaway Inc.
3555 Farnam Street
Omaha, NE 68131

Dear Mr. Buffett,

In 2003 you advised Governor Schwarzenegger to review Prop 13 with an eye toward generating more revenue for California schools, cities, emergency services, and other local needs. The governor responded that Prop 13 is the “third rail” in California politics and that you would have to do 500 sit-ups if you mentioned it again.

Please let me know how I can help you with the sit-ups. We desperately need some energy from that third rail.

Looking around at my hometown and reviewing my homeowner’s tax bill, I am torn between the realization that, for homeowners, Prop 13 has worked roughly the way that voters thought it would, while for commercial landlords, it’s been an incredible windfall.

Seniors Won’t Move

In response to a letter at the Mercury News about Prop 13; the letter is at the bottom of this blog.

Property taxes are the main reasons Californians 65 and older won’t move. According to the last census, there are over 1,750,000 homeowners here in California 65 and older. This locks in outdated assessments, thus denying the community the additional tax revenues that would be paid by new homeowners.

Seniors over 65 should be allowed to move anywhere in California without paying increased property taxes, as long as they are moving to a less expensive residence.

State and Federal capital gains taxes should be eliminated for sale of a home by seniors 65 and older to stimulate the middle to upper class home sales. There are 1,400,000 plus homeowners 55 and older. There are millions of California homes that have appreciated more than the current 250,000 per person capital gain exemption; homeowners won’t sell because of the state income tax combined with the Federal (24.3%) tax rate. Increased property taxes will structurally increase revenue

James Hall
Monte Sereno, CA

Letter in the Mercury News:
Something must be done about Prop. 13

There is little doubt that one of the consequences of Proposition 13 has been a severe decline in California property tax revenues. Although the original intentions of this legislation may have been justified, the results produced a system that is inequitable and irrational. There are far better ways to ensure that individual homeowners are not forced out of their homes due to excessive annual increases in property tax, and there are far more equitable systems for ensuring that corporations contribute their fair share of property tax.

We should demand that legislators create a simple, equitable property tax law that protects vulnerable individual homeowners, but allows the state to collect adequate revenues to support those vital community services that we all depend on, such as public education. Rather than propose ways to tinker with a bad system, let’s create a new one. Doing nothing is simply irresponsible.

Bill Moyers on Healthcare March 5th, 2009

Here are our comments on the latest Bill Moyers show. You can watch the video their too. Comments below. http://www.pbs.org/moyers/journal/blog/2010/03/is_the_presidents_health_bill.html

Bill Moyers Journal:

I am a 50 year veteran of the field life and health insurance delivery system and receive a retirement check from Cigna – the same Cigna as your guest author Wendell Potter. The industry has lost focus on their premium paying customers and in the process is corrupt. We are our brother’s keeper when push comes to shove. Our Congress has lost their way. Check out Wellpoint’s website and other related sites.

http://wellpoint.com/business/company_history.asp

o http://www.aetna.com/about-aetna-insurance/aetna-corporate-profile/aetna-history/index.html
o http://www.hcahealthcare.com/CustomPage.asp?guidCustomContentID={2BA34880-F69E-433A-96E7-69DCD3A0EBE6}

A Mr. Wydick has written about this and would be a good potential guest: http://www.usfca.edu/artsci/fac_staff/W/wydick_bruce.html.

Bill SB-1416

Here is the second bill by Senator Walters: http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_1401-1450/sb_1416_bill_20100219_introduced.pdf

SENATE BILL No. 1416
Introduced by Senator Walters
February 19, 2010
An act to add Section 17152.5 to the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.
legislative counsel’s digest
SB 1416, as introduced, Walters. Personal income taxes: capital
gains: sale of principal residence: senior citizens.
The Personal Income Tax Law provides, in modified conformity to
federal income tax laws, for the manner in which taxable gains are to
be recognized upon the disposition of property, including real property
that is the principal residence of the taxpayer.
This bill would, for taxable years beginning on or after January 1,
2010, provide that gross income does not include any gain from the
sale or exchange of the principal residence of a taxpayer who is 65 years
of age or older.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
The people of the State of California do enact as follows:
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SECTION 1. Section 17152.5 is added to the Revenue and
Taxation Code, to read:
17152.5. (a) Notwithstanding Section 17152, for each taxable
year beginning on or after January 1, 2010, gross income shall not
include any gain from the sale or exchange of the principal
residence of a qualified taxpayer.
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(b) For purposes of this section, “qualified taxpayer” means a
taxpayer who is 65 years of age or older.
SEC. 2. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
O
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SB 1416 — 2 —

Bill SB-1415

Bill proposed by Senator Walters: http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_1401-1450/sb_1415_bill_20100219_introduced.pdf (17 pages long

SENATE BILL No. 1415

Introduced by Senator Walters

February 19, 2010

An act to amend Section 69.5 of the Revenue and Taxation Code,

relating to taxation, to take effect immediately, tax levy.

legislative counsel’s digest

SB 1415, as introduced, Walters. Property tax: intercounty base year

value transfers.

The California Constitution authorizes the Legislature to provide that

a person who is either severely disabled or over the age of 55 years may

transfer the base year value, as defined, of property that is eligible for

the homeowners’ property tax exemption to a replacement dwelling

that is of equal or lesser value located within the same county as the

property from which the base year value is transferred, and if a county

ordinance so providing has been adopted, to a replacement dwelling

that is located in a different county.

This bill would authorize any person over the age of 65 years to

transfer the base year value of an original property to a replacement

dwelling located in a different county without the adoption of a county

ordinance so providing. This bill would require this provision to be

applied only to intercounty transfers of base year value that occur on

or after January 1, 2011.

SJR-20 Bill

Here is one of 3 bills, this one by Senator Elaine Alquist: http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0001-0050/sjr_20_bill_20100125_introduced.pdf

Senate Joint Resolution No. 20
Introduced by Senator Alquist
January 25, 2010
Senate Joint Resolution No. 20—Relative to taxation.
legislative counsel’s digest
SJR 20, as introduced, Alquist. Taxation: sale of principal residence.
Under existing law, capital gains taxes are imposed upon the sale of
capital assets.
This bill would memorialize the Congress and the President to enact
legislation that would eliminate capital gains taxes on the sale of a
principal residence by a senior citizen 65 years of age and older.
Fiscal committee: no.
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