College tuition and public school funding

March 30, 2015

College tuition and public school funding in general are two aspects of
a trend in America which is deeply troubling, and threatening to our
nation’s future. That trend is the loss of equality of opportunity,
leading to the loss of social mobility and the stratification of our

Equality of opportunity is part of the bedrock of our nation. The
Declaration of Independence states that all men are created equal, and
have the right to pursue happiness. In today’s world, this is an almost
meaningless promise unless a good education is available to all. In
today’s world, with ever-advancing technology and globalization, there
is less and less opportunity of any kind for those without an education
that equips them to succeed. Equality of opportunity now requires a
quality education. For the great majority of us, no institution other
than government can fulfill this need.

Instead of recognizing and meeting the challenge of providing access to
quality education, we are reducing such access in a variety of ways.

                – By dramatically increasing tuition in both private
and public colleges and universities. Increased student aid for lower
income families and
                  student loans are partial, inadequate, and burdensome
attempts to respond to the problem.

                – By laws such as Proposition 13 which not only limit
public school funding, but also have shifted the tax burden from
                  to individual homeowners.

                – By laws which require a supermajority vote to impose
local property taxes, even if specifically designated for schools.

                – By rules which make it impossible or incredibly
difficult to cull poor teachers.

                – By pay structures in the public schools that not only
make it impossible to reward good teachers, but also make it impossible
to hire enough
                  good math and science teachers.

Even if one cares nothing for the ideal of equal opportunity as a moral
matter, there are serious practical consequences which should concern
In a competitive world, America cannot afford, economically, a situation
where large parts of the population are poorly educated and therefore
unable to fill the available jobs. Nor can we expect to maintain a
politically healthy democracy if large numbers of potential voters are
poorly educated, since poor education usually means poorly informed. A
recent study by the International Monetary Fund (might have been the
World Bank?) came to the conclusion that excessive inequality, by
itself, had substantial negative effects on the economic growth in both
Europe and the United States.

Other recent tax law changes, at the federal level, are making the
problem worse. When parents, even without any sophisticated planning,
can transfer over $10,000,000 (now increasing each year for inflation)
to their children free of estate tax, it is naturally a recipe for
creating an inherited aristocracy, or plutocracy. Titles such as duke or
baron are not required. Inherited wealth is sufficient. We are allowing
our educational system, which should be the most important counterweight
to inequality, to degrade. At some point, the American people will
conclude that upward social mobility, which has been the American dream,
is dead. That will be dangerous.


March 30, 2015


Note: This was published in the Mercury News Newspaper in August of 2008.

A recent Field poll of California citizens indicated substantial majorities had a positive view of Proposition 13, the law which severely limits property tax increases except when real estate changes hands.

This poll was like asking people if they would like to see their taxes increase, without pointing out what the additional government revenue might be used for, or what the unintended consequences of Proposition 13 have been. For example, no mention was made of the fact that California now spends less than half of the amount per pupil on its public schools than New Jersey. California public schools generally have serious problems, including an unacceptable drop-out rate. The shortfall in funding can be traced largely to Proposition 13.

The great resulting tax disparity can be found in a middle upper class neighborhood here in Northern California. On a West Valley dead-end cul-de-sac sits eleven homes. Six families are pre-Proposition 13 taxpayers that pay a total of $14,200 worth of annual property taxes. The other five pay $125,000. Average age of six original owners is 77, whereas the other five is age 50.

Most people are unaware that, in addition to protecting single family residential property from sharp property tax increases, Proposition 13 also shelters industrial and commercial property. Generally speaking, property owned by a corporation or partnership will not be reassessed until more than 50% of the ownership of the corporation or partnership changes hands. Careful planning can avoid such ownership changes for many decades, even after some of the shareholders or partners die. Even more startling, if real property was owned by a corporation or partnership prior to the passage of Proposition 13, it will never be reassessed, barring a sale, unless there is a shift of control of the corporation or partnership to a single individual or a single entity. That means, for example, that property owned by PG&E prior to the Proposition 13 passage will essentially never be reassessed, since no one person or entity is likely to ever gain control of PG&E by owning more than 50% of its stock.

All of this means that there has been a steady shift of the property tax burden from commercial and industrial property to residential property, while at the same time our schools have been starved of revenue.

There are two additional pieces of Federal and State legislation that when combined with Prop 13 keep millions (especially seniors) of homeowners in their homes.

1. Prop 13 causes seniors who want to move to a less expensive, smaller home to face a steep increase in property tax, except in a few counties.
2. Capital gains (Federal 15% and State 9.3%) are often above the $250,000 per person exemption when sold. Seniors pay the capital gain tax no matter where they move. Assisted living can have heavy up-front fees.
3. The third piece is the ‘current surviving spouse’s’ best friend. It’s the ‘Stepped-Up-Basis-at-First-Death’, part of the current Federal tax legislation. A surviving spouse gets a ‘Step-Up’ on both halves on all ‘community property’ assets, and pays no capital gains tax on a sale following the death of his or her spouse.

A home purchased for $50,000 in 1965 and sold for $2,500,000 in 2008 can have two different results when sold. A current surviving spouse pays zero. A couple selling would pay $400,000 to $500,000, depending on improvements.

Few seniors are aware of the legislation. Assisted living facilities are full of the elderly who paid capital gains plus a large up front fee to get into a retirement home.

Possible Solutions

1. Seniors over 65 should be allowed to move anywhere in California without paying increased property tax, as long as they are moving to a less expensive residence.
2. Prop 13 protections should be gradually removed from commercial and industrial property, allowing our schools to be better funded and stopping the property tax burden from shifting to residences.
3. Capital gains taxes should be completely removed for sale of a residence by seniors over 65.

James U. Hall, MBA, CLU Former President Santa Clara County CLU Society, General Agents and Managers Association (

John E. Upton, MBA, El Dorado County Board of Supervisors, 1990-1998. Former president (1998), California State Association of Counties (

Attached is the copy of the article in the Mercury News.

Solution for education funding drought

March 30, 2015

Why are so few homes for sale in the Bay Area? 001

Pender_Article_2 001

Pender_Article_3 001

The Bay Area housing market has also been suffering from an inventory drought. Real estate activity always slows in winter, but the number of homes and condos sold …

The most thorough article we’ve ever seen. We’ve been trying on and off over 7 years to bring this to light to a legislator….good investigative writing.

We’ve enclosed an article we wrote to the Mercury News 7 years ago.

Our constructive comments are as follows:

1.Education funding at all levels is hurting directly based on lack of home sales, especially by seniors over 65 not wanting to pay huge capital gains, nor face a Prop 13 increase. There has to be billions of dollars in potential home property tax revenue not being realized, due to low sales.

2.There is little doubt here in California that huge student loans are the result of Prop 13 and potential capital gains at 23.6%. Presently, nationwide student loans are at $1.2 Trillion guaranteed by the federal government. This makes the feds complicit on both sides.

I believe a high percentage of student loans are in default. Thousands are paying interest only. I paid $85 per semester for undergraduate fees at Berkeley which included football tickets. Those were Eisenhower days…a strong Republican. The high, tax rates were around 70% on lower incomes.

Make no mistake, huge student borrowing is the direct result of Prop 13 and large capital gains on the sale of homes here in California.

James Hall

Robert Reich reports CEO to Worker income ratio 475:1

March 19, 2014

Thought the attached information would show you how the “good-old-boy” network is working in this country. Click on the pdf below!

The typical CEO of America

Prop. 13 reform will take clever moves

December 9, 2012

Piece written by Willie Brown. Here is the link:

It’s good to see lawmakers moving to fix one of Proposition 13’s biggest inequities – the tax break that treats corporations differently from homeowners. That break is one of the most unfair parts of the state’s tax code. And I should know – I helped write it. After voters approved Prop. 13 in 1978, capping property taxes for landowners, we had to sit down in the Legislature and figure out how to implement it. One of the biggest questions was how and when properties could be reassessed. We decided that should happen whenever a property was “transferred.”
When you sold your home, it was transferred to someone else. The home was reassessed, and the taxes for the buyer were increased accordingly.

What we did not realize was that corporations don’t actually transfer property – they transfer the stock in the company that owns the property. And Prop. 13 didn’t apply to stock. The result is that corporate property that existed in 1978 is still being taxed based on 1978 assessments – even property that has changed hands time and again. That means a disproportionate burden of California’s property taxes is falling on homeowners.

The remedy, as suggested by Assemblyman Tom Ammiano, D-San Francisco, would be to change the definition of a transfer. With Democrats now controlling two-thirds of both the Assembly and state Senate, they could do that without having to worry about no-tax Republicans.
But they’ll have to be very clever at how they go about it – and having someone like Ammiano carry the ball may not be the way to do it.
The problem is that any effort to “repeal” Prop. 13, no matter how reasonable, still has lawmakers quaking in their shoes. What the Democrats need to do is basically make a racehorse look like a donkey.
If I were in charge, I’d come up with a bill redefining that single word, “transfer.” And I wouldn’t have Ammiano or anyone else with a long history of supporting tax hikes carry the bill – I’d pick the most conservative Democrat I could find and have him do the job.

Proposition 13 needs to be re-evaluated

February 14, 2012

Proposition 13 needs to be re-evaluated
A direct frontal attack to change Prop. 13 (Editorial, Feb. 10) requiring a two-thirds vote won’t work. There are too many home and commercial property owners benefiting from a very low property tax base. The unfair federal and state “step-up basis” benefiting a surviving spouse versus couples living close needs to be addressed separately from Prop. 13. There are millions of couples over 65 and much later in life who won’t sell because the capital gains tax exemption of $250,000 per person is too low. The lock-in effort slows middle to high-end properties for sale, thereby creating a huge restriction on increasing property taxes both on home sales and commercial property. It would require federal legislation and not the state two-thirds to change Prop. 13.
Research shows that when the exemption increased from $125,000 per-person to $250,000 (1992) sales increased substantially in that bracket.
My recommendation is an end-run around Prop 13 to increase property taxes.
James Hall
Monte Sereno

This just appeared in the Mercury News:

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

October 27, 2011

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: 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

Obama Care Healthcare 2010

October 31, 2010

Hello Again:


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: 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.



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

October 19, 2010

(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. Read the rest of this entry »

4th point for William P. Fuller’s solution

October 6, 2010

Subject: Rework Estate Taxes – Boost Spending

The following is a response to the article (

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

October 6, 2010

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. Read the rest of this entry »

Estate Planning for the State – SJR-20 Resolution 57

September 20, 2010

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. Read the rest of this entry »


September 20, 2010

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. Read the rest of this entry »

Our team’s response to Senate and Assembly response

August 31, 2010

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. Read the rest of this entry »

SJR-20 Senate Revenue and Tax Analysis

August 31, 2010
Office of Senate Floor Analyses
1020 N Street, Suite 524
(916) 651-1520 Fax: (916) 327-4478
SJR 20
Bill No: SJR 20
Author: Alquist (D)
Amended: 5/5/10
Vote: 21
AYES: Wolk, Alquist, Ashburn, Padilla
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. Read the rest of this entry »

SJR-20 Assembly Revenue and Tax Analysis

August 31, 2010
SJR 20
Page 1
Date of Hearing: June 28, 2010
Anthony Portantino, Chair
SJR 20 (Alquist) – As Amended: May 5, 2010
Majority vote.
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. Read the rest of this entry »

Open Letter to Anna Eshoo

August 26, 2010

Dear Ann Ream:

Subject: SJR-20 Resolution 57 Hijacked (

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:

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

August 26, 2010

Senator Elaine Alquist

Resolution Change 57 – 100% Yes Zero – No (

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   Read the rest of this entry »

SJR-20 is Chartered

July 9, 2010

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

June 9, 2010

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