Sorry, I'll change the order of posts shortly to put the seasons greeting back to the top but I'm afraid I've got to ruin some people's holiday cheer.
There are no news references yet but Legislators working on budget solutions announced today that they've come up with a shopping list of loopholes in California tax law that could be closed to help out in the budget crisis. The big one? Eliminate the deductibility of home mortgage interest against state income taxes. They claim it will "generate" $5 billion extra annually. Yeah idiots. And you were so effin' stupid you said this out loud. The mere mention that this proposal was considered serious just took 5% at least from the value of every home in the state. Don't bother numbnuts. It is to late. That 5% is now gone forever. It won't come back. All you can do now is save the next additional 10% by falling on your sword. I mean, here you have an industry nearing collapse and you give it a shove? What were you drinking? I'm sure some junior staffer planned this as a kind of Washington Monument Play to get a sense of urgency but they picked the third rail to piss on. Somebody get a rope.
Update 1:
Here's a news story in the Daily Democrat:
Legislative Analyst Elizabeth Hill's recommendations on tax breaks, which she says mostly benefit the rich and corporations, are drawing attention. She even addressed the largest, seemingly most untouchable tax break: allowing homeowners to deduct mortgage interest off their state personal income taxes.
Hill said in a report that the deduction, which exceeds $5 billion a year, no longer serves its intended purpose of encouraging home ownership. She believes there are more targeted, less costly ways to aid those who need the assistance, without subsidizing wealthy homeowners.
...
Without commenting on any specific tax break, Senate leader Don Perata, D-Oakland, and Assembly Speaker Fabian Nunez, D-Los Angeles, said Friday the Legislature will seriously consider Hill's recommendations.
And Steve Maviglio, a spokesman for Nunez, said closing tax loopholes - including possibly changing the mortgage interest deduction - will be part of Democrats' broad considerations of deficit solutions.
Well there's the mistakes. They think the HMID is to encourage homeownership and that it subsidizes the wealthy. Go back and read the Exurban Nation answer to these idiots.
12 comments:
Why should CA renters subsidize doomed CA buyers, anyway? You know my opinion about the mortgage deduction on the national level. Lots of people spent more on houses than they should have because Relitters told them they could buy more and save more on their income taxes. Like other government policies designed to influence markets, it's a dumb subsidy.
How about a renter's subsidy? Or a subsidy for people with paid-off homes?
I agree. repeal prop 13, tax mortgage interest and make people with kids pay more of their own education. Maybe not all at once (that would be too much fun), but start the process by tailoring policy to eventually meet these goals.
Mexican consular sources in Phoenix say they are seeing a spike in the number of immigrants applying for Mexican citizenship for their U.S.-born children, which will allow them to enroll in schools in Mexico.
They are also seeing a rise in requests for papers enabling families to carry household belongings back to Mexico, free of import duties.
from: http://www.reuters.com/article/inDepthNews/idUSN2126758320071224?feedType=RSS&feedName=inDepthNews&rpc=22&sp=true
How big of a spike?
The big one? Eliminate the deductibility of home mortgage interest against state income taxes.
They've got to be f-ing kidding! Thanks for ruining my holiday spirit, @Dawg ;).
@w,
I agree with you on repealing prop 13.
"make people with kids pay more of their own education"
I'd go for that if the childless would forego any SS. They are paying now for their parents, and since they failed to reproduce no one should pay for them when their time comes.
Thought this might be of interest: Widening of Health Care in States Hits Roadblocks
"I'd go for that if the childless would fore go any SS. They are paying now for their parents, and since they failed to reproduce no one should pay for them when their time comes."
Question: What if, say, it would be better that they don't have any children because the children will be sickly because highly likely birth defects or health problems.
After the state subsidy, I would elimidate (next!) the federal. Housing prices need a push on the downside before some other idiot proposal uses tax dollars to "stabilize" the situation. (Would've thought you'd like this outcome, Rob!)
(BTW, anyone know how to make a blogger account change its posting name, i.e., "David" --> "DCRogers"?)
DCRogers
"Question: What if, say, it would be better that they don't have any children because the children will be sickly because highly likely birth defects or health problems."
First of all, who is "they"?
Second, in the coming "poorer" browner CA, morbidity is likely to decrease, while mortality will increase.
Sickliness is a characteristic of well-fed, clean suburban upbringing.
I was just diagnosed with Babesia and Lyme (note: I'm a female) and I have several autoimmune disorders. on top of that, cancer is destroying my family for generations. My husband has an autoimmune disorder and the same related cancers are showing up on his side.
The doctor has suggested we wait at least two years to see if I get healthier but we have been warned we might not live an average lifespan. So, even if we adopted, we want to feel there's a good chance we will both be live until the child is 20 (min). Don't know what the requirements are for adopting.
The neighbor suggested adopting teenagers. Which we can do, because dreams change, but we would also like more than decade or two in age difference. (We're 28 & 30.)
RE: home mortgage deduction..
Remove the home mortgage deduction? then the rich will just do what they did before the mortgage deduction.. and which some of them with real high incomes are doing. Wrap the house as part of a corporation and net the cost of the mortgage against the interest payments.. voila, instant interest deduction.
Considering that Swarzeneggar is a multi-millionaire, I don't think that he is unaware of this. It really does screw the little guys though... but not the rich
bj,
I've been telling people that for years. It is scary that the LAO and Nuñez are so blind to the truth of the HMID. everyone else,
The universal collapse of social contracts in California is to be expected. We've been hollowing out the core values that made the state great for almost two generations. There's no one left to set a god example.
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