San Diego Housing Market News and Analysis

Here's a more unbiased view of taxes.

http://www.npr.org/2011/11/16/142353732/...

Brian: Bwa-ha-ha-ha-ha-ha! Um, yeah, Tim Dickinson is quite unbiased. He works out of San Francisco and is well-known for his articles in Rolling Stone Magazine:http://en.wikipedia.org/wiki/Tim_Dickinson

Two words to help fix the tax problem: TAX REFORM. Interestingly, neither the Dems nor the GOP wish to discuss this. Why do you think that is, Brian?

I, for one, am quite jealous of those bottom 40% lucky ducks that don't pay any federal income taxes. I mean, for one thing, they get to live on less than $35K a year, and you can buy a lot of ramen for that! Just because a lot of them are elderly, disabled and full time students doesn't mean they shouldn't pay their fair share, amirite? Let's not let old people or college kids who don't pay federal income taxes vote.
While 35K a year is a lot of money, you're right that it's hard to support a family on 200k a year! Having to choose between having a maid, sending the kids to dance lessons and having a math tutor is not fair! And god forbid you have to send your snowflake to *public* school.
Sure, the bottom 46% pay less proportionally in payroll taxes than those who cap out. They also pay a much greater percentage of their income in sales taxes, but who cares, right? Same percentage, must be fair. If they were smart they would invest some of that fat cash they are raking in and benefit from low tax rates on capital gains and dividends. It's not our fault the poor waste all their money on their rent, food and health care. They need to learn to not eat and save.

Seriously though, this is America, we have a progressive tax policy. Greatest nation in the world. If you don't like it, you can get out.

Non-argument.
Well, you could also say, if you're the bottom 40% and can't afford to live in america, they can get the fvck out too.

In fact, I think that's more of a reality than the former...After all, the same people that make up the corporate tax rules and tax rules for the elistist rich have their pockets padded by them...

I think most common people are focusing on the wrong problem. Taxing "people" more isn't going to do didly.

1. How about government spending less defense
2. How about government spending less social entitlement benefits programs.
3. How about government start actually make some of the corporations that pay no taxes at all pay taxes, like somewhat reforming the expatriation corporate tax rules.

Before asking any one "individual" to "pay more of their fair share", I think everyone else should be asking our government to fix #1-3 first. Until then, the lower 40% of this nation are going to get continuously squeezed into poverty, and the once was upper middle class gets squeezed down into lower runs of the economic tier." And for everyone else with any remote shred of wealth (albeit small), will do everything they possibly can to shelter, hide, dodge the system. Because it is everyone is in it for themselves game mode now.

All good ideas. Yes, how about it?

Great post, poorgradstudent! Except for one caveat. When I was in my "FICA contribution years," I had this continual vision where I (and my bretheren) were supporting the weekly salon visits of all these little old ladies who never worked (outside of the home) a day in their lives :={.

Their (inflated) SS benefits (due to collecting on a spouse or fmr spouse's work record) allowed them this pleasure and also to take the bus to an Indian casino or factory outlet to play with their friends 1-2x per month.

It didn't seem fair that I couldn't afford any salon, casino OR factory outlet visits and moreover, did not have the leave from work available to do so.

Such is life ... the unfairness of it all ... I guess we can all find a reason to complain that we were born in the wrong era :=0

Here, here !

I'd be glad to pay pay a higher portion of the total costs if the costs were about 20% of what they are now and I'm not even one of the "rich" ones.

The discussion of fair share only hides the real problem.

We can see from the 3rd graph that all group have seen a decline in their tax rate over the last 30 years.

At the same time, the top 5% have seen their share of total income expand from 30% to 40% of the economy.

The most impressive number is what is not included in the article. In which the top 1% saw their total income expand from roughly 10% to 20% of the economy within the past 30 years.

What this really means is that all of the income expansion within the top 5% essentially went to the top 1%. Put in another way, the 99% either seen flat growth in income or had falling income.

How come the WSJ missed this important and crucial piece of information???

Back to the top 1% tax rate, which was included in the article, that average rate fell from 35% down to less than 30%. So while the top 1% increased their share of the total income, their tax rate declined.

Is that right?

The reason you as a top 2-5% earner is feeling p*ssed is because you are falling behind just like everyone else, while the top 1% continue to push their weight around.

That's correct, but it definitely isn't right.

1. If the government spends less on defense, I would happily see most of those savings go to tax cuts for the rich. It's a pipe dream, because there is so much pork barrel spending on defense it would take a huge, bipartisan effort that just won't ever happen in our lifetimes.
2. I hate having all social entitlement programs lumped together. Are we talking welfare? medicaid? medicare? social security? The biggest problem with entitlement spending right now is a demographic one, and there are no easy answers to that. Plus, seniors vote in droves, so politically it's almost suicidal to piss them off. I'm not sure there is room for huge cuts in entitlements without significant long term social costs.
3. I would love it if we could cut individual taxes while increasing corporate taxes. Good luck with that though; corporations are even better at dodging taxes than rich people are.

[As the] nation's richest people often point out, they do pay the lion's share of taxes in the country: The richest 20% pay 64% of the total taxes. (Lower bar). Of course, that's because they also make most of the money. (Top bar).

Read more: http://www.businessinsider.com/what-wall...

So what does all this mean in terms of net worth? Well, for starters, it means that the top 1% of Americans own 42% of the financial wealth in this country. The top 5%, meanwhile, own nearly 70%.

Read more: http://www.businessinsider.com/what-wall...

And then there are taxes... It's a great time to make a boatload of money in America, because taxes on the nation's highest-earners are close to the lowest they've ever been.

Read more: http://www.businessinsider.com/what-wall...

The aggregate tax rate for the top 1% is lower than for the next 9%—and not much higher than it is for pretty much everyone else.

Read more: http://www.businessinsider.com/what-wall...

So the correct solution then is just to tax the working upper middle class (which don't have the tax loopholes) and bring them down to the bottom 40-50% and gloss over the real problem...Um, yet that makes a lot of sense to me.

You wonder why Romney has bank accounts in caymen islands. You think it's bad Romney is trying to get his home reassessed using high power legal counsel.. It's because it's legalized tax dodging. Absolutely nothing wrong with it...

It's no different than

1. common folks that try to skirt paying more property taxes in magic slight of hands...Like if one buys a new home, and offers to pay the seller's realtor/closing cost if they in the seller in turn lower the selling price.. All else being equal to the seller, i'm sure a lot of buyers have done that just that to lower their property tax rate (albeit small)...for what? To dodge paying more property taxes.

2. people previously reporting Mello-ruse as a tax deductible item when it wasn't clear whether that was allowed (well, it is now)..

3. common folks that purchase things online and avoid paying state sales tax

4. common folks that try to undercut the selling price of a used car to avoid paying higher

5. common folks that when buying something from a small shop ask for the "cash only" price, knowing very well the merchant is going to intentional not ring it up and, therefore cheat the state out of sales tax.

Yes sir, the only difference between what Romney has at his disposal and the rest of us, is he has more tools, and the rest of us are just jealous with sour grapes that he does and you don't. Because I guarantee most (not all, but most people) given the ability to dodge their taxes would.

So...Before anyone else asks for some other individual to pay more taxes, look at yourself in the miror and ask yourself, are you?

Regarding entitlement programs, yes I mean all of it. At least a lot of it should be reformed and self-contributed...

But you know the only real solution to self-entitlement programs that are underfunded or upside down is this..In fact the solution to any high debt problem is this

...Cut off the money supply and force the issue about making hard choices and austerity....

When the bill comes due, there is no money, and things shutdown...Then it won't matter what the "terms, conditions,etc were"...Everything will be changed...Yes, even pensions. So cut off the money supply, and let's make some real choices...
So get some popcorn, and watch Greece unravel as a data point. We have a lot to learn from it.

Tax evasion is a crime.

Tax avoidance is a Constitutionally guaranteed right.

Yes, and as long as romney followed the rules, I don't see a problem with it at all.

I can't remember the last time I didn't pay taxes, so either I am fortunate or I need to hire an accountant. I don't understand how the rich can pay no taxes, and yet I'm sure it happens.

You don't have a problem that Bain capital as well as other private equity firms spent millions to lobby for carried interest tax break that allow Romney to essentially follow his own rules on taxes?

And successfully lobbying to lower one's own tax rate is the American Dream.

False equivalence, flu.

The common person who tries to save a little bit here and there does so to take care of his family; and in the end, he spends all his income and is left with nothing.

The billionaire who pays no taxes is a parasite.

The WSJ article is stupid. Taxes should not be proportional based on population, but is should be proportional based on the share of the economic pie.

If you go dutch to a restaurant, each person does not pay the same. Each person pays according to what he gets. If you get the lobster and wine, you should pay more than the person who only gets a salad and water.

That real problem is quite simple. If you take Bill Clinton's last balanced budget, increase it by inflation and population growth, the budget would be $2.8 Trillion.

We're spending $3.8 Trillion.

OCR: Oh, hell yeah, I have a problem with that. I have a problem with corporate welfare, too, and agribusiness subsidies and how the Pentagon is now a finishing school for the Military-Industrial Complex.

Like I said earlier: We (meaning us proles who aren't in the oligarchy) have NO advocates in the professional political class and, yes, Brian, that includes BOTH the Dems and the GOP.

They don't call the Senate the "Millionaire's Club" for no reason.

Obama is about "authentically" black as Al Jolson. He's as much a member of the 1% as Romney, given his background, which includes private prep, the Ivy League and law school. Okay, so he doesn't have a bajillion dollars like Romney, but, believe you me, his net worth is considerable.

We need sweeping reform and we aren't likely to get it. And I'd ask why. None of the problems we face as a nation are insoluble, nor are they insurmountable. To me, it looks like Simpson-Bowles came up with some good solutions. Why weren't they implemented? I'm no expert on securities law, but it seems patently obvious that some seriously shady shit went down on Wall Street. Yet, no prosecutions. Hmmm, odd. We're sitting idly by, while our government performs targeted assassinations of American citizens, intrudes into every aspect of our lives and blithely conducts wars without so much as a how-do-you-do.

We, as a nation, have been subjected to two generations of outright bullshit from our supposed "leaders" and now have fewer rights, less money and less freedom, while we're busy fighting each other over stupid shit like gay marriage. And, no, Brian, I don't mean gay marriage is stupid, I mean it's a contrived "issue" that is sufficiently divisive to keep our focus off what's really happening.

End rant.

Abortion and gay marriage are contrived issues only by those who've contrived them.

On abortion, the issue was settled a long time ago but conservatives keep on wanting to reflight a lost flight.

On gay marriage, legalize it and be done with it like other advanced countries in the world. It's only an issue for the conservative side.

Like I said before, conservatives will cave sooner or later. So might as well give up now so that the country can move forward.

We will continue to have legal abortion. It could be 10 years or 5 decades, but gay marriage will be legal at the Federal level. Mark my words.

With a Democrat in the White House and Democratic nominee to the Supreme Court, we will put those "contrived" issues to rest sooner rather than later. So, Allan, they are not "all the same." One side is better than the other.

No, not personally with Romney. Yes, personally with Bain Capital as a corporation, just like I have an issue with General Electric paying to income taxes. Minute distinction.

Well said Allan. Completely agree. And yes, I had to google Al Jolson. Took me a while but LOL on that one.

I would put abortion in with gay marriage as another contrived issue as well.

Absolutely right about the "proles" having no voice (and yes, had to google that too). And sorry to say, but I would have to put doctors, engineers, and lawyers in this working class group as that is the reality these days. The GOP is completely beholden to the 1%, while the Dems completely beholden to the unions and their welfare base. The end result is the lower class gets more hand outs and tax breaks, while the top 1% and the corporations also end up with more hand outs and tax breaks. The W2 working class bees end up footing the bill for everyone.

To use Brian's dinner analogy. The guy ordering lobster and wine somehow do not need to pay because somehow making "job creators" pay would make them stop creating jobs. Then you have 50% of the table entitled to their meal. Leaving the middle class to pay for everyone.

Horseshit.
1. Billionaires "paying no taxes" first of all is horseshit. Show me one billionaire that paid no taxes.

2. "Fair share" is subjective.

3. Amount of dodging/cheating is irrelevant. Intent and legality however is relevant.

(a) Shutting off a cash register so not to register sales and registers sales tax is cheating. And folks that willing pay cash to a merchant knowing that the merchant's intent is to do participating in the cheat and as guilty in supporting tax cheats.

Doesn't matter what "benefit" it may have for an individual... You're breaking the law somewhat here.

(b) Attempting to lower one's assessed values to tricks and games as to what Romney has done is purely legal and no different than anyone else trying to lower his/her tax burden. People who rail against Romney doing this better not have submitted his/her or her own reassessment request and/or tried to lower the assessed value by playing games at closing with the closing cost...Otherwise that's a huge double standard there and an immediate loss of credibility imho.

The only people that will get hit the hardest are the people on W2's in upper middle class which will be dragged down. They are the ones that always always pay the largest tax burdens whenever politicians talk about taxing the rich..And it won't even fix the problems.

GE was founded in 1892. You think they've never paid taxes all that time? Don't you think the amount they pay varies year by year?

Their 2012 net income according to Wiki will be about $14 billion on revenue of $147 billion. You think they aren't paying all sorts of taxes of various kinds on that, in many different countries?

As we all know, if your business has a losing year, you will pay less taxes that year. Maybe no income taxes if in aggregate your expenses exceed your income. Of course if you do that year after year you won't be in business for long.

Here's a quote, admittedly from a company spokesman:

GE paid an effective global tax rate of 7 percent in 2010, counting money paid “to the IRS and foreign counterparts” in other nations. That rate was particularly low, Williams said, because the company lost $32 billion in its financial business during the global financial crisis.

According to the company release, GE’s effective tax rate jumped to 29 percent in 2011. The company paid $2.9 billion in worldwide corporate income tax in 2011, and another $1 billion in other U.S. taxes that year, the release states.

flu, it's not all the same.

There are such things as context and proportionality.

An average Joe who attempts to lower his house assessment is not the same as Romney who can summon the County Assessor over to his lawyer's office.

As an average joe, try to get anything past the California Coastal Commission. Try to get any permit to tear down and rebuild a house in San Diego. Romey got a sea-wall, the right to quadruple his house, lower assessments, etc... I'm pretty sure his name and power had something to do with all that.

So, in other words, it's ok to cheat if you're a little person, is that what you are saying?

Thanks for clarifying.....It's your problem, not my problem...Now I definitely understand this progressive way of thinking....Where did I see something similar to this..Oh why yes!

Brian: Go have a cookie and sit in the corner. The adults are talking.

You have now officially turned your brain off and decided to propagandize yourself into oblivion.

How on earth can you, as a supposedly intelligent, rational human being, ever believe in one side being COMPLETELY RIGHT 100% OF THE TIME and the other side being COMPLETELY WRONG 100% OF THE TIME? Dude. And then you turn and accuse FLU of a false equivalence. Sweet bearded Lord Jesus. None is so blind as he who will not see...

I didn't mean literally paid no taxes. I was being facetious.

But this...

(corporate repatriation tax issue)

http://www.bloomberg.com/news/2012-03-02...

is what I'm referring to...

Before anyone suggests that upper middle class w2 slave "rich" should pay more taxes....Read this article, and tell me why the hell are we taxing individual more again, and not addressing these fundamental issues? All yes, that's right because regardless of which political party politicians are in, it would be political suicide to really try to fix the the real problem...So let's just gloss over it by taxing the upper middle class more...

So...If you're really not going to fix the real problem with a real solution don't raise taxes for anyone. Then when we can't afford to pay our bills, deal with it then, when the government really will need to make some tough choices and really take cutting spending more seriously...

For the lazy (inclusive),

BTW: in 2004...repatriation tax was 5.25%...Imagine that...Or better yet, let's keep the profits overseas and borrow money domestically so that we get a lower tax treatment in the U.S. while in countries we operate (like China), we already enjoy very low corporate taxes..

Gee, if you thought it was nice to be a rich individual, it must be really nice to be a corporate conglomerate...

Cash Hoard Grows By $187 Billion In Untaxed Overseas Profits

s U.S.-based companies expand globally, they keep profits overseas, legally out of the reach of the Internal Revenue Service. Lawmakers from both political parties point to the stockpiling as a symptom of a failed corporate tax system, even while they remain deadlocked over whether the U.S. should impose higher or lower taxes on its companies’ global profits.
“You’re seeing more and more business go on overseas, because that’s where an increasing amount of the global purchasing power is,” said Matt Miller, director of public policy at the Business Roundtable, a Washington-based association of chief executives at large companies that backs lower taxes on overseas profits. “We need to get a competitive tax system that is not antiquated and has all the complexities we have today.”
Worldwide Profit Tax
Under the U.S. tax code, the top corporate rate is 35 percent on worldwide profits. Companies receive credits for payments to other governments, and they can defer taxation while the money accumulates. When companies bring their profits home, they pay U.S. taxes after subtracting the foreign tax credits.
Democrats, including President Barack Obama, maintain that the system encourages companies to move jobs and profits overseas. He has proposed a global minimum tax on foreign profits.
Republicans, including Dave Camp of Michigan, the top tax- writer in the House of Representatives, make the opposite argument. They say the residual tax that U.S. corporations face makes them less competitive in global markets and discourages companies from reinvesting their profits at home.
Andrew Williams, a spokesman for Fairfield, Connecticut- based GE, said the company’s operations around the world support U.S. facilities that produce goods for export.
Broader Tax Base
“We believe fundamental tax reform would increase domestic investment, create high-quality jobs and encourage U.S. multinationals to reinvest more overseas earnings in the U.S.,” he said in an e-mailed statement. “We support a broader tax base, lower statutory corporate tax rate and adoption of a territorial tax system even if it means higher taxes for companies like GE.”
Bloomberg analyzed the public filings of 70 U.S.-based companies that had reported at least $4 billion in untaxed overseas profits as of this time last year. The data include information from the two most recent annual reports -- covering the years ending Dec. 31, 2011, and Dec. 31, 2010, for most companies.
A May 2011 study by JPMorgan Chase & Co. found that U.S. companies had $1.375 trillion in undistributed foreign earnings. Last year’s total of $1 trillion held overseas by the 70 companies in the data compiled by Bloomberg made up about three- quarters of the total amount cited by JPMorgan.
Low-Tax Countries
As a result, the latest data suggest that, in all, U.S. companies have more than $1.6 trillion outside the country. The total includes cash and investments in assets such as factories and active businesses.
Companies typically bring home money earned in high-tax jurisdictions that can be offset with foreign tax credits and keep profits earned in low-tax countries outside the U.S., said Edward Kleinbard, former chief of staff of the congressional Joint Committee on Taxation.
“The companies continue to reap the harvest of their years of aggressive tax planning to locate as much of their profits as possible in low-tax foreign jurisdictions,” he said.
Representatives of several of the companies, including Pfizer and Citigroup Inc. (C), said they keep money outside the U.S. to support their international businesses.
‘Matter of Course’
“Citi maintains a presence in more than 100 countries and some of its earnings are retained outside of the U.S. to provide the necessary capital to fund its international operations,” said Jon Diat, a spokesman for Citigroup, which increased its accumulated overseas profits to $35.9 billion from $32.1 billion.
Joan Campion, a Pfizer spokeswoman, said the company repatriates profits “as a matter of course.” That strategy gives Pfizer a higher effective tax rate than its competitors, its chief financial officer, Frank D’Amelio, told investors on a conference call Jan. 31.
Some tax policy analysts, including law professor Thomas Brennan of Northwestern University in Chicago, say companies are holding money outside the U.S. in part because they are waiting for Congress to repeat a 2004 tax holiday law that set a maximum tax rate for repatriation of 5.25 percent.
“Why not do it?” he said. “It’s pure upside. In the worst-case scenario, you’re going to be taxed as you would have been in any event.”
Issuing Debt
Many large companies can meet their cash needs by issuing debt in the U.S. without tapping their offshore holdings, Brennan said.
A coalition of U.S.-based companies, including Google, Cisco Systems Inc. (CSCO), Qualcomm Inc. (QCOM) and Oracle Corp. (ORCL), has been lobbying for the past year for a repatriation holiday.
“Google’s practices are very similar to those at countless other global companies operating across a wide range of industries, such as technology, pharmaceuticals and retail,” Google said in an e-mailed statement.
The temporary repatriation proposal hasn’t advanced in Congress. Obama opposes a one-time tax holiday, arguing that it would be a giveaway to big corporations.
Doug Thornell, an adviser to the pro-repatriation coalition, called the inaction a “missed opportunity” for Congress.
“The money keeps piling up while Washington fiddles,” he said in a statement.
Permanent Change
Other companies, including International Business Machines Corp., have emphasized a permanent change and not a one-time holiday.
Camp has said he prefers to address repatriation as part of a tax-code overhaul. His draft proposal would shift the U.S. to a territorial tax system that exempts 95 percent of foreign profits. That would resemble the systems of other major economies, such as the U.K., Japan and Germany.
All four Republican presidential candidates have endorsed a territorial tax system. In an essay in the Boston Herald yesterday, Mitt Romney wrote that companies will continue to park profits outside the U.S.
“With our high rates and our punitive incentives, we are shooting ourselves in the foot with a machine gun,” he wrote. “This has to end and I will end it.”
Under the Obama or the Camp approach, the accumulated offshore profits must be addressed, said Kleinbard, now a law professor at the University of Southern California in Los Angeles.
Camp Proposal
“It would be extraordinarily and unnecessarily complicated to imagine a world in which old earnings were taxed one way and new earnings taxed a different way,” he said.
Camp has proposed a 5.25 percent tax on the accumulated offshore profits to finance a transition to a territorial system. In his proposal, that one-time revenue would help offset the cost of the territorial system.
Representative Kevin Brady, a Texas Republican, has sponsored a bill for a repatriation tax holiday. He said the punitive nature of the U.S. tax code is illustrated by the growth in offshore holdings.
“It’s both a cry for immediate repatriation and an assurance for fundamental tax reform that there will still be stranded profits,” Brady said in an interview. “The pot will still be large and I think it will continue to grow exponentially.”