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The President’s “Offer”

The President’s “”Offer””: That is not a typo. I intended to have two sets of quotation marks around the word “offer”. That’s because it is unspeakably absurd to call what the president proposed on the fiscal cliff an offer. It was more like a liberal wish list. There was literally nothing in this proposal for Republicans to like and a liberal (pun intended) sprinkling of elements that most Republicans absolutely hate. For example, the proposal (I will no longer flatter this monstrosity with the label “offer”) raises taxes on families making over $250,000 ($200k for individuals) by more than would result from going over the “fiscal cliff”. On top of that, Obama threw in some stimulus spending, an extension of the 99 weeks of unemployment benefits, and an extension of the payroll tax “holiday” – which means more and more Social Security benefits are borrowed. This package actually both increases taxes and increases the deficit because there is so much additional spending. As a false gesture towards something reasonable, the president says they will make some… Read More

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Taxes and Culture

Taxes and Culture: Being a CPA and all, I often opine in these pages about things fiscal, financial and economic. Today, in the mainstream, establishment press, all you hear about is the “fiscal cliff” and taxes and such. I care a great deal about taxes and the deficit, as you regular readers well know. And, you will hear much from me about these issues in the coming months. But, the underlying issue before us right now with the so-called “fiscal cliff” is, in my opinion, not actually fiscal or financial. It is cultural.

As you may not be aware, I have always believed that the culture of an organization is the biggest single attribute that will determine the success or failure of said organization. In my 25 year business career, I was obsessed with the culture of our company and with that of companies we might acquire or with which we might do business. A business with a strong culture of customer service will empower people with service skills and will change or weed out those people who don’t care how they treat others. If a company has a culture of dishonesty, even an honest person will cheat now and then because… Read More

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Gas Tax Revenues Set New Record

It’s bad enough that California’s gas tax is among the highest in the nation. It’s even worse that the gas tax goes up whenever gas prices rise.

Today I released data showing that high gas prices have resulted in a record windfall for government at the expense of California consumers.

California motorists paid a record $8.3 billion in state and local fuel taxes during the 2011-12 fiscal year.

From July 1, 2011 to June 30, 2012, the California State Board of Equalization collected $6.9 billion in motor vehicle fuel taxes, up from $6.7 billion the prior year. Excise tax revenues accounted for $5.2 billion, while sales tax revenues accounted for $1.7 billion.

Over the same time period, the state collected $1.4 billion in diesel fuel taxes, up from $1.2 billion the prior year. Excise tax revenues accounted for $343 million, while sales tax revenues accounted for $1.1 billion.

Read More

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A World of Debt

A World of Debt: It is no surprise to readers of these pages that we have a debt, spending, deficit and growth problem in the United States today. What you may not know, however, is that the rest of the developed world is suffering from the same malaise, albeit to different degrees. And, the causes of said malaise are the same the world over, again with variations only in degree. But, what is really disturbing is that governments around the world seem to be implementing exactly the same “solution” for the debt, spending, deficit and growth problems that abound everywhere. It’s disturbing because this “solution” will not work – at least it won’t work without potentially severe side effects that may make the medicine as bad or even worse than the disease.

Allow me to explain.

The U.S., Japan, the U.K. and continental Europe are all currently either in recession or experiencing very slow growth. All have massive, if not record, budget deficits, and all have record debt to GDP ratios. That means that the debt issued by the respective governments is a greater share of their economies than ever before. In fact,… Read More

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I Applaud the Howard Jarvis Fire Tax Lawsuit

Today, the Howard Jarvis Taxpayers Association filed a class action lawsuit against Jerry Brown and the Legislature to overturn the unconstitutional Fire Tax.

As one of California’s elected tax officials, it’s my responsibility to use my elected office to ensure that taxpayers are treated fairly.

Accordingly, I commend the Howard Jarvis Taxpayers Association for bringing together Californians from every walk of life and region of our state to right the wrong that is the fire tax.

The Governor and Legislature’s willingness to impose such an unfair and regressive tax in direct violation of the Constitution should serve as a wake-up call for all freedom-loving Californians.

I am pleased to lend my full support to this lawsuit, and I look forward to seeing it prevail.… Read More

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Tax Code Reform Survey Results

Survey Results: You haven’t heard from me in a while. No need to check the obits, I’m still here. What with 2 national conventions, a busy month home in the district, and some vacation on my part, I thought I’d give us both a little break. Not that either of us could avoid the non-stop national campaigning.

When I last wrote you, I included a survey with various proposals on what to include and not include in a potential income tax reform bill next year. The results are detailed below. But, here is my “executive summary and analysis”:

• A majority of you agreed with all of my proposals.

• The most popular proposal with you all (76.9%) was to eliminate all deductions and credits except charitable contributions, home mortgage interest and non-elective medical expenses.

• The least popular proposal, albeit still over 50% at 56.3%, was to go to only 2 tax rates, one for incomes below $100,000 and one for incomes above that amount. 27.2% of you believe that we will need more rates than that, and 15.2% of you want only one rate.

• You may recall that I had a joke answer… Read More

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California’s Eminent Domain Heist

It will not surprise anyone reading this that serious problems persist in the housing sector. Many solutions have been proposed, including several pieces of legislation I have introduced in Congress, to help homeowners, completely reform our housing finance system and fix the housing crisis. Most of the proposals out there are focused on struggling homeowners trying to make the next payment and are about the greater good of the country. However, you may or may not be surprised that a couple of California cities have decided to not waste a good crisis, to paraphrase the now infamous axiom, realizing there is a lot of cash to be made off underwater homeowners.

In an astonishingly expansive and untenable interpretation of eminent domain authority, several local governments, notably San Bernardino, have proposed plans to override private property rights through a scheme that is specifically designed to make money for over-leveraged cities. This scheme is being sold as assistance for hurting homeowners, but it is purely a ploy to use federal tax dollars to seize distressed home loans and force unconventional, yet profitable loan modifications.

However, not only will… Read More

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A New Tax Code in 2013?

*NOTE: SPECIAL SURVEY EDITION. This week’s edition includes an interactive survey. After you finish reading, please make sure to assess my plan and tell me what you think!

Taxes: Taxes are always a big issue in politics and public policy. However, right now there is a crescendo of agreement building in Washington that it’s time to make some fundamental change to our tax system.

The debate in Washington of late has been confined to the so-called Bush tax cuts, all of which are scheduled to expire at the end of this year. Essentially, should we extend all of them, none of them, or some of them? The erudite readers of these missives (that’s you) have heard all of this before and know the arguments for and against the extension and all about taxing the “rich” and such. So, I won’t repeat them here. Economists are unified in their predictions of recession if we are allowed to go over the “fiscal cliff” on December 31 and allow all of the tax cuts to expire and the sequestered spending cuts… Read More

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