Posted on 12/30/2007 10:14:15 AM PST by ProtectOurFreedom
California faces an estimated $14 billion budget deficit, but the state's independent fiscal watchdog has an answer: Trim some of the tax loopholes, which total $50 billion.
Simple idea. Difficult to make happen.
Each of the hundreds of tax breaks is important to some interest group, political analysts said, and a few of those loopholes are perceived almost as a constitutional right.
Nevertheless, 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 Núñez, D-Los Angeles, said Friday the Legislature will seriously consider Hill's recommendations.
And Steve Maviglio, a spokesman for Núñez, said closing tax loopholes - including possibly changing the mortgage interest deduction - will be part of Democrats' broad considerations of deficit solutions.
"We are looking at it, but no decisions have been made," Maviglio said. "We haven't targeted anything specific at this juncture."
But Hill has. In addition to the mortgage interest deduction, she would end a tax credit for small refineries making low-sulfur diesel, and halt a tax incentive for construction of low-income housing, which she argues has become excessive.
(Excerpt) Read more at mercurynews.com ...
We always seem to get the government we deserve.
The problem with the elected representatives is that they do not care about spending you and my money. They should be making every attempt to find ways to SAVE money not spend more and more. I just heard that Maine will now take by force any gift card money that is not spent withing two or three years. Just like old England the road robbers are out in force.
The people need to not elect these scum unless they will find ways to reduce spending not increase it.
No matter how you want to dress it up, it’s just more taxes.
Here's a simpler idea: Cut spending.
Actual headline: “California to ask the rich and corporations to collect new taxes.”
You can’t deduct the interest charged on mortgages above $1 million. Only up to the $1 million. So on a $1.1 million mortgage you can deduct 1/1.1 of the interest.
I believe we should elimnate the interest deduction. It only makes homes more expensive by creating false demand engineered by the tax code.
John
Yep, depress housing values even more so your property tax base shrinks. Brilliant!
“wait’ll the Dems kill the home mortgage deduction in California. Housing prices will collapse”
It isn’t worth that much to begin with.
If it was a deduction from taxes it would be worthwhile but as a deduction from income before taxes, who cares except those that don’t understand math.
Because the mortgage deduction gives individuals too much control over their own lives. "Targeted" means top-down government control.
All governments aspire to be the Soviet Union if you let them.
I'd say that actually being forced to deal with government spending would induce individuals to reassert control over government spending by electing representatives who were more mindful of the link between government spending and revenue.
You know, kind of like we do at the Federal level.
(Ha ha ouch.)
Why don’t they stop increases in spending for 5 years and allow the state to develop a surplus?
We have so many roads torn up no with street projects with no money to finish them.
Of course that means new bonds will happen to tax property more to pay for this, and in 30 years when bonds are paid, they will still collect that tax with no bond to finance because they never believe in stopping revenue flows for themselves.
They are taxation addicts.
We really need to educate people in California to throw out the clowns and put in responsible people.
I wrote the newspaper and suggested that she be spayed.
The reason interest is deductible has nothing to do with encouraging home ownership or any other social engineering goals. It's deductible because income should not be taxed twice.
Before 1986 all interest paid was deductible for this reason - remember? Back before the Chief Tax Collector and So-Called Republican BobDole pushed the "Tax Reform Act of 1986".
So the deduction is not a "gift" from the Beneficient and All-Knowing Legislators. It's a function of fairness and understanding the chain of taxation that has been inflicted on us.
Not only should the mortgage interest deduction be preserved, we should go back to having all interest be deductible. The only reason it was revoked in the first place was to pay for the profligacy of the federal government in the 80's. Oddly, it didn't work, and they kept spending and the deficit keeps growing.
The simple answer is to SPEND LESS. And in California that means STOP LOOTING THE AMERICANS TO PAY FOR MEXICO.
ending ... homeowners to deduct mortgage interest off their state personal income taxes.
LOL! Go for it.
Maybe not always. You and I are an endangered specis in California being political to the right and well informed. (Not to be redundant.) We are getting the government the leftists and the Mexican socialists deserve. Fargin bastages.
Regards
A good place for California to start would be to privatize their prisons. Some prison guards are making more than $100,000 a year:
http://www.signonsandiego.com/uniontrib/20060228/news_1n28guards.html
Should five per cent appear too small
Be thankful I don't take it all
Cos I'm the taxman, yeah I'm the taxman
If you drive a car, I'll tax the street
If you try to sit, I'll tax your seat
If you get too cold I'll tax the heat
If you take a walk, I'll tax your feet
Taxman!
Cos I'm the taxman, yeah I'm the taxman
Don't ask me what I want it for (Aahh Mr. Wilson)
If you don't want to pay some more (Aahh Mr. Heath)
Cos I'm the taxman, yeah, I'm the taxman
Now my advice for those who die
Declare the pennies on your eyes
Cos I'm the taxman, yeah, I'm the taxman
And you're working for no one but me
Taxman!
Liberals are such a hoot.
The anti-gunners like to engage in "gun buy backs", implying that the government was the source of people's guns and that perhaps it was a mistake for the government to ever have allowed people to have them.
Similarly now, the liberals would like to treat the deduction for home interest mortgage as if it was money which originated with the government and was then gifted to the taxpayers.
My own home mortgage wouldn't exist except for the tax deduction, both federal and state. If the federal deduction disappeared, my mortgage would probably be paid off that week. The progressive income tax makes it very painful to lose deductions.
Isn't this exactly what the home loan industry needs? Tens of thousands of non-performing loans that will go into foreclosure and an additional tens of thousands of performing loans that will disappear from people's portfolios.
The economic expansion that was occurring just as Arnold took over as Govenator has bought the Kalifornia liberals some time. But naturally the liberals used the opportunity to dig the fiscal hole even deeper than was imagined prior to the recall of Davis.
Regardless of what is done in Kalifornia, any cessation of the prior economic expansion will cause blood to run in the streets; and perhaps not just metaphorically. The government employees are not going to like what is about to happen.
California tax collectors are really going to be screaming when the full impact of the drop in property values significantly drops tax revenue. What Prop # is it that places tax value on latest selling price? Some property values in Cali have dropped 45% in the last year. Throw that in with foreclosures going sky high and the mortgage companies bailing for whatever they can get at auction and the tax revenues will go down the tubes accordingly.
It’s Prop 13, if you know what I mean!
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