patrick.net

This is really, really sad: :(

http://www.luxist.com/2008/02/24/protests-prompt-a-menu-change-at-posh-english-restaurant/

@sybrib,

No, haven't capitulated (yet). Btw, I think you meant LILLL, not SQT.

@DennisN,

Thanks for the correction. Yet another eggcorn to add to the collection.

Around here goosies are my friends and neighbors. No matter where you go around Boise there are goosies walking around and honking.

I really enjoy them.

I also have a semi-auto Winchester SuperX2 12 gauge, a hunting license, and can easily get goose tags.

My kitties and I love poultry.

Well, I guess Idaho is a no-nonsense state.

In Idaho, ballot initiatives are by law normal statutes. In California, the initiatives are constitutional amendments.

In Idaho the legislature can overturn initiatives by regular legislation.

A few years ago, some smarty-pants guys got an initiative on the ballot for state legislature term limits. The voters passed it.

Then everyone realised that this was a dumb idea here. The state senate and house only meet January through March and the salary is $16K. Most state legislators don't run for re-election many times because they can''t afford it.

So the legislature here - Senate and House - overturned the initiative.

There are now no term limits in Idaho, and the general population now is thankful of this fact.

OK, I have to admit, I do very much like your idea of doing away with the deductions from the federal income tax, for mortgage interest and for property tax.

This might also help with other challenges on the federal budget.

dont forgot in p13 anything bought pre-1978 is NOT subject to% yearly raise.
1977 tax rate 4eva.

And I REALLY MEAN FOREVER children inherit the p13 tax basis on home (up to 1 mill per boomer) and corporations cant die anyway, just get sold.

Its going to be hilarious in 50 years when we will have the Capitol records building (and all older buildings) paying 50 cents a year property tax and new buildings(or newly acquired) paying 30 million a year in property tax for same sq footage building. How can you compete? you cant. so we have landed aristocracy both at the business and individual levels.

DennisN,

I like your idea and it will definitely benefit me personally, but I think it has a hard time getting traction in a heavily indebted country like ours.

What I propose has a better chance of getting passed, levy an extra charge on mortgage for its lifetime. In Australia, you actually have to pay extra to the government (something in the neighborhood of several thousand to tens of thousands depending on mortgage loan size) if you take out a mortgage loan on your PRIMARY residence.

HelloKitty Says:
February 25th, 2008 at 6:59 pm
"dont forgot in p13 anything bought pre-1978 is NOT subject to% yearly raise.
1977 tax rate 4eva."

Can you cite a source for that?

sybrib Says:
February 25th, 2008 at 6:47 pm
"OK, I have to admit, I do very much like your idea of doing away with the deductions from the federal income tax, for mortgage interest and for property tax."

So basically people get to pay tax on tax, yikes!

This is way off topic, but I got a great chuckle out of it, courtesy of the folks over at Calculated Risk:

http://www.youtube.com/watch?v=I6IQ_FOCE6I&eurl=http://calculatedrisk.blogspot.com/

Repost w/ the correct url:

This is way off topic, but I got a great chuckle out of it, courtesy of the folks over at Calculated Risk:

http://www.youtube.com/watch?v=YuAJHaXKgFk&feature=related

Freaking hilarious. What else is left now?

So if you're rich and can buy your house outright you contribute zilch to city services. Let all the common folk pay for it.

Brilliant.

OK, I have to admit, I do very much like your idea of doing away with the deductions from the federal income tax, for mortgage interest and for property tax.

Get rid of phantom depreciation deductions for property investors too. That's part of the reason property values are so out of whack, and so damn expensive for the non-investor class. You can make almost as much pretending that your investment property's value is going down as you can collecting rent.

there is whole society that worships Howard Jarvis(wrote p13) and they exist to keep it 4eva alive.

http://www.hjta.org/node/320

BTW: June 6th, 2008 is the 30th anniversay of Prop 13

30 years of inequity and poor land use (poor elderly on SSI in beach front homes which are now crapshacks....near the beach/employment centers.....)

I hope someone starts a 'move outta CA on june 6th day' and every year people can rush to uhaul and leave CA forever.

@malcolm
I might be confused about that part of p13 where pre p13 owners do not pay the 2 percent increase.

her is a quote from a good article
"For purposes of transition from one system to another, Proposition 13 rolled California property values back to their assessed fair market values in 1975-76. California properties which have not been sold or had substantial new construction since the 1975-76 assessment retain the 1975-76 base assessment value indefinitely."

http://vls.law.vill.edu/orgs/tax-law-compendium/Student/prop13.htm

"In Anaheim, for example, the Walt Disney Co. pays on average 5 cents a square foot for some of the Disneyland property it has owned since the 1950s. By contrast, a person who just bought a home at the median Orange County price of$428,000 pays $1.71 a square foot in property taxes."

"In downtown Sacramento, for example, the Holiday Inn pays 22 cents a square foot, while the nearby Sheraton Grand pays $1.45 a square foot, according to data collected by the California Tax Reform Association, an advocate of Proposition 13 reform."

Well i read most of the text of the actual law on the howard jarvis shrine:
http://www.hjta.org/node/67

cant tell if pre 78 purchases are subject to 2%....any accountants here?

You see, I'm not that smart so I need something to help me understand the subprime mess. Fortunately, somebody put this together.

http://docs.google.com/TeamPresent?revision=_latest&fs=true&docID=ddv7hj34_03774hsc7&skipauth=true&pli=1

WARNING: Language

OT to the thread, but may be of interest to Fortress Watchers...

Cupertino's prime area, in the foothills west of Hwy 85, top shcools and everything...

21609 Edward Way
For Sale: $1,325,000
Last Sold Nov 2006: $1,366,000

21422 Elm Ct
For Sale: $1,525,000
Last Sold Dec 2007: $1,567,000

21897 Shattuck Dr
For Sale: $1,350,000
Last Sold Nov 2007: $1,488,000

1100 Elmsford Dr
For Sale: $1,590,000
Last Sold May 2007: $1,625,000

11622 Seven Springs Dr
For Sale: $1,595,000
Last Sold July 2007: $1,670,000

Nice Haircut, Suxorz!

And speaking of haircuts, anyone see the action on GOOG today?

OT but the IRS has now made arrangements for those wanting to deposit their "rebate" directly into their IRA! Use IRS Form 8888 (must be REALLY lucky) or begin on line 73 (Form 1040) to have it deposited directly.

This will apply as a contribution for 2008.

*Not Inv./Tax Advice

DennisN,

Loved it! Are there some loopholes that are bound to be exploited? Sure. Is it healthier than what we currently have? You bet.

"Proposition 13 allows for an upward adjustment in the base assessment value each year for inflation, however it caps this annual adjustment at 2% of base value."

HelloKitty, yes, the next sentence clarifies it. The base amount is set at the 75-76 level "for ever" but is adjusted upwards a maximum of 2% per year. There's no freeze for the older transactions, it was passed in 78 and rolled all the prices back to the 76 level. You're correct in principle, if there are no transfers or significant rennovations the base assessment is the 76 value plus a max of 2% per year.

Oh... "Suckers"!

Thanks SP. (Also notice they didn't even leave in a "fudge factor" to cover the commish)

There's one other angle that gets left out of the P13 debate. property tax is not 1% of the assessed value. P13 allows additional taxes, like school bonds, to be added in addition to the 1%. Here in San Diego there is another 10th of a percent that was set to expire but was added on for another 30 years with prop MM. The tax bills are closer to 1.2% of the assessed + 2% annually adjusted values. Voters can always add to the tax rate, but it requires what is called a super majority which is an election where 2/3rds have to vote in favor. The logic for that is that it wouldn't be fair to have a simple majority vote for the increase when not everyone would be paying it directly. I use the word directly because I've said before that owners occupying their homes pay directly and renters pay indirectly since the tax is built into the price of the monthly rent.

In Anaheim, for example, the Walt Disney Co. pays on average 5 cents a square foot for some of the Disneyland property it has owned since the 1950s. By contrast, a person who just bought a home at the median Orange County price of $428,000 pays $1.71 a square foot in property taxes.

This is the prime example of how Prop 13 was "overbroad" to use some lawyer speak....

Established corporate giants such as Lockheed, HP, Intel, Disney, Warner Bros., Gallo Vineyards, and their brethern pay pennies on the dollar for property taxes when compared to new innovative companies. This is a huge disincentive for start-ups contemplating doing business in California. It may be easier to get VC funding in Silicon Valley, but the flipside is that you are going to be taxed at a higher rate. A start-up competing with, say, Apple Computer or HP will pay an order of magnitude greater property tax.

DinOR Says:
February 26th, 2008 at 7:55 am
"OT but the IRS has now made arrangements for those wanting to deposit their “rebate” directly into their IRA! Use IRS Form 8888 (must be REALLY lucky) or begin on line 73 (Form 1040) to have it deposited directly."

God dammit this tax code is a cluster f-ck. That's so not right, here I am having to withdraw excess contributions because of penalties because up until this minute you could only deposit "earned income" into an IRA. I couldn't sleep last night because on top of that nonsense the Feds without any notice "corrected" my taxes for 2006 by adding back in my state refund (normally right) but because I had AMT in 2005 which replaced the normal itemized deductions my tax preparer correctly did not add it back in. Yesterday I was on the phone with the state going "How in the world can you have a different figure here when I filed electronically and you are telling me up and down that there were no changes made?" Then come to find out they made changes :(

The OFHEO House Price Index is out for 4Q 2007:

http://www.ofheo.gov/media/pdf/4q07hpi.pdf

One nugget is that starting in March, they are going to release monthly reports in addition to quarterly reports.

Since this is a DennisN thread with Idaho based comments...

I am beginning to think Boise, Idaho is more of a fortress than the Bay area, since it's 5 year appreciation (65%) blew away the Bay area (46%), yet it is still appreciating over the past year (1.74%) while the Bay area has declined (-0.86%).

* Definitely *not* an invite for specuvestors. Or maybe it is. ;)

Dennis, I almost buy into that argument. I've been wanting to put together a business plan for an amusement park in Anaheim but it just isn't feasible because I can't compete with Disneyland's property tax rate.....kidding.
Actually the property values today compared to then would be the major stumbling block but I agree with you that one could make the argument that the tax rate does favor one business over another and creates an unreasoanble barrier to entry.

And speaking of haircuts, anyone see the action on GOOG today?

What happened?

MCM,

Check this sidebar feature from a posting on the main Patrick news page today. http://online.wsj.com/public/resources/documents/retro-MORTGAGE0807.html Go to the median price tab. You will see that the three "fortress" cities in the US apparently are Seattle, Boise, and Salt Lake City.

Getting votes to repeal Prop 13 is trivial if someone has the energy to do the obvious thing:

Publish all property taxes by address in an easy to search way.

Once recent buyers see how much they're being screwed by their older neighbors, Prop 13 will end in a hurry.

Interesting thought Patrick. Income tax amounts are confidential. However I believe property taxes are not. Places like Propertyshark.com already publish the tax basis for property tax. It would be simple to just multiply in the 1% + special assessments to yield the actual property tax bill.

MCM,

Point taken. Even at today's prices though I believe that only drives the median in Boise slightly above 200k. Lord, what were homes in ID selling for in 2001?

It just doesn't make sense - a day of reckoning has to come:

Boise - median income ~58k - median house price ~212k = 3.7 times median income.

SLC - median income ~60k - median house price ~220k = 3.7 times median income.

Seattle - median income ~71k - median house price ~425k = 5.9 times median income.

Middle class debt slave cannot continue to roll debt from one loan to another and increase total debt load indefinitely.

Malcom,

It might make sense for you to have some sort of consulting, side-job gig to show "some" earned income. I agree it's a mess and outside of Patrick.net regulars I doubt a lot of Americans will take advantage of any sort of IRA Direct Deposit program?

MCM,

Hence the term: Peak Debt

(we're there!)

Once recent buyers see how much they’re being screwed by their older neighbors, Prop 13 will end in a hurry.

Prop 13 is just a small part of the generation warfare.

Based on the demographics, it is a war Gen-Xers can't win. We can only find a way to join them.

Part of the problem with that WSJ map is it compares all prices to an arbitrary "peak in Q4 2005" value. That may have been the peak in many places but the peak here in Boise came about a year later, which skews the figures. Boise prices are now soft and somewhat down over Q2 2007, but you would miss this fact from the WSJ map. The out-of-state speculators have all fled, leaving an over-supply of new houses.

DinOR Says:
February 26th, 2008 at 10:01 am
"Malcom,
It might make sense for you to have some sort of consulting, side-job gig to show “some” earned income. I agree it’s a mess and outside of Patrick.net regulars I doubt a lot of Americans will take advantage of any sort of IRA Direct Deposit program?"

Good advice, and I've actually done a small test for that. I put a Criaigslist ad out advertising MBA business coach for startups. I actually got a client. She is dirt poor but onto something in my opinion so I've invested quite a bit of time. I helped her out last week and actually did give her a small bill. I would love to just find some fun part time job, or something really serious full time to devote my life to. Otherwise I'm just sitting back waiting for prices to make sense and then I'm going to do environmental rehabs on homes including solar installations. It seems no one can afford to pay cash for solar and when you have to finance it, it doesn't make sense so I'm going to buy houses, install solar and either resell them or rent them out for eventual resale.