Co-published by Newsweek
When the DeVoses’ 164-foot yacht was untied from a Huron, Ohio dock, it was flying a flag of the Cayman Islands.
Co-published by International Business Times
Proposition 13’s backers have fended off legal challenges and watched as many efforts to amend it in Sacramento fizzled. What they haven’t faced is a sustained ground campaign, but that will soon change.
Leo Hindery Jr. remembers the call he got the night before he was to testify before Congress, in September of 2007, to close a tax loophole enjoyed by private equity investors. It was from Stephen Schwarzman, co-founder of the Blackstone Group, the largest private equity management firm in the U.S.
A broad-based coalition today launched an effort to reform Proposition 13, the 1978 law passed by voters that many critics believe imposed a fiscal stranglehold on the Golden State.
The strategy of the “Make It Fair” coalition is clear – to split the business community while keeping homeowners on the sidelines. In doing so, advocates have put themselves in a strong position to challenge what has been called the third rail of California politics.
“Make It Fair” is proposing a critical change to the state’s tax law: closing loopholes that have allowed commercial properties to be taxed at nearly the same level as they were in 1975 (tax rates for residential property would remain unchanged). The coalition claims that California could gain an additional $9 billion a year if these loopholes are eliminated – revenue that could be used for schools, social services,
» Read more about: New Prop. 13 Reform Effort Could Succeed by Splitting Business Interests »
How much do the newly enacted tax hikes on the wealthiest Americans actually affect them? Hardly at all.
Almost all of the debate that convulsed Capitol Hill in December concerned the reinstatement of the highest marginal tax rate on earned income — that is, on wages and salaries. But as Fitzgerald said, the rich are different from you and me, and one of the primary ways they’re different is that they don’t get their income from wages and salaries.
In 2006, the bottom four-fifths of U.S. tax filers got 82 percent of their income from wages and salaries, a Congressional Research Office study found. The richest 1 percent, however, got just 26 percent of their income that way; for the richest one-tenth of 1 percent, the figure is just 18.6 percent.
The study also looked at dividends and capital gains. The bottom four-fifths got just 0.7 percent of their income from those sources.
