Schwarzenegger Adviser Buffett Hints (CA) Property Tax Is Too Low

[DB]

The same house in Omaha that is assessed for $500,000 would assess in California for more than a million dollars. So even though the California tax rate may be lower per dollar assessed the actual tax collected is just as high per typical home.

[Steel and Fire and Stone]

Hmmmm..now let's think about this for a second.

1. The "M.O." for every leftist is to find the largest, loop-hole resistent stream of tax revenue, and soak it for every dime. Hence, the earlier Clinton/Gore proposal for a "BTU" tax on every energy resource. Or, internet related taxes on every connection. Or, as was passed, the Gore telecommunications (i.e. "for the children") tax on every phone bill. This fits the leftist M.O. perfectly.

2. Because of the environmental restrictions and regulation in California, there is an artificial shortage of homes. That shortage, plus low interest rates has hyper-inflated the median cost of a home. Comparison: New home property permits in Arizona: $7,000. Time from start to build out. 3 months. California: Permits, studies, and related building costs: $40-70,000. Time from start to build out: 1.5-2 YEARS!. Median home price: about $425,000.

3. Because of point 2 above, most folks own on paper way more housing than they can afford. For example: I paid $195,000 for my house in 1992. Current market value: $475,000. Difference in taxes if prop 13 is voided: From about $2500 per year to over $5000 per year. I assure you that I do not make anywhere near the salary required to "own" a $half-million home, nor could I afford the taxes on one.

4. I literally have a "for sale by owner" sign in my garage, and I'm ready to put the house on the market and head out-of-state on a moments notice. The property market will crash as soon as there is any serious possibility (like the election of the Terminator??) of a move to repeal prop 13. I'll be out before the wave hits, rather than be taxed out of my home, and so will 1,000,000 other Californians.

I'm trying to recall: Did Schwarzeneggar say something about "cleaning house in Sacramento", or did he say "clearing people out of their houses in Sacramento". Both Arnold and Buffet are savy Real Estate people. They KNOW what would happen if prop. 13 is repealed, and most likely, stand to cash in on it (i.e. they have substantial liquid assets to buy in on a foreclosure-rich market).

Color me skeptical.

SFS

[EternalVigilance]

Is Buffett a Republican?

Hardly.

He is a bigtime Democrat and Hillary-worshipper.

When he dies, his billions go to Planned Parenthood to help them destroy what's left of the rebublic.

[goldstategop]

The saving grace is most tax paying people would be gone from California for good. If Arnold and Buffett want to save California from going into the Pacific, this a funny way of going about it.

[Steel and Fire and Stone]

Is Buffett a Republican?

No, he is a registered Democrat, and certifiably "big-government" guy (like his buddy ol' Bill Gates). He's especially a "big government" guy when he can profit from it at the taxpayer's expense ...er.. just like ALL Democrats!

SFS

[Roscoe]

Proposition 13 has created all kinds of unintended results including situations where owners of identical home may be paying order of magnitude differences in property taxes - depending solely on when they purchased the home.

The latter purchaser paid what that home was worth to him. Purely voluntary, nothing unfair about it.

[DB]

If that's the case I'm going to go riot in the street against Arnold being elected.

I'll take Cruz before I'll accept someone wanting to raise my property taxes.

These people are amazing... ITS THE SPENDING STUPID!!!

[xm177e2]

For us Republicans the RED LINE is taxes. We're willing to put with about anything from the RINOs but increasing people's tax burdens.

Absolutely. Without lowering taxes and/or holding the line on spending, Republicans have NOTHING keeping us together as a party. If he can't deliver even this much, he won't be getting very many votes at all.

[FairOpinion]

Buffett is too egotistical to have cleared his statement with Arnold, I think he was just talking to hear himself talk, and put his foot in his mouth big time.

[goldstategop]

Exactly Prop. 13 made residential property taxes stable and predictable regardless of when you bought the home. On the other hand I'm all for charging big liberal businesses led by the likes of Buffett the sky's the limit for their property. If they like paying taxes so much, let THEM pay it!

[PhilDragoo]

Not to worry, he's got Pete Wilson and Shulz. Buffett is on the team for show, as a "big name".

The thing about advisors is that he can listen to all of them and follow or ignore their advise as he sees fit. Arnold is a fan of Friedman and anti-socialist. I wouldn't worry about him raising property taxes or any other taxes.

I think he will pleasantly surprise people, especially Republicans and conservatives.

This bears repeating.

Buffett symbolically balances Kudlow and Friedman. That Buffett shot off his mouth is part of the package.

The Schwarzenegger infatuation with Friedman is a matter of long standing record:

In 1980 Friedman broadened his audience further with the publication of a book, "Free to Choose," and an accompanying PBS television series. Millions of people watched "Free to Choose" and came to understand how markets work. One viewer, a young actor named Arnold Schwarzenegger, said in 1994: "In Austria I noticed that people would worry about when they would get their pension. In America, they would worry if they were going to meet their potential. Friedman's books explained to me how a dynamic capitalist system allows people to fulfill their dreams."

Happy Birthday, Milton Friedman

[goldstategop]

Agreed. I think LOW TAXES is the GOP's 12th Commandment or something to the effect. It binds all of us as Republicans together. If that's ditched, we don't even have a party.

[Roscoe]

He wants to empty California of everyone but the governmental parasites

And since their neighborhoods normally have lower assessments, property tax revenues would fall.

[EternalVigilance]

For us Republicans the RED LINE is taxes.

Should have more red lines than just that. Abortion, guns, the homosexual agenda, education...

If we did, the pols would get burned a few times, learn the lessons, and back off.

[PhilDragoo]

I have family in Dan Burton's district where they stop Democrats at a checkpoint and turn them around.

Property taxes went up 50%.

Go figure.

[goldstategop]

Buffett is a perfect illustration of the "fruits & nuts" mentality that's led to California's decline to the brink of oblivion.

[dasboot]

So I guess the only thing keeping anybody of any means in California is the sweet deal on the property tax? Will there be a mass exodus of brains and capital if they tweak the rates upwards?

[EternalVigilance]

Buffett and Schwarzenegger are close friends...he speaks of Buffett in glowing terms. Don't have the quotes handy, but they were high praise.

[goldstategop]

Hmm..... and without tax-paying folks left to nickel and dime to death, I'd have liked to ask Buffett where he thinks they'd get the extra revenues from since those who leech off the state don't contribute to it.

[Steel and Fire and Stone]

..From about $2500 per year to over $5000 per year...

Sheessssh, it's late. That was a foolish statement. What was I thinking??!

Prop 13 limits the property tax to 1% of the valuation, frozen until the property turns over or improvements over $10,000 are made on it, when it can then be reappraised. There are a couple of ways they've worked around this hard barrier (special purpose tax districts for parks, etc.) and there's an increase permitted for inflation, but generally speaking, taxes remain about what they were when the house is purchased.

However, not only will the appraised value be "unfrozen", but the 1% limit would be voided as well. While 1% (plus special assessments) of $475,000 might be about $5,000, if the rate was raised to between 2-3% (as I believe it was in New Hampshire when I was on the East Coast for a year; I could be wrong), then the new property tax rate could be as high as $12,000-15,000 a year.

Now, THAT'S a cool piece of change that could fill in that nasty $38 Billion (illegal!) deficit, and provide Billions more for new Arnold-programs!

SFS