Proposition 13
In an Aug. 25 letter, John Kabateck, a lobbyist for the National Federation of Independent Business, complains that in the search for solutions to California’s budget mess, some have seized on the opportunity to finally fairly tax commercial property.
Kabateck claims that modifying Proposition 13 to exclude property owned by businesses would be unfair because it would be passed on to consumers, other businesses, tenants or shareholders. What he fails to show, though, is any rationale to justify owners enjoying a tax subsidy at the expense of others.
When Proposition 13 was passed, widows were trotted out for the cameras, talking about losing their beach homes. We didn’t see oil companies or huge landowners begging for an annual subsidy. But they are the ones benefiting, and they quietly take their subsidy every year, all the while enjoying the social infrastructure they no longer support and reminding us that the widows are barely still safe.
Consider this example: A relatively small 8-acre parcel of land was purchased from a large landowner in Irvine in 2000. That land had been previously assessed at $160,000,but it was sold for $7.5 million. Prior to the sale, that parcel (and the surrounding ones) enjoyed each and every public service that it enjoyed after the sale. But the public was deprived of the $80,000 in annual property taxes that should have been paid every year.
And while the landowner was happy to tout the values, benefits and services of Irvine, it was not willing to pay its fair share for those benefits and services.
Proposition 13 provides another irrational result,causing landowners to hold on to property that would otherwise be sold, simply because of the grossly unfair economic benefit provided, primarily to the landowner. Many of the land barons can use that benefit to offer competitive lease rates and put new investors at a disadvantage.
Even if the benefit is provided to the land user (tenant, retail or other), there is no rational basis for the subsidy.
Why should a tenant at one mall enjoy any different tax rate on his landlord’s capital than a tenant at a newly constructed mall?
Kabateck points to the harm that will befall the dry cleaner, small apartment owner and the apartment tenant if Proposition 13 is modified. Most proposals would allow for a small business/landlord exemption, perhaps up to $1 million, and allow that basis to be transferred to a new holding, and phase-in rules would be easy to define.
Finally, Kabateck complains that shareholders and customers will bear the burden of a commercial property exception to Proposition 13. He fails to note that those shareholders and customers may well be out of state, and are happy to enjoy their subsidy as they sit on their Florida yachts thanking their lucky stars for the generosity of the California tax system.
Commercial entities need to pay their fair property tax, regardless of when the property was purchased. This would go a long way, indeed, probably all the way, to solving California’s budget woes.
Frederick Judd
Irvine
Elvis vs. Beatles
August was birthday month for the presidential hopefuls. Barack Obama turned 47. He was on the campaign trail talking about energy independence. John McCain celebrated turning 72 the day he announced his vice presidential running mate.
Clearly, the difference in the candidates’ ages,which some argue is another word for experience,is a defining issue.
On the one hand, you have McCain, who was born long before the computer revolution. That is troubling to younger voters. On the other hand, you have Obama, who was born just a few years before The Beatles invaded America. That is equally troubling to older voters.
To this 60-something voter, age will not be my deciding factor in this year’s campaign for the White House. Judgment will be.
Obama’s youth doesn’t bother me. There are hundreds of respected politicians, business leaders and scholars who were born in the early 1960s.
I have a few thoughts about who or what might impact a McCain or Obama victory this fall. In relative order they are:
n John Wayne, Elvis voters: They remember the day President Franklin D. Roosevelt died and the end of World War II. They also remember the start of the Korean War, Dwight Eisenhower’s two successful presidential campaigns, the formation of Israel and the Edsel failure. Their first television sets were black and white.
In many ways, their collective view of the world was shaped by Richard Nixon, the Soviet Union’s invasion of Hungary and the surprise launching of Sputnik.
If McCain hopes to win in November, he has to keep a huge percentage of these voters in his column.
n Make love, not war voters:
Baby boomers were born from 1946 to 1964. When I was growing up in Northern California, two shattering coming-of-age experiences took place within weeks of each other. The first was President John F. Kennedy’s assassination in 1963. A little more than two months later, the world started spinning in another direction after John, Paul, George and Ringo appeared on “The Ed Sullivan Show.”
The other watershed event was Neil Armstrong walking on the moon five years later. By the time the first boomers began graduating from college, support for, or opposition to, the Vietnam War was tearing families apart.
In order for Obama to win this fall, he has to continue addressing boomers’ concerns.
Once in the Oval Office, the way each candidate assesses a situation will be determined by four factors: his age, temperament, advisers and life experiences.
First, there’s no fudging McCain or Obama’s ages. Second, their composure under fire is being tested every day on the campaign trail. Third, vice presidential running mates Gov. Sarah Palin and Sen. Joe Biden will send important signals to voters about the kinds of people each hopes to attract to his administration.
And last, their life experiences have been defined, in large part, by growing up with Duke Wayne and The King or Apollo 11 and the Fab Four. Both have their strengths and their weaknesses.
Denny Freidenrich
Laguna Beach
Talking Heads
A retired major general and three-war veteran once told me: “The minute you pin on stars, two things happen. First, your family will never again lack for provender. And second, you’ll never again hear the truth.”
The friend was certainly half-right. Retired flag officers get splendid jobs. Whether they hear the truth may be debated. Whether they can tell the truth is the subject here.
Today, both presidential candidates enroll dozens of retired senior officers as paid and unpaid advisers. Recently, two Barack Obama supporters have engaged in attacks against John McCain. Tony McPeak, a former Air Force chief of staff and a congenitally skinny fellow, has commented on McCain’s waistline. Former NATO commander Wesley Clark, who spent two years at Oxford between West Point and Vietnam, has wondered whether McCain’s prisoner of war time really matters as positive preparation for the challenges of the White House.
One thing may be safely concluded from all this. Retired flag officers can be as mean, petty, nasty and narrow-minded as anybody else. But should that preclude their participation in political discourse, as both media and as partisan advisers?
The answer should be a resounding no,let ’em yammer. But only if we understand what they’re offering the American people,and what they should be offering, but currently are not.
First, let’s dispose of the obvious. Retired senior officers can be wrong.
At issue here is the nature of the military profession as a profession, and that profession’s relationship to the society that sanctions it.
The military, in exchange for its (eroding) monopoly on violence, must defend the nation even unto death. It must remain totally apolitical; its ultimate loyalty must be to the Constitution.
Today, the military-society relationship has been damaged in three ways. It started long ago, and there’s plenty of blame to go around. But it must be addressed.
n First, our military is imploding. This country is rapidly approaching a condition best described as “defenseless on a trillion dollars a year.” Waste, fraud and abuse are smaller problems than the military’s addiction to preposterously expensive weapons. Retired officers need to educate the American people on why we can’t maintain a reasonable Navy, why our planes are falling out of the sky and why our Army’s half of the size it ought to be,and why no conceivable budget increases can fix this.
n Second, retired officers must explain to the people that the national security establishment, an early Cold War creation, no longer avails. A new, fundamental debate is needed, with everything on the table, including the nature of the Defense Department itself.
n Finally, retired officers must work to craft a new relationship between the military and the people. Between the present unsustainable volunteer system and a direct, unlimited federal draft, there are many alternatives. The citizenry must be brought back into the common defense.
Bottom line: The next time you run across some retired officer on the op-ed page or the tube or the net, it’s legitimate to wonder, is this person addressing issues that need to be addressed? Or is it just more of the same, whatever that “same” might be?
Michael Glueck with Philip Gold
Newport Beach
