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~ Featuring ~
Will the Split-Roll Property Tax Destroy California?
by Wayne Lusvardi
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Oil Prices Have Been Rising & $4 A Gallon Gasoline
Would Put Enormous Stress On US Economy
by MICHAEL SNYDER.
Iran admits: Regime working with scumbag-Soros organization
by Gary Willig
{ israelnationalnews.com } ~ Iranian Foreign Minister Mohammad Zarif said Sunday that the Iranian government has worked closely with billionaire scumbag-George Soros' Open Society Foundations (OSF) organization... Zarif made the remarks in response to questions raised in the Iranian parliament. According to Zarif, the activity began before he entered his current position, and he boasted that he had succeeded in "keeping the activity organized." OSF has funded a number of far-left organizations in Israel which seek to change the policy of Israel's government. According to NGO Monitor, among the top beneficiaries of OSF funding is Human Rights Watch, which has been criticized for targeting, and falsely libeling, the state of Israel. Another is J Street, which describes itself as “pro-Israel” but has been termed anti-Israel by others for, among other things, welcoming proponents of a boycott on Israel at its national conference and honoring IDF soldiers who refused orders. Another recipient of OSF funding is the Institute for Middle East Understanding, which, NGO-Monitor reports, is headed by staff who have accused Israel of war crimes and have termed Israel an “apartheid state. The extreme-left Israeli group B’Tselem also receives OSF funds. B’Tselem is notorious for publishing one-sided reports, and for inflating Arab civilian casualty figures. For example, the group included hundreds of Hamas policemen in Gaza as “non-combatants,” and counted Sheikh Ahmed Yassin – then the leader of Hamas – as not a definite combatant...Massive MS-13 Bust in California
by Lloyd Billingsley.
Kavanaugh Hearing Back on Track After
dummycrats[-Dems’ Attempt to Shut it Down
by David G. Savage, Jennifer Haberkorn and Sarah D. Wire
{ libertyheadlines.com } ~ Senate dummycrats-Democrats wasted no time Tuesday in moving to block the confirmation hearingof Brett M. Kavanaugh, President Trump’s Supreme Court nominee... refusing to allow Republicans to even introduce the candidate. Senate Judiciary Committee Chairman Charles E. Grassley (R-Iowa) had barely begun his introductory remarks when dummycrats-Democrats on the committee repeatedly interrupted and called for the proceeding to be halted until members had more time to review documents concerning Kavanaugh’s past activities working in the White House for President George W. Bush. The disruption was part of a coordinated plan by the dummycrats-Democrats to disrupt the hearing, as several news organizations reported on Tuesday, including Kasie Hunt of NBC News. “What is the rush?” asked Sen. scumbag-Cory Booker (D-N.J.). “What are we trying to hide?” Most dummycrats-Democratic members of the committee joined in the protest, refusing to allow Grassley to put the hearing back on track. Kavanaugh sat silently, smiling, even as several audience members shouted their support for the dummycrats-Democrats’ protest. Several were removed from the chamber. At one point, Kavanaugh began to introduce his family, but again was interrupted by dummycrats- Democrats. dummycrats-Democrats were responding to the White House’s decision on Monday to withhold about 100,000 documents concerning Kavanaugh’s past work. dummycrats- Democrats had requested millions of pages of documents. More than 40,000 new pages were released shortly before Tuesday’s hearing began. dummycrats-Democrats complained that did not give them enough time to review them. “What is being done here is unprecedented,” says Sen. Patrick J. Leahy (D-Vt.), the former committee chairman...Every dummycrats-Democrat ‘would be held in contempt of court because this whole process is supposed to be a civil one…’ https://www.libertyheadlines.com/kavanaugh-hearing-democrats-shut-down/scumbag-Ellison chased from own event over abuse claims
by wnd.com
{ wnd.com } ~ U.S. Rep. scumbag-Keith Ellison, D-Minn. – the deputy chairman of the dummycrats-Democratic National Committee and a candidate to be the top law-enforcement officer in Minnesota... was confronted at a campaign event by investigative journalist Laura Loomer about domestic-violence allegations brought against him by two women. Loomer pressed scumbag-Ellison about a 2005 police report filed by Amy Alexander, a dummycrats-Democratic activist, reported the Gateway Pundit blog. Loomer apparently had the police report in hand on Saturday as she followed scumbag-Ellison, continually asking him to explain the claims in the document in light of his denials. The congressman did not respond to Loomer and instead heading to his car and was driven away. On Aug. 11, a woman named Karen Monahan accused scumbag-Ellison of being physically and verbally abusive towards her. scumbag-Ellison denied that claim as well, but Monahan responded, “You know you did that to me.” scumbag-Ellison, a supporter of the Hamas-affiliated Council on American-Islamic Relations, was spotted recently wearing a “No Borders” T-shirt. And he wrote to Amazon’s Jeff Bezos last month demanding the company stop selling books by any author condemned by the extremist Southern Poverty Law Center...
https://www.wnd.com/2018/09/ellison-chased-from-own-event-over-abuse-claims/
VIDEO: https://www.youtube.com/watch?v=CyNtJvjY5Bs
.VIDEO: https://www.youtube.com/watch?v=CyNtJvjY5Bs
Will the Split-Roll Property Tax Destroy California?
by Wayne Lusvardi
{ americanthinker.com } ~ Eight hundred fifty thousand signatures have been gathered in California in support of a voter initiative that would supposedly increase property taxes by 2020 for commercial and industrial properties to get around Proposition 13 property tax protections. The initiative would leave small business and residential properties alone. It is called the California Schools and Local Communities Funding Act. But raising property taxes on leased commercial properties would result in lower tax revenues.What Is Split-Roll Property Tax?
A split roll tax means applying a tax formula for commercial and industrial properties different from the formula applied for residential properties. The tax roll is an official breakdown or list of all the properties to be taxed.
California Proposition 13 protects property-owners from very high or very low re-assessed property values each year by increasing the base value of a property by not-to-exceed 2% per year for inflation. The market value of properties is taxed at a 1% base tax rate and is re-assessed upon re-sale, not each year. Activists want the reassessments pegged to market value appreciation not a fixed 2% each year.
Existing:
Base Market Value: $2,000,000
Base Tax @1%: $20,000/year
Annual Adjustment @2%: $20,400 – 1st year
Annual Adjustment @2%: $20,808 – 2nd year
Income Property Markets Work Inversely to Taxes
Most policy-makers think higher tax rates result in greater tax revenues. But income-producing property markets work inversely by lowering property values when taxes are increased. This market adjustment process is called by the term "tax capitalization," which means converting the net income of a commercial property into a higher or lower value depending on the change in net income.
Split Roll Added Tax Estimate Omitted "Tax Capitalization"
The California Legislative Analyst (LAO) has forecast that a split roll property tax would generate $10 billion annually in net additional taxes.
The state Legislative Analyst's Office (LAO) was contacted to inquire if its tax revenue estimate considered market capitalization of the higher property tax. Brian Uhler of the LAO stated in an email:
We did review the economic literature on tax capitalization and there is empirical evidence suggesting it occurs in California (for example, here [1] and here [2]) ... tax capitalization likely would reduce commercial market values under a split roll scenario. This would offset somewhat the revenue gains from assessing the properties at market value. But this offsetting effect probably would be minor relative to the size of the revenue gain from market value asset.
The empirical evidence of tax capitalization cited by the LAO deals with non-income-producing single-family residential properties and is thus irrelevant.
Former Alameda county assessment appraiser Charles B. Warren, American Society of Appraisers (ASA), Pleasant Hill, California, stated:
There are four problems with the split roll.1. More taxes > less value for income producing properties.2. Competently valuing properties is a proven challenge for today's assessors see SEC v City of Victorville. Doing actual the revaluation isn't going to happen overnight.3. When implemented, some businesses will simply close. Some will relocate. If some relocate that will create an oversupply of commercial space on the market and higher vacancy rates, which would create a compound decline in commercial property rents and values. Some may find a way to reorganize as non-profits to escape unequal tax burdens e.g., Hobby Lobby, credit unions.4. Even if properly administered, tax assessments will follow the market roller coaster ... down as well as up. Are the jurisdictions prepared for a shrinking property tax base? In 2008 to 2009, commercial property values declined by about 35% due to the larger economic recession. These wild value swings are what led to the passage of Prop. 13 in the first place in 1978.
Leased Commercial Properties Caught in a Vise
During the first few years of the new proposed law commercial and industrial property leases may not be able to increase rents to pay for the higher property taxes until leases are renewed typically five- to ten-year intervals. Commercial leases have rent stop cap clauses that do not allow rents to exceed monetary inflation. So leased income producing commercial properties would be caught in a vice between higher property taxes and rent caps with the only option being to decrease property values dramatically.
Will Split Roll Tax Increases Exceed 2% per Year?
The new proposed tax is a bet for inflation and property appreciation greater than 2% per year.
Nationwide, Moody's Real Capital Analytics Commercial Property Price Index (CPPI) grew by 5.6% annually from 2001 to 2016, but with three negative years: 2001 (-2.2%), 2008 (-8.5%), and 2009 (-25.6%). How much of the 5.6% per year average annual price appreciation will be reduced by the new added tax is anyone's guess.
Stabilized Market Adjustment:
Base Market Value: $2,000,000
Base Tax @1%: $20,000/year
Annual Adjustment @5.6%: $21,120 – 1st year
Annual Adjustment @5.6%: $22,302 – 2nd year
If annual adjustments are going to be market-based rather than a fixed 2% per year, it would be more workable to adjust assessed values on a ten-year average than on actual up-and-down market changes in value each year.
An example of how increased taxes lower values would be to assume that a property with a current $2-million market value is currently under-assessed at $500,000 due to Prop 13 restrictions. The current taxes at a 1% tax rate of base value would be $5,000 under Prop. 13, but taxes should be $20,000 (1% of $2 million). However, if taxes are increased by $15,000 assuming a 5% cap rate, the resulting value would be $1.7 million, or $300,000 (15%) undervalued. So the state would never achieve their minimum tax. It would probably fall short by 15%.
If we can assume that historical commercial property appreciation will average 5.6% per year over ten years, it could take ten years for a commercial property to recover its value. It would take about two to three years before any added taxes could be collected.
If California were seriously interested in raising commercial property taxes, the state would merely lower the existing 2%-per-year inflation adjustment to, say, 1.5%.
A Split Roll Property Tax Would Not Be Equalized
The proposed tax increase would exempt properties of businesses with 50 or fewer employees. According to the California Employment Development Department, as of 2017, there were 58,419 businesses in California with 50 or more employees, constituting only 29.3% of all businesses. So an unequal 30% of all businesses would bear the added tax burden.
And this would apparently leave the commercial properties of California's 268,096 non-profit organizations with total assets of $758 billion and reported total income of $454 billion per year, untouched by the added tax even if they rented space in the same commercial building with taxable businesses.
Split-Roll Property Tax Is Incompetently Designed
California has a history of what is called "perfect storms," where everything that can go wrong will go wrong. Witness the property tax crisis of 1975 that resulted in Proposition 13, the California Energy Crisis of 2001, the State Budget Crisis of 2008 to 2012, or the 2017 Oroville Dam failure. The next crisis may involve the split-roll property tax.
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