In Lake Tahoe, property owners were heard today by the Nevada Supreme Court over their property taxes. Some 300 of the landowners won in the lower court after they convinced a judge that their property had been overassessed for tax purposes.
Rather than order a reassessment, though, the judge ordered the taxes rolled back two years to the 2002-03 level. The local government, for equity reasons, extended the rollback to all taxpayers, but argued that correct remedy is re-appraising the property, not simply rolling back the taxes.
Deputy Attorney General Karen Dickerson said the court has the power to roll back assessments "only to the extent of excess valuation." She said what Griffin's order did was to give "a windfall to a group of property owners at Incline Village" by rolling the taxes back two full reassessment cycles.
Deputy Attorney General Dennis Belcourt argued a two-year rollback is unconstitutional under Nevada's constitution because revaluation must be done annually.
"Neither the tax commission or the court can exempt taxpayers from annual revaluation." And he said a two-year rollback creates an "unconstitutional under-valuation" for those Incline residents.
More on property taxes here.
Yesterday, former New York City mayor and GOP presidential candidate Rudy Giuliani unveiled his plan for tax reform and relief. It's built largely on the ideals that Giuliani has espoused throughout the campaign but never fleshed out in any detail.
The highlights of the plan:
- cut the corporate tax rate to 25% from 35%
- make the Bush tax cuts permanent
- lower the capital gains and dividends rate to 10% from 15%
- add an opt-in, simpler tax system — the "Fair and Simple Tax (FAST)." It would save many deductions (mortgage interest, charitable donation, state and local taxes paid and child tax credit). It would have 3 rates: 10% on first $40,000; 15% on $40,000-$150,000; 30% on income over $150,000.
- index the AMT to inflation (short-run) and then eliminate it (long-run)
- eliminate the estate (death) tax
- index capital gains for inflation
- re-instate the research and development tax credit
- implement Giuliani's proposed healthcare deduction
We're still digging through the details (finally, candidates offering details!), but one thing that immediately jumped out at us was the dramatic cut in the corporate tax rate. As we've pointed out time and time again, this is a critical move for American competitiveness moving forward. The U.S. currently has the world's second-highest corporate tax rate, meaning investments and jobs that should be coming to America are not.
Giuliani joins a growing list of politicians that support corporate tax reform. Fellow GOP candidate Fred Thompson's tax plan includes a big corporate rate cut, and Mitt Romney has also called for lower corporate tax rates. Congressman Charlie Rangel (D-NY) proposed a corporate rate cut in his "mother of all tax reforms" legislation. And Treasury Secretary Hank Paulson has been a tireless advocate for dropping the corporate rate.
Check back soon for more detailed analysis of the Giuliani plan, but our kudos to him for understanding the importance of lowering the corporate tax rate.
A bizarre story out of New York City where two men attempted to use a man's corpse to cash his Social Security check, courtesy of the Associated Press:
Detective Travis Rapp has seen his share of corpses, but this was new: two men wheeling a rigid, pale body down a Manhattan street in a red office chair, drawing a crowd of suspicious onlookers.
Looking out the window of the restaurant where he was having lunch, Rapp initially assumed "it was a mannequin or a dummy," he said. "I thought it was a joke, honestly."
A closer inspection showed that it wasn't. The man was dead, and two of his friends had hauled his corpse to a store to cash his $355 Social Security check, police said. They were arrested before they could get the money.
The bedraggled suspects, David J. Dalaia and James O'Hare, were scheduled to appear in court Wednesday night. Police said the men, both 65, were petty criminals with long histories of heroin addiction and arrests dating to the 1960s.
The trouble began Tuesday when Dalaia and O'Hare tried to cash Virgilio Cintron's check at a store in Hell's Kitchen on their own, police said. The man at the counter told them that Cintron had to be present to cash the check, so they went back to his apartment, which one of the suspects shared with the dead man.
Cintron was apparently undressed when he died, sometime within the previous 24 hours. Police said Dalaia and O'Hare proceeded to dress him in a faded T-shirt, pants they could only get up part way, and a pair of Velcro sneakers. They threw a coat over his waist to conceal what the pants couldn't cover, police said.
They then put him on the office chair and wheeled the corpse over to the check-cashing store.
The men left Cintron's body outside, went inside and tried to cash his check, authorities said. The store's clerk, who knew Cintron, asked the men where he was, and O'Hare told the clerk they would go and get him.
At about the same time, Rapp spotted the men and confronted them as they were trying to haul the body into the store. He said that even after he identified himself as a police officer, O'Hare told him, "I have to get my friend in here. I have to cash his check."
While this story may make people laugh or cringe, it brings up a point that is often overlooked in Social Security policy debates: people (like Crintron, who was 66 at the time of death) who are statistically more likely to die early are discriminated against by the insurance program called Social Security. If it's truly an insurance program as many of its defenders claim (as opposed to merely a redistribution system) whereby it pays out money to you in the event you live to be 65, then shouldn't the premiums be adjusted based upon the probability that one will make a claim?
Why should someone who works a more dangerous job or is born with a condition that makes his life expectancy shorter be forced to pay the same rate as a woman who works in an office and is expected to live to 85? Under a true insurance program, the latter should be forced to pay a higher premium due to a higher probability of making a claim.
The current Social Security system (again, if it's truly an insurance program) is like someone with three DUIs and 10 speeding tickets being charged the same car insurance rate as a Ned Flanders-type who has never gone 1 MPH over the speed limit.
Illinois Governor Rod Blagojevich, architect of one of the worst state tax reform proposals in recent history early last year, is at again. This time he is basically holding hostage the Chicago mass transit system's general funding source so that he can try to buy some more senior citizens' votes. A truly sad story showing one downside of democratic rule courtesy of the Chicago Tribune:
State lawmakers today passed a bill to fund Chicago-area mass transit with a sales tax increase, but Gov. Rod Blagojevich said he wouldn't go along until lawmakers agreed to provide free bus and train rides for the state's senior citizens.
The governor's unusual move capped a frenetic 24-hour round of legislative negotiating that raised hopes of an agreement to end the monthslong funding fight and avert service cuts and fare hikes scheduled for Jan. 20. But the governor's decision will send the legislation back for further consideration in the House and Senate.
"We can't say that all's well that ends well, because this is not over yet," said Rep. Julie Hamos (D-Evanston).Blagojevich had repeatedly vowed to veto the tax-hike plan over the last year but began to soften his opposition in recent weeks as it appeared lawmakers would send it to him. He said he saw the free rides as a way to ease the sting for people on fixed incomes.
The governor's justification makes little sense. Why should only senior citizens be spared the hardship of the sales tax increase? There are many poor residents of the Chicago area who use public transit to get to work who will be hit much harder than many of the senior citizens living in the area.
Furthermore, even if senior citizens were somehow more worthy of getting a break from the tax increase than others, what about the senior citizens who do not use public transit? They are going to be hit with a tax increase but will not be "eased" by the governor's proposal. Actually, the sales tax increase is designed to increase the funding for the transit system. Therefore, if anything, those who use the transit system should be the ones that have to pay higher taxes. The governor is proposing the exact opposite.
Then again, maybe I should defer to the transit expert as Governor Rod would be one to understand how expensive the daily commute to work can be.
Last year a handful of states considered selling or leasing their lotteries, but so far no state has taken the plunge. As we have said before, an outright lottery sale, not a lease, would be good news as it would get the state out of the lottery business entirely.
Vermont is the most recent state to catch the lottery "privatization" bug, and is even hoping to beat the other states to the punch. A recent Vermont Public Radio report, reprinted on Lottery Post, delves into some of the perceived benefits and drawbacks of the plan. An excerpt of the report follows:
John Dillon (host): Earlier this month, the administration got a detailed briefing from the Lehman Brothers financial services firm on potential benefits of leasing the state lottery.
The 57-page Lehman report is stamped confidential but officials determined it was public under the state's open record's law.
. . .
(Dillon) Jim Reardon is Vermont's finance and management commissioner. He briefed the state lottery commission this week on the privatization proposal.
Reardon said the state could invest the money and get a guaranteed annual payment of around $23 million dollars for the duration of the 40 year lease.
And, the administration hopes that whoever leases the lottery would also pay up to $56 million dollars in a one-time payment next year. Its money that Governor Douglas hopes will pay for school construction and to reduce statewide property taxes. Reardon says there could be even more money available.
(Reardon) "You'd then also would hope to receive a revenue stream over the course of the lease that would also involve potentially profit sharing."
. . .
(Dillon) About a half dozen states - including Texas, Indiana and California - are also looking to lease or sell their lotteries. They've gotten similar proposals from Lehman Brothers and other investment banks.
But if Vermont leased its lottery next year, we would lead the pack. The Lehman report says the state could get a premium price it if it went first.
Finance Commissioner Reardon says he'd like the deal to go forward quickly, so the money would be available for next year's budget.
.. .
(Douglas) "In recent years, the [lottery] proceeds have been relatively stable, so it doesn't seem like there's been much growth in sales activity lately."
(Dillon) Lehman Brothers says a private company would increase sales through new marketing techniques and by using the Internet. The report says lottery tickets could be sold over mobile phones, interactive TV, or even through handheld devices like Blackberries or Palm Pilots.
The report does note that there could be questions about the legality of expanding sales to the digital age, because of the chance that people under 18 could participate.
(Dillon) Governor Douglas says he wants the Legislature to look seriously at the lease idea. He says if lawmakers don't adopt the plan, they'll have to find some other way to pay for school construction and property tax relief.
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