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April 13, 2009

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Wayne Lusvardi

William G. Hamm, PhD, has authored a study for the California Commission on the 21st Century Economy that misses the impacts on small commercial property owners and fails to consider the spillover effects on residential property loan defaults. For his flawed study see here:

http://www.cotce.ca.gov/meetings/testimony/documents/WILLIAMHAMM-COTCE-21stCenturyEconomypresentation-4909.pdf

lvtfan

What you didn't speak to was fairness.

Why should new companies be penalized for being new?

You seek to minimize the competition for long-established entrants to the business community. Not only must they pay a seller exhorbitant amounts to buy a site, and a mortgage lender, with interest. THEN they have to pay multiples of the property tax paid by their long-established competitors.

Please tell us what is fair about that.

I hope this sees the light of day.

Small commercial property landlords? Or small business? Or consumers? Or potential entrepreneurs? Whose interests do you have at heart?

lvtfan

Please explain, while you're at it, why entities like the Los Angeles Country Club should be subsidized by poor homeowners who struggled to buy a home in the last 2, 5, 10 or even 20 years?

Grandfathering longterm owners -- be they real estate operators, country clubs, so-called "small businesses" which mostly exist to collect the economic rent while the owners wait for the land to appreciate or their grandchildren to reach college age -- is just plain wrong and indefensible.

Wayne Lusvardi

To lvtfan:
Your argument that new business entrants are penalized is only logical by half. To extend your logic out, it would be better that all businesses and landowners suffer from high taxation. Prop 13 is no different than paying capital gains on stocks. You don't pay the gain until you realize it. What you argue for is for small businesses to have taxes raised before they are in a position to sell their properties or businesses; before they realize a gain. That is a taking when coerced by government action.

Wayne Lusvardi

To ltvfan:
There is no evidence that Prop 13 has shifted the tax burden to residential properties. In fact it has been shown that residential properties are taxed at about 53% of market value and commercial properties at 60% of market value. So commercial properties typically pay more pro rata taxes than residential properties. But I don't think that data or logic will persuade you. Nonetheless, thanks for your comments.

Wayne Lusvardi

To my readers:

The comments posted by "lvtfan" are from the website lvtfan's blog here: http://lvtfan.typepad.com/

LVT is an acronym for Land Value Tax originally propounded by land economist Henry George.

I thank lvtfan for his challenging questions.

Van Leasing

I visited this blog first time and found it very interesting and informative.. Keep up the good work thanks..

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