System Failure: California’s Loophole- Ridden Commercial Property Tax

The link to "System Failure.." should be required reading for all elected officials in California, especially at the State level.  It's an excellent examination of the effects of Prop 13, more specifically it's failure due to loopholes.

From the summary:  
"As California faces a severe fiscal crisis at the state and local level, all aspects of our tax system, including the property tax, must be examined. This report provides an examination of the property tax system as it applies to commercial property, and provides significant new data which comes to two clear and related conclusions:

1. In virtually every county, commercial property is paying a far smaller share of the
property tax since Proposition 13 passed in 1978.

2. Commercial property is able to exploit huge loopholes in the law to avoid
reassessment upon a change in ownership as required by current state law.

The first part of the report, “Who Pays the Property Tax?” provides county-by-county data on the shifting property tax burden between residential and non-residential property since the passage of Prop. 13.....

The data is consistent throughout the state: in virtually every county in the state, the share of the property tax borne by residential property has increased since the passage of Proposition 13 in 1978, while the share of the property tax borne by non-residential property has decreased. Some examples: in Contra Costa County, the residential share of the property tax went from 48% to 73%. In Santa Clara County, the residential share went from 50% to 64%, despite massive industrial/commercial growth. In Los Angeles County, it went

from 53% to 69%. In Orange County, it went from 59% to 72%."

It's very interesting that, for some unexplained reason, there has been virtually no change in San Diego County.  Nevertheless, statewide there has been a significant shift in the burden of property taxes from corporations to individuals.  The basic premise of Prop 13 should definitely be preserved, at the same time the loopholes for commercial property desperately need to be closed.  See the link for the full report:
System Failure.....

Fed Earns Record $82 Billion Due to Stimulus Spending

Here's a headline that didn't make the front page of the Union-Tribune, or even the front section, amazingly.  After averaging a transfer amount of $25 billion during the previous decade, the Fed transferred $47.4 billion in 2009 and now $79 billion for 2010, a new record an a 66% increase over the previous year.  This is money that goes directly to the US Treasury.  This should have gotten much more media coverage. 

Remember this next time someone criticizes President Obama's economy recovery plan.
Article in Huffington Post

Berkshire Hathaway Beats Forecast, Has $20B in the Bank

Warren Buffett continues to light the way for investors, improving financial results in a tough year.  In his annual letter to stockholders, he has an optimistic tone for the coming year. 

OMAHA, Neb. (AP) -- Warren Buffett's Berkshire Hathaway reported a 43 percent jump in fourth-quarter earnings Saturday largely because of strong performance at its railroad business and a paper gain of $1.4 billion on the company's derivative contracts and investments.
Buffett said in his annual letter to shareholders that the purchase of the Burlington Northern Santa Fe railroad was Berkshire's highlight of 2010.
Berkshire reported net income of $4.38 billion, or $2,656 per share of its primary, Class A stock. That's up from the $3.1 billion net income, or $1,969 per Class A share, a year ago. It's also higher than the $1,695 per Class A share expected by analysts surveyed by FactSet.
Revenue grew nearly 20 percent to $36.2 billion from $30.2 billion a year earlier.

Buffett said Berkshire's $26.7 billion acquisition of BNSF last February is working out better than he expected. The railroad added $2.2 billion to Berkshire's net income in 2010.
In his annual letter to investors, Buffett wrote:  "Earlier I explained just how important railroads are to our country’s future. Rail moves 42% of America’s inter-city freight, measured by ton-miles, and BNSF moves more than any other railroad – about 28% of the industry total. A little math will tell you that more than 11% of all inter-city ton-miles of freight in the U.S. is transported by BNSF."


Revenue for the full year was $136.2 billion, up 21 percent from $112.5 billion a year earlier.
Buffett said he's looking for more big acquisitions to boost Berkshire's earnings power.  Berkshire Hathaway continues to bank $20 billion dollars in cash.

Paul Krugman's "THE GOP'S OWN PRIVATE EUROPE

The Republican's make it so easy, sometimes, to smash their logic.  Case in point, Rep. Paul Ryan's official Republican response to President Obama's State of the Union address.  Ryan:  "Just take a look at what's happening to Greece, Ireland, the United Kingdom and other nations in Europe.  They didn't act soon enough, and now their governments have been forced to impose painful austerity measures:  large benefits cuts to seniors and huge tax increases on everybody." 

The trouble is, in the case of Ireland and the UK, what happened actually refutes the current Republican narrative.

Krugman:  "Again, American conservatives have long used the myth of a failing Europe to argue against progressive policies in America.  More recently, they have tried to appropriate Europe's debt problems on behalf of their own agenda, never mind the fact that the events in Europe actually point the other way.  But Ryan is widely portrayed as the intellectual leader within the GOP, with special experties on matters of debt and deficits.  So the revelation that he literally doesn't know the first thing about the debt crises currently in progess is, as I said, interesting - and not in a good way." 

Read the full editorial here.

The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it

Very scary statistics, assuming they are accurate.  Everyone should be very concerned about these facts.  How many people know these facts, and understand how telling they are?

From The Business Insider


Editor's note: Michael Snyder is editor of theeconomiccollapseblog.com

The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.

The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

Here are the statistics to prove it:

• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.

• 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.

• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.

• 36 percent of Americans say that they don't contribute anything to retirement savings.

• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.

• 24 percent of American workers say that they have postponed their planned retirement age in the past year.

• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.

• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.

• In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.

• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.

• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.

• The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.

• In America today, the average time needed to find a job has risen to a record 35.2 weeks.

• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.

• or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.

• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.

• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.

• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.

• The top 10 percent of Americans now earn around 50 percent of our national income.