Opinion L.A.

Observations and provocations
from The Times' Opinion staff

Category: Taxpayer

How to get that afternoon coffee away from voters

John Deasy
The predictable plea in just about any tax campaign -- or for that matter, ad campaigns to get us to buy a small insurance plan, or some appliances -- is, "It's less money than your afternoon coffee." But like anything else, enough afternoon coffees add up to some real money.

On Tuesday, the Los Angeles Unified school board will hold a public hearing on a new parcel tax measure to raise $255 million a year, which is less than the state has been cutting from the district's budget. To get that amount, the voters would have to approve by a two-thirds majority a levy of $298 on each real estate parcel.

No sooner had the push been officially announced last week than Supt. John Deasy was breaking it down to what it would mean in smaller bites -- less than $25 a month. No one's gotten to the less-than-your-afternoon-coffee point yet, or the considerably-less-than-a-single-dinner-out-each-month point either, but it's surely only a matter of time.

All of this is absolutely true, but the question is whether this sort of breakdown is as effective as it used to be. The last few years have forced a lot of people to do away with a lot of niceties in life in order to pay down debts or overcome a period of unemployment. That one dinner out each month might be all they allow themselves, if they're still doing that. And seemingly every blogged bit of financial wisdom over the last year or two has started out with the folly of buying an afternoon coffee when you can make it at home for pennies.

People are trying to save for their retirements and for a rainy day; they've been told repeatedly about how they don't save enough, and there are signs that families are trying to improve on this score. The schools might be able to lay a claim on that extra almost-dollar a day, but for many, the rise in gasoline prices has already wiped it out.

None of this is to say that raising money for education isn't one of the finest things a society can do for itself and its children. It's just a question of whether the old sales pitches work, especially when they imply that people have adequate money and are simply being selfish or wrongheaded in the way they spend it. That might be more turnoff than incentive to vote yes.

The price of the tax isn't small. It's nearly $1,500 over the five years that it would be in effect. That's more than a few dinners -- for most voters, anyway.

Maybe a better message for our time is to acknowledge that this is a significant chunk of money but that the schools wouldn't be asking for it if they didn't need it in fairly desperate ways: to keep adult ed so illiterate adults can learn to read or new immigrants can learn the language of their adopted country, or to maintain preschool so children can enter kindergarten knowing some of those basics -- colors, letters, how to behave in a classroom -- that will be crucial to their academic success.

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--Karin Klein

Photo: LAUSD Superintendent John Deasy is seen during a regular meeting of the Los Angeles School Board on Feb. 7, 2012. Credit: Al Seib / Los Angeles Times

Ready to pony up $298 per year for L.A. schools?

John Deasy
The Los Angeles Unified School District appears poised to ask voters for a $298-a-year parcel tax. Parcel taxes are assessed on property owners and are the same regardless of the value of the land.

In a Friday press release, the district announced that the school board will consider at its meeting Tuesday whether to place the tax on the November ballot -- which pretty much means, expect to see it on the November ballot.

Two years ago, voters were unwilling to pass a much smaller parcel tax of just under $100 a year. These require a two-thirds majority -- not a common way for new taxes to go. And The Times' editorial board recommended a "no" vote, criticizing the board for not including a citizens oversight committee in the proposal, among other things.

The details aren't in yet on what this proposal would call for in the way of oversight. But certainly the schools are in much worse shape financially than they were a couple of years ago, and the economy is in somewhat better shape. Yet $300 a year isn't an insignificant sum for many families.

Would you vote for it?

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--Karin Klein

Photo: John Deasy, Los Angeles Unified School District superintendent. Credit: Mark Boster / Los Angeles Times

'Obamacare' plaintiff Brown's bankruptcy: Instant karma?

Supreme Court in Washington
What do you call it when someone who is suing to overturn the healthcare reform law files for bankruptcy, listing $4,500 in unpaid medical bills?

Karma? Fate? A lucky break for President Obama?

Really, you can't make this stuff up. Here's what The Times' David Savage wrote Thursday:

Mary Brown, a 56-year-old Florida woman who owned a small auto repair shop but had no health insurance, became the lead plaintiff challenging President Obama's healthcare law because she was passionate about the issue.

Brown "doesn't have insurance. She doesn't want to pay for it. And she doesn't want the government to tell her she has to have it," said Karen Harned, a lawyer for the National Federation of Independent Business. Brown is a plaintiff in the federation's case, which the Supreme Court plans to hear later this month.

But court records reveal that Brown and her husband filed for bankruptcy last fall with $4,500 in unpaid medical bills.

Now, you might expect Brown to be a bit, well, chagrined at this turn of events.  But remember, as Savage wrote, she "was passionate about the issue."

And she apparently still is:

Brown, reached by telephone Thursday, said the medical bills were her husband's. "I always paid my bills, as well as my medical bills," she said angrily. "I never said medical insurance is not a necessity. It should be anyone's right to what kind of health insurance they have.

"I believe that anyone has unforeseen things that happen to them that are beyond their control," Brown said. "Who says I don't have insurance right now?"

Who says? Well, Mary, your lawyer for one. Remember: She "doesn't have insurance. She doesn't want to pay for it. And she doesn't want the government to tell her she has to have it."

Oh yeah, that.  Those lawyers, always running their mouths.  

And for that matter, Mary, those aren't your husband's medical bills, at least not anymore.  Now that you've filed for bankruptcy, they are probably our medical bills, aren't they? 

Although it's not as though Brown is totally anti-government: The couple's Chapter 7 bankruptcy petition said her income was $275 a month in unemployment benefits.

So perhaps she intends to put that toward what she owes: "$2,140 to Bay Medical Center in Panama City, $610 to Bay Medical Physicians, $835 to an eye doctor in Alabama and $900 to a specialist in Mississippi."

Or maybe, as the story says, there's that other way out:

"This is a very common problem. We cover $30 million in charity and uncompensated care every  year," said Christa Hild, a spokeswoman for the hospital center. "If it's a bad debt, we have to absorb it."

Although when the hospital center says "we," it means "us"  -- as in you and I, the ones who do pay for health insurance.  We absorb it, in higher premium costs.

It's called the free market, or "there's no free lunch."  (It's also why a single-payer system such as Medicare would've been a better option than the law we've got, but that's another post.)

But it's also why the "individual mandate" requiring all Americans to purchase health insurance was put into the law.

Why that is so hard for Brown and millions of other citizens to understand is beyond me. 

This isn't Charles Dickens' London: We don't have debtors' prisons.  If Brown and her fellow travelers have their way and the healthcare law is ruled unconstitutional, many others will take the risk "of unforeseen things that happen to them that are beyond their control." 

And if they get sick, and have medical bills they can't pay, then they won't pay.  And neither will the Tooth Fairy, or the Easter Bunny or Santa Claus.

The rest of us will pay.

You see, Mary, the requirement that everyone buy health insurance isn't big bad government taking away your freedom.

It's just common sense.

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Photo: The U.S. Supreme Court plans to hear a challenge to the healthcare reform law. Credit: Win McNamee / Getty Images

Jimmy Carter, shortchanged again

Is Jimmy Carter the Rodney Dangerfield of presidents? Judging by the amount of taxpayer money he gets compared to George W. Bush, it sure seems that wayIs Jimmy Carter the Rodney Dangerfield of presidents?  It sure seems that way.

Buried in a Times story Monday about how much our retired presidents receive in taxpayer funds was this line:

"Former presidents receive varying amounts for expenses such as an office, staff and travel expenses. The amounts paid in fiscal 2011, including the pension, varied from $517,000 for Carter to $1.3 million for George W. Bush. Secret Service protection costs are not included."

Now maybe Carter doesn't care. Maybe you don't care. Undoubtedly Dubya doesn't care.

But really, now -- a retired Bush is more than twice as valuable as a retired Carter?

I'm thinking, What's a guy got to do to get a little respect?

Carter goes around building homes with Habitat for Humanity. 

Bush shows up in the front row at the World Series.

Carter goes to North Korea and gets a captured American freed.

Bush shows up at the World Series.

Carter irritates the heck out of pro-Israel types everywhere.

Bush shows up -- oh, you know.

Perhaps alone among Americans, I persist in my belief that Carter was a president unappreciated by today's pundits and historians.  Not a great president, perhaps. But not the Edsel of presidents either.

Anyway, it appears that all of our former presidents are headed for some belt-tightening. The Times reported that the proposed Presidential Allowance Modernization Act seeks to amend a half-century-old law that sought to "maintain the dignity” of the office of the president.

The proposal would provide a taxpayer supported pension of $200,000, about the same amount that they now receive. But payments to ex-presidents for outside expenses such as office staff and travel would be cut back if their outside income exceeded $400,000 a year.

Former presidents Jimmy Carter, George H.W. Bush, Bill Clinton and George W. Bush collectively received about $3.8 million from taxpayers in fiscal 2011, according to records. 

OK, yeah, that seems like more "dignity" than we can afford right now for these guys. 

Because let's face it: Most of them are well off. And that's a bipartisan position:  Clinton doesn't need the cash any more than the Bushies.

But I'm sticking by Carter. I'm betting an ex-peanut farmer could use the dough.

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-- Paul Whitefield

Photo: Jimmy Carter. Credit: David McNew / Getty Images

Ways to prevent LAPD from crashing their cruisers [Ted Rall cartoon]

LAPD-Cartoon

Los Angeles Police Department cruisers are involved in an average of one crash per day, reports Times staff writer Joel Rubin.

Most of the crashes were minor, but some resulted in life-threatening injuries or totaled police cars, or were the result of the officer violating traffic laws, according to LAPD records. In at least two incidents, the driver of another car was killed.

And at a time when the Los Angeles Police Department is trying to stem the steady stream of lawsuits filed against officers that cost taxpayers millions of dollars each year, traffic accidents remain a significant and costly obstacle. They represent nearly one out of every four lawsuits filed against the department. The city has paid nearly $24 million in settlements or verdicts in about 400 LAPD traffic-related lawsuits over the last nine years and must contend with dozens more cases that remain unresolved, city records show. In all but a few of the closed cases, city officials opted to pay a negotiated settlement instead of taking their chances at a trial -- a strong indication that the officers were in the wrong.

As the LAPD and the Los Angeles Police Commission consider the best way to investigate these crashes and prevent others, cartoonist Ted Rall has also been hard at work drawing up ideas. His proposals are above. I'm especially fond of his idea for installing "giant airbags all over town" -- but some might argue that L.A.'s already done that.

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--Alexandra Le Tellier

Cartoon: Ted Rall / For The Times

What does Romney's refusal to release his tax returns say about him?

Mitt Romney
The easiest thing to say about Mitt Romney's tax returns is that he should release them. Now, not in April. He can always supplement the document dump with his 2011 return when it's ready. Besides, by admitting  that he is taxed at the 15% rate imposed on capital gains, he already has confirmed suspicions that he belongs to the much-reviled 1%.  How much worse can the returns be? At this point he has the worst of both worlds: self-exposed as a fat cat and open to the charge of evasion. 

The second easiest thing to say about the controversy is that it is more proof of Romney's political tone-deafness.  After the offer of a $10,000 bet, the revelation that he once worried about pink slips,  his admission that he liked to fire people (I know -- he was talking about insurance companies) and his suggestion that he didn't make much in speaker's fees ($370,000), you'd think he or his media advisors would think twice about saying or doing anything that would exacerbate what the Republicans call class envy, especially before a vital primary election.  (They might also have contrived to leak to the media information about his generosity to the Mormon Church, though that might have been a mixed blessing with the evangelical vote.) 

The real question is whether Romney's ineptitude says anything about his qualifications for president or the policies he would pursue in the White House. Somewhat.  An  understanding of the current political environment  and care with language are important job requirements for a president. At least when Newt Gingrich offends people, he knows he's doing it.  But what about the "out of touch" argument -- that Romney's wealth irredeemably disconnects him from ordinary people (like George H.W. Bush's ignorance of supermarket scanners)  and, more provocatively, inclines him to positions like support for the lower capital-gains rate -- which benefits him? 

This is trickier terrain. FDR and, to a lesser extent, JFK demonstrated that you can be rich and sensitive to the problems of the down-and-out.  As for Romney's positions, armchair psychologists can attribute them to his privileged upbringing, but it's more likely that a) he actually believes in them or b) is pandering to Republicans more conservative than his secret self.  You don't have to be rich to buy the argument that a lower tax rate on capital gains encourages investment and thereby uplifts the economy. Rich people have the same right to be wrong (and Republican) as the rest of us.

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 -- Michael McGough

Photo: Mitt Romney holds a campaign rally at Winthorp University in Rock Hill, South Carolina, on Jan. 18. Credit: Emmanuel Dunand/AFP/Getty Images

Mitt Romney's taxes, and our mean streets

Danny Pierce
What is this, Kick a Person When They're Down Month?

First we had the case of a serial killer preying on homeless people in Orange County. Four men were killed before police apprehended and charged a suspect.

Then on Tuesday came the odd story of Pinkberry co-founder Young Lee, who in June allegedly used a tire iron to beat a transient who had asked him for money.

This follows the sad case this week of a Los Angeles woman who was arrested on suspicion of offering sexual favors  in exchange for Chicken McNuggets at a McDonald's drive-through.

Sure, terrible things happen every day, and not just in Los Angeles. But doesn't it seem that the mean streets are getting meaner?

Part of the reason, of course, is that the social safety net is -- well, I guess the polite term is that it's "fraying."

You know: We can't afford to do as much; we're taxed to death in California; businesses are fleeing.

But do you want to really educate yourself about California's fiscal situation? Then go read my colleague George Skelton's terrific column, "Voters need facts, not myths."

After you've read that, go to another story in The Times, "Homeless make up growing number of California welfare recipients."  Read how assistance to people struggling to work and feed and house their families has been cut from $560 a month three years ago to $490 now, with more cuts likely.

Finally, go read the story on Mitt Romney and his taxes.   

Asked Tuesday in South Carolina, the Republican presidential candidate acknowledged that his tax rate is about 15%. 

Which is about half what the average American earning $60,000 a year with no deductions is taxed at.  (Romney earns a bit more than $60,000; his wealth is estimated to be at least $250 million.)

The top tax rate is 35%. Romney has said he'd like to cut that to 25%. 

And after reading those stories, answer this question:

If Romney becomes president, how much meaner do you think our streets will become?

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Photo: Danny Pierce, 56, sits in the Santa Ana Civic Center area. Gina Ferazzi / Los Angeles Times

The San Francisco solution: To improve the economy, pay workers more

Palio D'Asti restaurant

Did you catch the latest bit of insanity out of San Francisco? Effective Jan. 1, Baghdad by the Bay's minimum wage will climb to $10.24 an hour.

So long, San Francisco. That little earthquake in 1906 was nothing compared with what this will do to your city. Might as well shut down those cute cable cars. Maybe you can find someone to buy that nice bridge. Too bad, too: Just when the 49ers are starting to win again, and the Giants are better than the Dodgers.

What's that you say? It's not the end? From The Times' story Tuesday:

San Francisco's minimum wage has climbed steadily since voters in 2003 approved a local initiative mandating an annual increase in the minimum wage using a formula tied to inflation. In recent years, the city has also required many employers to provide their workers with health benefits and all employers to offer paid sick time.

Critics have derided the mandates as anti-business job killers. But San Francisco's economy has proved resilient. The city's unemployment rate was 7.8% in November, well below the 11.3% statewide rate. Over the last year, the San Francisco metropolitan area, which includes parts of neighboring San Mateo and Marin counties, created 3,900 new jobs, mostly in bars and restaurants within the city of San Francisco, according to the California Employment Development Department.

We've been told lately that the only way to get the economy back on track is to cut, cut, cut -- workers and their pay and their benefits. Oh, and cut, cut, cut -- taxes for the wealthy, the so-called job creators.

But maybe there's something in the water in San Francisco: Better wages, better benefits -- and new jobs?

Of course, not everyone is happy:

"It makes these jobs so high-paying that they disappear," said Daniel Scherotter, executive chef and owner of Palio D'Asti, an Italian restaurant in the downtown financial district. "It's hurting the people it's trying to help."

As a result, Scherotter said he cut his kitchen staff by eight people in the last five years and shifted pastry production outside the city limits.

I understand what Scherotter is saying. He's got a business to run.

But he's wrong, and here's why. 

Call it America's dilemma: Consumers complain that everything costs too much, and they've seen their wages stagnate or their jobs disappear. With unemployment high and consumers not spending as much, businesses look to reduce costs -- usually labor costs.

But that formula just doesn't cut it.

For this country to work, people have to work. And that work has to pay enough for people to live on. Even at $10.24 an hour, that's $21,299.20 a year annually for a full-time worker. (Provided they don't take any time off, of course.)

If, as Scherotter says, the economics of running a restaurant require that workers be paid less than $10.24 an hour, then perhaps it's the business model that's broken.

Well-paid workers become free-spending consumers. Free-spending consumers fuel the economy. A better economy breeds more jobs.

Who knows, maybe San Francisco is on to something. And it might just work better than cutting the taxes of all those job creators.

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Photo: San Francisco's Palio D'Asti restaurant. Credit: Eric Risberg / Associated Press

Gross receipts tax or sales tax? Beemer or Porsche?

Beverly Hills BMW Mark Bolster Los Angeles Times June 8, 2010

How much in sales tax does Los Angeles get on each car sold by a dealer located within city limits? Does the city get all 8.75% in sales tax? But wait, there are special rules for car sales; doesn't all the tax money go to the city in which the buyer lives and registers the car, not the city where the dealer is located?

The questions come up because of the proposal by Mayor Antonio Villaraigosa and City Councilmen Eric Garcetti and Mitchell Englander to eliminate one kind of tax on car dealers -- the gross receipts tax, also known as the business license fee -- in order to get dealerships to leave nearby cities like Beverly Hills and come to Los Angeles. The three went to Beverly Hills on Tuesday to celebrate next year's move of a Porsche dealership to Westwood. A BMW dealership recently moved from Beverly Hills to the Miracle Mile.

Yes, Los Angeles has a pretty high sales tax rate -- 8.75%, representing the statewide rate of 7.25% plus an additional 1.5% imposed locally by the county and the city for things like the Measure R transportation fund. Some of that goes to the city. Some goes to transportation and some to the county.

The three pols on Tuesday suggested that Los Angeles could recoup approximately 1% on the gross sales of new-car dealerships so that, for example, $100 million in sales at Beverly Hills Porsche would amount to $1 million in sales tax receipts for Los Angeles' general fund.

But not quite. Their estimate is too high, by 25%. Cities get only 0.75% from the sales tax (the other 0.25% goes to the county for transportation), so Los Angeles' gain from having Beverly Hills Porsche move across the municipal boundary, assuming the same $100 million in sales, is only $750,000: Still nothing to sneeze at, especially if multiplied by an additional dozen or so dealerships. The idea is to entice them, and their sales tax revenue, into town by waiving their 0.127% gross receipts tax. And, of course, 0.127% of $100 million is less than 0.75%. But the point here is not merely the rate; it's that the dealerships don't pay anything to Los Angeles if they're not located within city limits.

Some critical comments on the mayor's Facebook page (and kudos to him and his people for keeping them up there) say big car dealers don't need tax breaks. And, OK, let's say that's true. But if you want your city to get a cut of the sales taxes instead of some other city, you may have to offer them something, like a tax break.

Ever since Proposition 13 capped property taxes, cities have fought each other to attract big-box stores and car dealerships, because they need to replace their lost property tax revenue with big sales tax figures. But lawmakers in Sacramento wanted to reduce cities' incentive to swipe car dealers from each other, so the law is different for cars than other retail sales. If you buy a laptop or a power mower from a big-box store in Los Angeles, the city will get that 0.75% in sales tax plusthe city's chunk of the additional 1.5% extra in local sales tax (if you're keeping score, that's a total of 8.75%: 3.6875% in base state sales tax, plus two separate 0.25% items and two separate 0.5% state items under various ballot measures, emergency funds, etc., plus 1.0625% to the state to backfill various swipes it made from local funds under the 1990s version of realignment -- there's 6.25% in state sales tax plus that 0.75% for cities and 0.25% for county transportation -- now we're at 7.25% in state sales tax -- plus an additional 1.5% that we passed locally under various city and county ballot measures).

For car sales, though, the city's portion of the local 1.5% goes not to the municipality where the dealer is located but instead to the city where the purchaser lives. So what matters for that portion of the sales tax -- that 1.5% -- is whether the buyer lives in Beverly Hills or Los Angeles, not whether the dealership is located in one city or another.

But still -- there's that 0.75%. That does in fact depend on where the dealership is located (there is a lot of confusion and misunderstanding on that point). So bringing car dealers back to Los Angeles could be good for the city's sales tax receipts, just as it would be bad for the neighboring cities' receipts.

Now, will waiving the gross receipts tax get more dealerships to leave Beverly Hills -- or Glendale or wherever else -- for Los Angeles? That's another question.

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Photo: Beverly Hills BMW on voting day in June 2010. Credit: Mark Boster / Los Angeles Times

Michele Bachmann and me -- like twins!

 Michele Bachmann

Michele Bachmann, my political soul sister!

I've been saying for weeks that Democrats are missing a huge opportunity if they don't make these six words the centerpiece of their economic campaign:

"Bring back the Reagan tax rates."

And now I see that GOP presidential candidate Bachmann agrees with me.

"For my tax plan, I take a page out of one of my great economists that I admire, Ronald Reagan," Bachmann told Fox News. "And under my tax plan, I want to adopt the Reagan tax plan. It brought the economic miracle of the 1980s. Why not go with what works? I want to reinstitute the Reagan tax model from the 1980s."

So do a lot of Democrats, Rep. Bachmann, including the Democrat in chief, President Obama. Tax rates in the Reagan presidency were almost without exception higher than they are now.

And Reagan used the "f-word" –- fair, the same word Obama has invoked –- in June 1985 to explain why the rich should pay more:

"We’re going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share. In theory, some of those loopholes were understandable, but in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10% of his salary, and that's crazy. [...] Do you think the millionaire ought to pay more in taxes than the bus driver or less?"

Here's the video: Ronald Reagan, starring on a progressive website. Who'd a thunk?

That Ronald Reagan –- such a class warrior. No wonder Republicans can't stand him.

Bachmann should know her stuff on taxes because, as she puts it blandly, she was a federal tax attorney.

That's how she nuances the years, from 1988 to 1993, that she spent working for the Internal Revenue Service, an agency not exactly dear to the hearts of potential Bachmann voters.

This isn't the only time Bachmann has been tapping into my brain, if you want to be conspiracy-minded about it.

When Herman Cain unveiled his "9-9-9" tax plan, she and I both thought of the same quotation -- from the King James Bible:

"Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is six hundred threescore and six."

It's from the Book of Revelations, and from that verse, believers have concluded that 6-6-6 are evil digits incarnate, the "Mark of the Beast."

"You turn the '9-9-9' plan upside down," said Bachmann with a twinkle, "and the devil's in the details."

But Cain's tax plan also prompted me to think of a second quotation, one that probably didn't pop into Bachmann's head.

It's from the sardonic journalist H.L. Mencken, the late "Sage of Baltimore," and it's one that's worth remembering as we embark aboard SS Election Year 2012:

"For every complex problem, there is an answer that is clear, simple -– and wrong."

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-- Patt Morrison

Photo: Rep. Michele Bachmann (R-Minn.) speaks at the Commonwealth Club in San Francisco. Credit: Jeff Chiu / Associated Press

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