State targeting those who didn’t file 2011 returns

You might be getting a call soon from the state Franchise Tax Board if you didn’t file a state income tax return for 2011.

The board is contacting more than one million Californians who didn’t meet the Oct. 15, 2012 deadline. It’s comparing records of filed tax returns with more than 400 million income records it receives each year from third parties to find those who earned California income but didn’t file a return. The FTB gets income information from the IRS, banks, employers, state departments, and other sources, and also uses occupational licenses and mortgage interest payment information to detect others who may also have a requirement to file a state tax return.

Around here, the FTB is looking up 27,751 people in Alameda County; 19,466 in Contra Costa County; 10,855 in San Mateo County; 25,435 in Santa Clara County, and 3,876 in Santa Cruz County. Last year, FTB collected more than $714 million statewide through these efforts.

Those contacted have 30 days to file a state tax return or show why one is not due. When a required return is not filed, FTB issues a tax assessment using income records to estimate the amount of state tax due; that assessment includes interest, fees, and penalties that can total up to 50 percent.


Skinner: Dems must choose battles, but fight some

With supermajorities in both legislative chambers, Democrats must walk a finer line than ever, Assemblywoman Nancy Skinner said Wednesday.

My coffee meeting with Skinner, D-Berkeley, yielded a wide-ranging conversation about her party’s considerable new power and the responsibilities that go with it, as well as her own legislative priorities. The former Berkeley councilwoman has just won re-election to her third and final Assembly term, and she sees a productive but sensitive session ahead.

“We’ve been given this privilege by the voters and we want to be respectful of the privilege we’ve been handed,” she said Wednesday.

The caucus must choose its battles, she said, but not choose them so carefully that none ever get fought.

She’s in a position to help choose those battles because, as the Assembly Rules Committee’s chair, Skinner is among the Legislature’s top leaders. Rules is responsible for assigning bills to committees, setting salaries for legislative staff, waiving rules and overseeing the Assembly’s business; it’s basically an executive committee for the chamber, and its seats are coveted.

But Skinner on Wednesday said the supermajorities were achieved by votes in individual districts, not a statewide vote, and so lawmakers must move cautiously to ensure they don’t salt the field.

For example, she said, voters’ approval of Proposition 30 – Gov. Jerry Brown’s measure temporarily increasing sales taxes and income taxes for the state’s richest residents to fund K-12 and higher education – was “great,” but it would take a lot more revenue to return the state’s schools, colleges and universities to their heyday.

“There’s probably appetite for some more revenue,” she said, but it has to be something that’s palatable to voters.

For example, state Sen. Ted Lieu’s proposal to triple the Vehicle License Fee – which was slashed by former Gov. Arnold Schwarzenegger, blowing a huge hole in the state budget – was withdrawn almost as soon as it was advanced last month due to public backlash. And voters in November 2010 handily rejected Proposition 21, which would’ve boosted the VLF to bankroll state parks. Voters just don’t like the VLF, Skinner said.

“We have to look at the range of … tax expenditures, what I call tax loopholes or tax giveaways, that were part of various budget deals in order to get a Republican vote” in past years, she said.

One such loophole was the single-sales factor, just repealed last month by Proposition 39; that’ll bring in about $1 billion a year, half of which for the first five years is earmarked for projects increasing energy efficiency and creating green jobs. Skinner this month introduced the Assembly version of a bill to implement that.

“But there’s others like that,” she said, citing the “net operating loss carryback” deduction that was suspended for 2010 and 2011 but will apply to 2012’s corporate taxes.

This and other loopholes, if closed, “could be worth from $2.5 billion to $4 billion, which is significant,” she said.

And of course there’s the possibility of “split-roll” reform of Proposition 13 so that residential properties remain protected but commercial properties are re-assessed more often, she said. Assemblyman Tom Ammiano, D-San Francisco, already has announced a bill to tighten state laws enacted under Prop. 13 so that it’s harder for businesses to avoid re-assessment and higher taxes when property changes hands – a half-step toward split-roll that wouldn’t require voters’ approval of a ballot measure.

Lots more, after the jump…
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Millionaires to Congress: Take our taxes, please

With the fiscal cliff approaching, four dozen California millionaires have renewed their call for Congress to let tax cuts expire for America’s richest citizens.

The millionaires are part of the national group Patriotic Millionaires for Fiscal Strength, a movement of more than 200 Americans with incomes over $1 million a year calling for higher taxes on incomes of that level. They’re joining with The Action, a broad coalition of labor and progressive groups pursuing the same goal.

“The rich have done extremely well in America for the past 30 years and it is past time for them to begin paying more taxes to support better public services,” retired attorney Guy Saperstein of Piedmont, one of the millionaires, said in today’s news release.

Another of the millionaires, former Wall Street Executive and author Ken Morris of Ross, said “fiscal intelligence suffered while millionaires benefited from GOP intransigence on fair taxation for far too long.”

“For the sake of renewing middle class economic health, it is high time to undo those policies by allowing the Bush tax cuts on the wealthiest 2 percent of Americans to expire,” he said.

Follow after the jump for a full list of the California millionaires…
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A new push for ‘split-roll’ property taxes

Hot on the heels of a poll showing support for altering Proposition 13 so commercial properties can be taxed at their current value, a Bay Area lawmaker says he’ll pursue exactly that.

The “split roll” property tax, in which all of Proposition 13’s protections for residential properties would remain but commercial properties would be regularly re-assessed, has been a goal of many Democrats for quite some time. But now, with a super-majority in both the Assembly and the state Senate as well as a Democratic governor, they may be in a position to actually do something about it.

A Public Policy Institute of California poll found majorities – 57 percent of adults, 58 percent of likely voters – favor such a plan; it’s supported by 66 percent of Democrats and 58 percent of independents, while Republicans are split (47 percent in favor, 48 percent opposed). The poll of 2,001 Californians was conducted Nov. 13-20; it has a 3.5-percentage-point margin of error for all adults and a 4-point margin of error for likely voters.

Tom AmmianoAssemblyman Tom Ammiano, D-San Francisco, announced this morning he’ll introduce commercial re-assessment legislation this session – not his first bite at this apple, but perhaps he’s feeling better about his chances.

“Prop. 13 is not the untouchable third-rail anymore. It’s more like the bad guy with the mustache who has tied California to the rails with the fiscal train wreck coming,” he said in his news release. “This year’s election, both at the federal and state level, shows that people recognize we have to improve revenue to maintain needed services. Reform of Prop. 13 is one possibility.”

Actually changing Proposition 13 would require another ballot measure, but Ammiano aims to reduce corporations’ ability to structure ownership to avoid having property reassessed when it changes hands. The change would not be a tax increase, he noted, but would increase needed revenues for education and other uses by taxing properties at their actual value, rather than leaving those values at artificially depressed levels.

“Corporations want to be treated as people when it suits them, as in the Citizens United case, but when it comes to paying their fair share of taxes, they are looking for a deal that real people – like you and your neighbor – can’t get,” he said.


Activists urge tax hike amid ‘fiscal cliff’ talks

Congress and the White House might be at loggerheads over how to address the “fiscal cliff,” but activists in California and across the nation aren’t letting any grass grow under their feet.

The Action – a broad coalition of labor and progressive groups demanding that the Bush tax cuts be allowed to expire for those making more than $250,000 per year – organized phone banks this past Saturday at 38 sites across California, including Burlingame, Daly City, El Sobrante, Los Altos, Martinez, Morgan Hill, Oakland, Palo Alto, San Francisco, San Leandro, San Lorenzo, Santa Clara, Santa Cruz, Santa Rose, Sebastopol and Walnut Creek.

The phone bank targeted California voters, who were urged in turn to call their representatives in Congress.

“For months, Republicans in Congress have held the middle-class hostage to tax cuts for the wealthiest 2 percent of Americans,” said a Friday e-mail announcing the phone banks. “The Senate has already passed legislation to keep middle-class taxes from rising, and it’s time for the House of Representatives to act. It’s time to set our priorities straight: Tax cuts for the wealthy means fewer Pell Grants, fewer Head Starts and more kids shoved into crowded classrooms.”

Former U.S. Labor Secretary Robert Reich, now UC-Berkeley professor, is helping to define the debate for Democrats (via MoveOn.org):

On Tuesday evening, members of the Sacramento Alliance of Californians for Community Empowerment will be out singing some special, re-purposed Christmas carols “to urge Congress to vote for middle class tax cuts without holding them hostage for tax cuts for the wealthy.” They’ll be at 16th and J streets at 6 p.m., performing for shoppers, commuters and people waiting in line to see former President Bill Clinton speak at the Sacramento Speakers Series – a friendly crowd, one would think.

National activism is afoot too: Several organizations are planning a Congressional Call-In Day this Wednesday, with a toll-free number, 800-998-0180, that will connect callers directly to their Congressional leaders. As the National Committee to Preserve Social Security and Medicare puts it, the goal “is to flood members of Congress with calls reminding them that Americans of all ages and political parties oppose cutting middle-class benefits to pay for deficit reduction. Our message to Congress is simple: ‘NO CUTS to Social Security, Medicare and Medicaid. They should not be a part of this deficit debate.’ ”

And there’ll be a demonstration at noon Friday outside House Minority Leader Nancy Pelosi’s San Francisco office – at 7th and Mission streets – urging her to vote against any “grand bargain” solution. California Alliance for Retired Americans, Jobs with Justice, Gray Panthers of San Francisco and other groups are expected to take part.

“We’re not broke,” said Hene Kelly the California Alliance for Retired Americans’ legislative director. “We’ve been robbed. If Congress wants to get our economy back on track we need to focus on additional investments in jobs and services that rebuild our economy. That means Congress must raise more revenue by making the wealthy and big corporations pay their fair share of taxes. Anything less would be a grand swindle of working people, not a grand bargain.”


$14 mil in state tax refunds returned, unclaimed

California’s Franchise Tax Board announced this morning that it’s holding more than $14 million in returned state income tax refunds, mostly for taxpayers who moved and didn’t update their addresses.

“I want to make sure all taxpayers receive their refunds and as quickly as possible,” state Controller John Chiang, who chairs the FTB, said in a news release. “This is an easy way update your contact information and get the refund before the holiday season.”

Nearly 48,000 refunds, ranging from $1 to $35,000, were returned this year by the U.S. Postal Service. Here’s the breakdown for some Bay Area counties:

    Alameda – 1,382 returns worth $442,000
    Contra Costa – 730 returns worth $254,000
    Santa Clara – 1,681 returns worth $590,000
    San Mateo – 507 returns worth $159,000
    Santa Cruz – 341 returns worth $63,000
    San Francisco – 918 returns worth $497,000

If you suspect some of this money might belong do you, update your address on the FTB’s website; the board will re-issue returned refunds automatically once a new address is received.

Anyone expecting a refund or unsure if they received one can check their status online as well. As of November 29, the board had issued more than 10 million refunds worth nearly $10 billion.