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Oakland firm owes state $16.6m, but may be gone

An importing company with an Oakland address now holds second place on the state Board of Equalization’s updated Top 500 list of sales and use tax delinquencies.

The list, mandated by state law, encourages those who owe the delinquent taxes to pay their delinquencies by publicly posting the 500 largest unpaid sales and use tax debts online. The money owed to the state by these top 500 deadbeats totals $555.7 million.

But what if there’s no “there” there?

C & JD USA Inc., listed at an Oakland address, places second on the list with a $16,618,135 debt, first liened by the state in August 2010 and reported here three months later. By all indications, the company just isn’t there; the Oakland phone number is disconnected, and there’s no phone associated with the Torrance address shown in the Secretary of State’s business entities database.

Although the Secretary of State’s database lists the business as active, “they’re not active to us – they have a closed, invalid seller’s permit and obviously they’re not paying their debts,” said Brian Miller, spokesman for the Board of Equalization.

In fact, Miller said, the permit was closed more than a year before the August 2010 lien; he couldn’t say if there’s been any direct contact with the firm or its principals since then.

Posted on Friday, March 2nd, 2012
Under: taxes | 1 Comment »

How they voted on the payroll tax cut extension

The Bay Area’s House delegation wasn’t in lockstep on today’s 293-132 vote approving a compromise to extend the payroll tax cut: Most felt it was a vital move, but a few said it’s just not good enough.

Among those voting for the bill were Reps. George Miller, D-Martinez; Mike Honda, D-San Jose; Jerry McNerney, D-Pleasanton; Pete Stark, D-Fremont; Zoe Lofgren, D-San Jose; Anna Eshoo, D-Palo Alto; Jackie Speier, D-Hillsborough; and Minority Leader Nancy Pelosi, D-San Francisco. Here’s what Miller said:

“Passage of this bill is critical for working families in our country; people who will get to keep on average an extra $1,000 in their paycheck this year, the unemployed who will continue to get insurance benefits, and for Medicare patients who will continue to see the doctor of their choice. Republicans opposed extending the payroll tax cut and unemployment benefits but in the end they succumbed to public pressure. But this is not a perfect bill. Democrats fought for a small increase in taxes on people who earn more than $1 million per year to help pay for the cost of this bill. The Republicans refused – once again – to ask people who earn more than one million dollars a year to shoulder any burden in our struggling economy. Democrats will continue to fight for a fair and balanced solution to our economic problems, but today’s bill is an important victory for working families, the middle class, and seniors. We’ve got a lot of work to do to rebuild the economy so everyone benefits and this bill keeps us on that path.”

Honda seemed more conflicted:

honda.jpg“Today, I was faced with one of the more difficult votes in my Congressional career. While our economy is fragile, and Congress must use every tool within our arsenal to keep the recovery on the right track, we are faced with the realities of a split Congress and a Republican controlled House of Representatives. Months ago, Democrats put forth a proposal to extend the payroll tax holiday, unemployment insurance, and SGR for the entire year by simply asking the wealthiest among us to pay a fraction more. Republicans, bent on ideological extremism, did not allow this bill to go through. That is how we got to today’s vote.

“The compromise deal before me today was supported by 9 Democrats and 8 Republicans of the conference committee. In order to move forward, each party had to accept provisions that we oppose. I was particularly disappointed to see offsets that imposed additional costs on federal employees and curtailed health care access. A Democratically-controlled Congress would have not relied on services and benefits for lower and middle class Americans to move our economy forward. Make no mistake; these are the aims of Republicans in Congress, and they were placed in the conference report because of a Tea Party agenda; one that continues to finance short-term solutions by cutting long-term programs that critically affect the future of our nation. I remain committed to fighting for all Americans, both private and public sector employees. I remain committed to affordable health care, for families of all economic backgrounds. And I remain committed to strong economic recovery.

“Today’s vote puts $1,000 in the pockets of 160 million American workers, extends unemployment benefits for millions of those that have lost their job through no fault of their own, and ensures that millions of seniors will have access to their doctor through Medicare. It will also finally authorize much needed spectrum auctions that will provide essential space to innovative Silicon Valley companies to create a new generation of technologies. Governing requires tough decisions, and on the whole, this tough decision required me to support this bipartisan deal, even when there were portions with which I vehemently disagreed.”

But Reps. Barbara Lee, D-Oakland; Mike Thompson, D-Napa; and Lynn Woolsey, D-Petaluma, voted against the deal. Here’s what Lee said:

Barbara Lee (Dec-2010)“Today, I voted against the conference report for H.R. 3630 because it reduces unemployment benefits, cuts preventative health care programs, and unfairly targets federal employees’ retirement. This bill was intended to provide relief to American families by allowing workers to keep more of their paychecks. This bill was intended to provide support to the unemployed by extending critical unemployment benefits. I have grave concerns that this deeply flawed and disappointing package of extensions does not do enough during these tough economic times. While I believe we must approve vital extensions of unemployment benefits, quickly extend the payroll tax holiday, and extend the Medicare SGR fix so that millions of seniors will continue to have access to their doctors, this proposal is a step in the wrong direction.

“In fact, this bill makes significant cuts to struggling families. Instead of scaling back unemployment benefits we need to be adding weeks to help people get by when there continues to be four workers in line for each job. Instead of a temporary fix to Medicare physician reimbursement we should have a permanent fix that fairly compensates doctors who care for our seniors. Instead of raiding the pensions of hard working federal employees we should be standing up for these workers. Instead of cutting preventive and healthcare programs we should be supporting them.

“We cannot cut our way to prosperity and recovery. We must make smart investments in education, infrastructure and in the American people to grow our economy and restore a pathway to opportunity, prosperity and economic mobility for our future generations. We can and should do better than this.”

Posted on Friday, February 17th, 2012
Under: Barbara Lee, George Miller, Mike Honda, taxes, U.S. House | 3 Comments »

Pete Stark jabs at Gingrich with ‘NEWT Act’

Rep. Pete Stark gave Republican presidential candidate Newt Gingrich a political poke in the eye today by introducing a bill to close a loophole that lets certain self-employed people – including lobbyists – lower their Medicare payroll tax liability by calling their earnings profits or dividends rather than wages.

Pete StarkStark, D-Fremont – the ranking Democrat on the Ways and Means Health Subcommittee, which oversees Medicare – calls it the Narrowing Exceptions for Withholding Taxes Act.

Yes, that’s right: The NEWT Act.

The bill, Stark says, was inspired by Gingrich’s recently released 2010 tax returns, which showed he used the loophole to save an estimated $69,000 in Medicare taxes.

“It seems Gingrich is continuing to do his part — in his own infamous words — to let Medicare ‘wither on the vine.’” Stark said in a news release. “By taking full advantage of a tax loophole often used by wealthy self-employed lawyers and lobbyists to slash their tax liability, Gingrich is happy to undermine Medicare. This tax dodge throws cold water on his feigned concern for the future of Medicare.”

This provision passed the House of Representatives in 2009 as part of HR 4213, the American Jobs and Closing Tax Loopholes Act of 2010; at the time, the Joint Commission on Taxation estimated that closing this loophole would save taxpayers $11.2 billion over ten years.

Newt GingrichAll earners are subject to a 2.9 percent tax on wages, which helps fund Medicare, but employee-shareholders at S corporations can use an existing loophole to shield earnings from the Medicare tax by classifying them as profits or dividends instead of as wages. For 2010, Gingrich reported $444,327 of his earnings as wages from Gingrich Holdings, Inc. and Gingrich Productions. By classifying another $2.4 million in profits or dividends he avoided paying an estimated $69,000 in Medicare taxes.

Stark’s NEWT Act would expand the income categories that are subject to Medicare payroll taxes so employee-shareholders of S corporations could no longer avoid paying this tax by reporting artificially low wage income and correspondingly higher dividends or profits. Certain employee-shareholders of S corporations would have to calculate their Medicare payroll tax obligation based on their share of the S corporation’s profits or dividends, not just income reported as wages. The individuals subject to the provision are the employee-shareholders of a professional service business where the principal assets of that business are the skills and reputations of three or fewer individuals.

The bill targets the S corporations that have been identified as the most likely to abuse the system, Stark said: professional service businesses engaged in health, lobbying, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, brokerage services, or investment advice or management.

The Government Accountability Office estimates that in the 2003 and 2004 tax years, individuals who used S corporations underreported more than $23 billion in wage income; the median misreported amount was $20,127.

Stark’s news release cited a New York Times article to illustrate that it’s a bipartisan problem: Former U.S. Senator and 2004 Democratic vice presidential nominee John Edwards used the same method to avoid $591,112 in Medicare payroll taxes over four years in the late 1990s.

Posted on Tuesday, January 31st, 2012
Under: 2012 presidential election, Pete Stark, taxes, U.S. House | 7 Comments »

California, meet Propositions 28 and 29

Secretary of State Debra Bowen has announced the numbers for the two measures set to appear on the June 5 ballot, and interested Californians now can submit arguments to be considered for inclusion in the state’s official voter information guide.

Here are the ballot measures, with their official titles and summaries as written by the state attorney general’s office:

Proposition 28 – Limits on Legislators’ Terms in Office. Initiative Constitutional Amendment. Reduces the total amount of time a person may serve in the state legislature from 14 years to 12 years. Allows a person to serve a total of 12 years either in the Assembly, the Senate, or a combination of both. Applies only to legislators first elected after the measure is passed. Provides that legislators elected before the measure is passed continue to be subject to existing term limits. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: No direct fiscal effect on state or local governments. (09-0048)

Proposition 29 – Imposes Additional Tax on Cigarettes for Cancer Research. Initiative Statute. Imposes additional five cent tax on each cigarette distributed ($1.00 per pack), and an equivalent tax increase on other tobacco products, to fund cancer research and other specified purposes. Requires tax revenues be deposited into a special fund to finance research and research facilities focused on detecting, preventing, treating, and curing cancer, heart disease, emphysema, and other tobacco-related diseases, and to finance prevention programs. Creates nine-member committee charged with administering the fund. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Increase in new cigarette tax revenues of about $855 million annually by 2011-12, declining slightly annually thereafter, for various health research and tobacco-related programs. Increase of about $45 million annually to existing health, natural resources, and research programs funded by existing tobacco taxes. Increase in state and local sales taxes of about $32 million annually. (09-0097.)

People can submit arguments for or against any measure, and those selected for the official ballot guide will be on public display from Feb. 21 through March 12.

State law gives first priority to arguments written by the initiative’s proponents, and then to bona fide citizen associations, and then to individuals. No more than three signers are allowed to appear with an argument or rebuttal to an argument. Ballot arguments can’t exceed 500 words and rebuttals can’t exceed 250 words; all submissions should be typed and double-spaced, and can be hand-delivered to the Secretary of State’s Elections Division at 1500 11th Street, 5th Floor, Sacramento, California 95814; faxed to (916) 653-3214; or emailed to If faxed or emailed, the original copies must be received within 72 hours. The deadline for ballot arguments is 5 p.m. next Tuesday, Feb. 7; the deadline for rebuttals is 5 p.m. Thursday, Feb. 16.

Posted on Monday, January 30th, 2012
Under: ballot measures, taxes | 5 Comments »

The full text of Jerry Brown’s ‘State of the State’

Gov. Jerry Brown has just delivered his annual State of the State address to the Legislature, saying the state is “on the mend” and laying out an economic agenda for the coming year.

My esteemed colleague Steve Harmon will be writing the story on this today, but if you’d like a double-barreled blast of Jerry right here and now, you can read the speech as prepared, after the jump…
Read the rest of this entry »

Posted on Wednesday, January 18th, 2012
Under: economy, Jerry Brown, taxes | 6 Comments »

‘Think Long Committee’ won’t go for 2012 ballot

The Think Long Committee for California – a panel of experts funded by an itinerant billionaire that had developed plans for tax reform and a citizens’ oversight committee – will delay putting its plans to voters from 2012 to 2014.

The committee, which released its report in November, issued a statement today sying it has been “vigorously discussing and developing a viable action plan and timeline for implementing our broad range of proposals ever since.”

“Consistent with our collective view that California needs to think, plan and act for the long term, we’ve been guided by the cardinal rule that it is far more important to get our reforms done ‘right’ than ‘right away,’” the committee said.

The committee had proposed broadening the state’s tax base while raising $10 billion per year in new revenue by extending the state sales tax to services such as auto repair, dry cleaning, legal work and accounting (but not health care or education), while lowering the sales tax on goods, reducing personal income tax rates and reducing the corporate tax rate.

It also proposed creating an “independent, impartial and nonpartisan” Citizens Council for Government Accountability. That council would have 13 members — including nine named by the governor — to oversee government functions and conduct long-term planning. It would have power to place measures directly on the ballot without collecting signatures, and to have the secretary of state publish its comments and positions on measures in the state voters’ guide. It also would have the power to subpoena witnesses and documents.

Members of the committee include former Gov. Gray Davis; former Assembly speaker and San Francisco mayor Willie Brown; former U.S. secretaries of state Condoleezza Rice and George Shultz; GOP power broker Gerald Parsky; Google Chairman Eric Schmidt; and many others. Committee founder and funder Nicolas Berggruen had promised to put up at least $20 million to convince voters to implement these plans as ballot measures in 2012.

Although the proposals had seemed to meet with muted, if not negative reactions from many current politicos, the committee’s statement today says it was “gratified by the overwhelming interest from elected leaders in both parties, including Governor Brown, stakeholders and everyday citizens in these bold, broad-based changes.”

California is “hungry for real reform and are more willing than ever to support a sweeping plan that is fair and will put an end to California’s perpetual financial volatility and suffocating wall of debt,” the committee said.

“At the same time, we recognize the practical constraints of the 2012 election calendar – and have come to the conclusion that it will take more time to perfect these proposals, eliminate unintended consequences and provide every stakeholder and everyday Californians a meaningful voice in that process,” it said.

And so the committee will keep trying to sell the plan with hopes of putting it to voters on the November 2014 ballot.

“In the meantime, a high-turnout election is a terrible thing to waste. California voters deserve the opportunity in 2012 to begin the long process of reforming state government,” the committee’s statement said. “Therefore, in the coming days, we will be announcing our intention to partner with other organizations by generously supporting one or more reform measures that have already been filed for the 2012 elections, consistent with our Blueprint.”

The statement doesn’t specify which measures the committee will back.

The committee said it also will co-sponsor the California Economic Summit in May to develop a statewide job creation and competitiveness implementation plan; support regulatory reform, including that of the California Environmental Quality Act, to maintain the state’s environmental leadership while speeding up permissions for job-creating projects; and work with the governor and other state, federal and local officials to create “plug-and-play” pre-permitted zones to attract new investment to California.

UPDATE @ 3:40 P.M.: Gov. Jerry Brown just issued this statement: “Think Long is doing very important work and I look forward to working with them on the critical issue of more permanent tax reform.”

Posted on Tuesday, January 17th, 2012
Under: ballot measures, taxes | 1 Comment »

Tax touters seek Kim Kardashian’s support (?)

How better to build support for a millionaires’ tax than to pick on one of California’s most annoying millionaires?

So they must’ve thought over at the Courage Campaign, which launched this video this afternoon:

“We love Ms. Kardashian’s sense of style and we know she gets lots of attention,” Courage Campaign founder and chairman Rick Jacobs said in a news release. “Now we want to catch her eye and ask her if she’ll support our tax proposal which asks the rich to pay their fair share in our state. Why not? After all, California’s middle class continues to suffer from endless budget cuts, and we hope to catch Ms. Kardashian in the holiday spirit.”

Seems like a win-win for the would-be taxers. If she agrees with them, it’s a high-profile celebrity endorsement. If she doesn’t, it gins up some blue-collar outrage.

For what it’s worth, I do see that Kim Kardashian is registered as a decline-to-state voter.

The Courage Campaign is a member of the Restoring California Coalition, which is pushing one of the many tax-hike proposals seeking a place on next November’s ballot. The coalition last week touted poll numbers it claims show is most popular among voters and so has the best chance of passing.

Posted on Monday, December 19th, 2011
Under: ballot measures, state budget, taxes | 5 Comments »

Progressives say polls back millionaires tax

With a blizzard of tax-hike measures vying for slots on next November’s ballot, a coalition of labor and progressive groups said today that polling shows their “millionaire’s tax” is the most popular.

So popular, in fact, that proponents say everyone – including Gov. Jerry Brown, who has a different plan of his own – should support it as the only one that has a chance of passing.

The Restoring California Coalition – comprised of more than two dozen groups including unions such as the California Federation of Teachers and progressive groups such as the Courage Campaign – last week submitted to the Attorney General’s office a proposed measure that would hike taxes on income over $1 million by 3 percent and over $2 million by 5 percent. The coalition says this would raise about $6 billion per year, to be spent on K-12 and higher education; services for seniors and the disabled; child care; police and fire services; and roads and bridges.

California Federation of Teachers President Joshua Pechthalt told reporters on a conference call today that the plan “does not put it on the backs of working families and middle class families who have been suffering, particularly during this economic downturn,” and “resonates with the growing awareness of economic and tax inequity that we’ve seen in recent months.”

Pollster Ben Tulchin said he has interviewed nearly 5,000 likely November 2012 voters in several surveys this year and conducted 16 focus groups around the state, finding strong support for such a measure.

Voters’ perceptions that the rich have gotten richer while the middle class has struggled in recent years, and that the rich don’t pay their fair share in taxes, surged from May to October, perhaps due to rhetoric coming from the Occupy movement, the White House and other quarters, Tulchin said.

He said his October survey found 73 percent of voters are open to raising taxes on the wealthy in order to restore funding to essential services that have been cut, such as education, health care and public safety, while 24 percent said they’re not and 3 percent said they don’t know.

When read a title and summary for their proposal that the proponents believe is similar to what the Attorney General’s office will prepare, 67 percent said they would tend to vote yes – including 37 percent who gave a definite yes – while 24 percent said they would tend to vote no, with 15 percent a definite no. “I have never in my career seen such strong numbers for a title and summary poll for a proposed ballot measure,” Tulchin said.

Support for the plan is at 84 percent among Democrats, 68 percent among decline-to-state or third-party voters, and 45 percent among Republicans, he said. “The fact that it can draw bipartisan support puts it with the best chance of winning.”

In contrast, only 36 percent (14 percent definite) said they would vote for a plan including a 1 percent sales-tax hike and a 0.25 percent income tax hike, while 62 percent are opposed (with 45 percent a definite “no”). “That dog won’t hunt,” Tulchin said.

And the idea – advanced last month by the Think Long Committee – of lowering the state’s sales tax rate for goods but extending the tax to services such as dry cleaning, auto repair, accounting and law say 40 percent support (16 percent definite) and 45 percent opposition (26 percent definite). Tulchin called that “another dead end.”

Lots more, after the jump…
Read the rest of this entry »

Posted on Thursday, December 15th, 2011
Under: ballot measures, polls, state budget, taxes | 3 Comments »

Occupy, taxes and Prop. 8 on ‘TWINC’

Last night on KQED’s “This Week in Northern California,” we talked about the Occupy movement’s status and future; new evidence of income disparities in California; and whether the movement has helped spur new moves toward tax increases here and around the world. Also, Scott Shafer led the discussion on this week’s Prop. 8 action before the 9th U.S. Circuit Court of Appeals.

Posted on Sunday, December 11th, 2011
Under: same-sex marriage, taxes, TWINC | No Comments »

What they’re saying about Jerry Brown’s tax plan

Gov. Jerry Brown today issued an open letter to Californians announcing, as expected, that he’s filing a proposed ballot measure to hike income taxes on those making more than $500,000 a year and temporarily boost the state sales tax by half a cent to prevent devastating budget cuts in education and public safety.

From state Senate President Pro Tem Darrell Steinberg, D-Sacramento:

“Californians realize that four years of draconian cuts have swung the pendulum too far. We’ve done enough damage, and enough is enough. It’s time to stop the bleeding and begin reinvesting in public education and local public safety. The Governor’s plan dedicates new revenue where it’s most needed – guaranteed to go directly into our public school and community college classrooms. At the same time, it protects ongoing funding for local public safety programs. The temporary taxes also create a more equitable system, with everyone paying a little more in sales tax while the wealthiest among us pay their fair share at a time when they enjoy record income growth. Bringing more balance to the support of essential services will begin to restore the greatness of our state.”

From state Senate Republican Leader Bob Dutton, R-Rancho Cucamonga:

“Clearly the governor has put tax hikes ahead of job creation. Californians have consistently voted down tax-only proposals. Senate Republicans continue a call to action on reforms first. Only with reforms can we put Californians back to work and restore the people’s confidence in state government.”

From Assembly Speaker John Perez, D-Los Angeles:

“The Governor’s revenue plan is fair, focused and forward-thinking. The plan asks the wealthiest among us to pay their fair share and takes us another major step forward on getting control of our long-term finances. More importantly, this plan helps minimize the need for cuts to higher education and other critical services and ensures that California is making the kinds of investments in education and public safety that will keep our communities safe and help our economic prosperity in the long term. I believe this is a plan that every Californian can and will support, and I look forward to working with the Governor and my colleagues in the Legislature to win approval from the voters.”

From Assembly Republican Leader Connie Conway, R-Tulare:

“Governor Brown is once again relying on his failed budget playbook in proposing a massive $35 billion tax increase on hard-working Californians and job creators. Voters rejected similar tax increases in the past and have shown a strong reluctance in polls to accepting higher taxes to bailout Sacramento. Ironically, Sacramento Democrats are again proposing higher taxes at a time when Washington Democrats are suggesting a tax increase on families could plunge the country back into recession.

“Despite their rhetoric, it is clear that our state’s projected $13 billion budget shortfall is not the result of a lack of revenue, but rather that Democrats want to grow government spending by $10 billion next year. The majority party’s budget priorities are clear – sock working families with a painful tax increase to pay for more health and welfare spending and unsustainable public employee pensions, while education continues to take a massive hit. Assembly Republicans will again stand united as the last line of defense for taxpayers and will fight these reckless taxes every step of the way.”

Read more after the jump…
Read the rest of this entry »

Posted on Monday, December 5th, 2011
Under: Assembly, ballot measures, Bob Dutton, California State Senate, Connie Conway, Darrell Steinberg, Jerry Brown, John Perez, Nancy Skinner, state budget, taxes | 8 Comments »