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To: JF Quinnelly who wrote (13088)	8/24/2003 12:50:39 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

You don't have to convince Tradelite. His two elderly parents are the biggest recipients on the Prop 13 welfare rolls. His elderly Father is the Walt Disney Corporation and his elderly Mother is Federated Department Stores Inc. They collect more Prop 13 welfare rebates than anyone else in California. It's so nice to see a law which gives the "aged corporation" protection from equal responsibility. I for one would hate to see dear Federated taxed out of her many Department stores. Dear Federated has threatened to raise her prices and lose all of her customers to competing stores if she loses her Prop 13 check, but I tend to doubt this. She's just old and senile.

To: JF Quinnelly who wrote (13088)	8/24/2003 8:04:43 AM
From: Tradelite	Read Replies (1) \| Respond to of 306849

If Liz and others in California want to throw out Prop 13 and throw out the older wealthy retirees with the bathwater, Virginia might just welcome the exiles with open arms. Read this from Albert Crenshaw in today's Wash Post, especially the last half of his remarks (....A retiree is a local official's dream citizen.....) ___________________ washingtonpost.com Virginia's Tax Lesson By Albert B. Crenshaw Sunday, August 24, 2003; Page F04 Look at the Washington area over the past 20 years and one thing becomes clear: The bulk of the economic growth and prosperity has been in Virginia. Maryland trails, and economic growth in the District remains little more than a gleam in Mayor Anthony Williams's eye. Look at the relative tax burdens of the three jurisdictions and another thing is clear: Growth has varied inversely with the tax rates on the wealthiest residents. Taxes, of course, aren't the only factor in the Old Dominion's relative boom in the 1990s. Inexpensive land, business-friendly laws and other factors played a role. But when executives are looking around for a place to locate or relocate their businesses, it's hard to imagine that they don't consider the taxes they themselves would pay. Now comes Virginia Gov. Mark R. Warner (D), saying that the Old Dominion's tax structure is out of date and needs to be revised. He has formed a commission to try to do that, but so far it hasn't made much progress. That may be just as well for the state, because despite its image of operating on a soak-the-poor tax policy, several studies have found that the total tax burdens of Virginians -- state and local -- are at most income levels just plain lower than those of D.C. and Maryland residents. A study by Citizens for Tax Justice and the Institute on Taxation & Economic Policy, hardly a bunch of right-wingers, found that in Maryland and the District non-elderly married couples whose incomes ranked them in the lowest two-fifths of the state's population paid between 10 and 11 percent of their income in state and local taxes. In Virginia, by contrast, the state and local tax burden on couples in the lowest two-fifths of income ran from a little under 9 percent to a little under 10. It should be noted that these calculations were based on incomes and tax rates from the mid-'90s, and that, statewide, incomes in each quintile of taxpayers were higher in the District and Maryland than in Virginia. The figures also took into account the fact that some state and local taxes can be deducted on a taxpayer's federal return. And the study showed that in all three jurisdictions, millionaires paid a substantially lower share of their incomes in state and local taxes than low- and middle-income taxpayers did The study did show that the sources of the overall burdens paid by lower-income taxpayers in the three jurisdictions differed. Virginians paid between 0.5 and 1 percentage point more of their income in sales tax than did those in the city, and Marylanders paid about 2 percentage points less. Virginia's top marginal income tax rate of 5.75 percent is considerably lower than the District's 9.3 percent while Maryland's, which varies because of a local piggyback, is in between. Virginia's sales tax is lower, 3.5 percent statewide with a 1 percent local add-on, but it applies (at a lower rate) to grocery-store food purchases, which the District's and Maryland's higher sales taxes do not. So what does Warner really want his commission to do? Raise taxes? That's denied all around. Cut the burden on the low end while raising it on the rich? That sounds good -- fairness and all that -- but as a practical matter the incomes of the wealthy turn out to vary a lot, and states that depend on steeply progressive income taxes see their revenue gyrate unpredictably. Ask the Californians about that. Another thing to keep in mind is that the baby boomers are slouching toward retirement, and while many of them haven't saved nearly enough to live in comfort, there will be a large number who have. Census data already show that many retirees are heading for states that are warm and also have low or no state income tax. Virginia has been picking up a substantial share of these, and officials may want to consider how they can attract more. A well-to-do retiree is a local official's dream citizen: no school-age children, able to spend on eating out and entertainment, and unlikely to qualify for Medicaid. Thus, as unfair as it is in the eyes of many, Virginia's tax system doesn't seem to be serving the commonwealth so badly. Lower-income people may be willing to tolerate a system that favors the "rich" if it makes jobs more plentiful. Plus, the rate may be low, but the rich do pay, and 5.75 percent of something is a lot more helpful than 9.3 percent of nothing. © 2003 The Washington Post Company