As local property owners, we have enough worries about our own properties. We shouldn’t have to worry about how much our homes’ equity has grown in market value. For most of us, the more our property grows in value, the better our retirement. Right? If local property owners do not vote down the city council’s proposed higher transfer tax rates, then, we will have to worry about how much our property’s worth has grown over the years. Because, when we decide to cash in, we will have to pay more in order to close the deal. But, if the community rejects this major tax increase, it will remain at the current, easily understood rate of less than one-half of one-percent.
Do not be fooled, it’s not what your property is worth on Election Day that really counts. It’s what its future market value is when you sell it. And if past decades are any indicator, the rise in value of our local properties which has consistently averaged over 5%, will continue, over time.
A Rush to Judgement
The four progressive members waited until the last minute and time was running out to put it on November’s ballot. They rushed this tax increase without much public vetting or Finance Advisory Committee input. so it could appear on the up-coming November ballot. They only saw dollar signs and a chance at grabbing some of our hard-earned equity just before we retire.
How Much Will Be Enough?
These members don’t seem to understand that it really does matter how much you have at the beginning of your retirement. By signing on to increase the exit taxes on our nest-eggs, they lower the amount in just how much we will have starting out, during and, therefore, what we will have at the end of our retirement when we will need it the most. Do any of us really know how much we will need to live out our Golden Years?
Sales Tax Dependency
Previous councils all have harped for years that our city’s revenues are too dependent on local sales taxes. But, a sales tax by any other name (even this transfer tax) is just another sales tax based on the selling of local property. Their newly proposed, multi-tiered tax increase, doesn’t really change our city’s dependence on local sales taxes. In fact, it just may make it even more dependent upon it, because during economic downturns, property sales and prices also tend to decline.
There for the Taking
Willie Sutton, the infamous, 1950’s bank-robber was asked by a reporter why he robbed banks, his reply was reported to be simply: “Because that’s where the money is.”
Nest-Egg Sucking
That also seems to be the reasoning behind this progressive majority’s new money-grabbing tax scheme. They want to replace the easily understood single tax rate of less than one-half of one percent with a more confusing, four-tier marginal sales tax—by adding tiers of 1.5%, 3% and 4%. Think of this new scheme as their “nest-egg sucking” tax, just on a much grander, city-wide scale.
Legal Robbery
Checking the present transfer rates posted by the State in July 2020, if this transfer tax is not defeated, Culver City will have the highest multi-tiered transfer rates .; not only in LA County, but, in the state of California. Because in these council members’ minds, when a long-time home owner finally sells, that’s where the money will be … for the taking—just like Willie Sutton.
Waiting Until the End
Don’t let these four council members and other tax advocates fool you into voting for this tax increase measure. Because if they do, after you finally decide to cash in your home equity and retire elsewhere, you can be sure the city will be waiting to strike--just when you close the deal--to suck out some more of your hard-earned home equity out of our nest-eggs , leaving you with even less at the start of your retirement.
Of all the retirees I know, I don’t think any of them would disagree that when it comes to the unknowns of retiring, it is always better to start with more, than to start with less.
One thing about financial downturns is that they come and they go. Pandemics also pass. But, taxes, once voted in, usually take on a life of their own and have the nasty habit of increasing.
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