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Department of bad ideas: L.A. mulls big-house "luxury tax"

October 30, 2008 |  7:40 am

Hn2sdhkf_mediumI try to greet each day with gratitude, and it is particularly easy to be grateful this morning because I'm reminded how lucky I am: I don't have to cover local politics in Los Angeles.

If I did, I'd have to take seriously the latest cockamamie idea from Councilman Richard Alarcon for a "luxury tax" on residents who own houses that are larger than 5,000 square feet. From City News Service, via the L.A. Times' L.A. Now blog:

Under the proposal, owners of houses that are between 5,000 and 5,999 square feet would be taxed $1,000. Every additional 1,000 square feet would result in another $1,000 in the tax up to 10,000 square feet, which would result in a $6,000 fee. ... In the city of Los Angeles, there are 6,336 single-family residences that exceed 5,000 square feet and 534 houses larger than 10,000 square feet. Taxing those residences would generate $15 million a year. The tax would most affect homeowners in Bel Air, Beverly Crest, Brentwood, Pacific Palisades, Encino, Tarzana, Hollywood, Sherman Oaks, Studio City, Toluca Lake and the Wilshire area. A report by the Chief Legislative Analyst found the “luxury tax” would violate the state constitution if it is based on increments of 1,000 square feet.

Two cents: This is a ridiculous idea. Property should be taxed based on its value, not its size, or its carbon footprint, or how big a shadow it casts.

If you want to read a more serious analysis of the Alarcon proposal, the L.A. Times' Robert Greene has it, here.

-- Peter Viles

Photo credit: Los Angeles Times

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