Monday, August 14, 2006

Corruption, low taxes and personal profit a.k.a. The Republican Party

When California Republican U.S. Rep. Gary Miller sold 165 acres to the city of Monrovia in 2002, he made a profit of more than $10 million, according to a financial disclosure form he filed in Congress. Ordinarily, he would have had to pay state and federal taxes of up to 31% on that profit. Instead, Miller told the IRS and the state that Monrovia had forced him to sell the property under threat of eminent domain. That allowed him to shelter the profits from capital gains taxes for more than two years before he had to reinvest the money.

But there is a problem with Miller's claim: Monrovia officials say that Miller sold the land willingly and that they didn't threaten to force him to sell. Miller, whose 42nd Congressional District includes chunks of Los Angeles, Orange and San Bernardino counties, claimed the same exemption in two subsequent property transactions, allowing him to continue sheltering his profits from the Monrovia sale. And in each of those cases, the purchasers say eminent domain, which allows a government agency to force a sale if it's in the public interest, was neither used nor threatened. For Miller, a millionaire land developer and a senior member of the House Transportation and Infrastructure Committee, repeated use of the forced-sale exemption, IRS Code Section 1033, has enabled deferment of capital gains taxes through at least 2009.

Miller has described being threatened by Monrovia during the bargaining process and said the city gave him no choice but to sell. "The base of the deal was either you sell to us or we'll have to condemn it," Miller said. But records and interviews in Monrovia show that the sale of Miller's land was voluntary. Glen Owens, a member of Monrovia's Planning Commission, said the city could not have used eminent domain to purchase Miller's property, because it was acquiring the undeveloped hillside land for a wilderness preserve using state funding that specifically prohibited forced sales. "The state doesn't go along with eminent domain," he said. "You have to have a willing seller." A letter from then-City Manager Don Hopper at the time of the sale confirms that use of state funds blocked the city from considering eminent domain. A videotape of a February 2000 City Council meeting, packed with people pushing the city to protect the hillside, shows Miller pleading with city officials four times to buy his land. "Why don't you buy my property? I've asked you repeatedly," Miller said.

Another good example of Republican corruption and thirst for personal gain and using their position to game the system everyone else has to play in honestly. The desire to pay little or no taxes is consistent with Republican economic philosophy that deficts don't matter and only the little people pay taxes. Little people, W-2 income workers certainly not the richest 7,500 families or Republican congressmen in insider land deals. My only question is how did Republican Speaker of the House Dennis Hastert (R-IL) miss the IRS Code 1033 dodge in his sweetheart land deal?

BONUS HYPOCRISY POST: From Andrew Sullivan's blog today, "According to the Times of India, the Sri Lankan government just killed 43 children in an anti-terrorist action, when airstrikes repeatedly hit an orphanage in a rebel-held area. 60 girls were also wounded. I await the international condemnation. Maybe if the Israelis had done it, someone would care. But, hey, the Jews are responsible for all the wars in the world aren't they? And all the child casualties of anti-terror campaigns.


Blogger Capt. Fogg said...

So who won - the Sri Lankan Government or the "terrorists?"

How many kids starved this week and how many died of curable or preventable diseases and how many drowned in that tsunami that hardly got mentioned in the paper?

1:44 PM  
Blogger Crankyboy said...

What tsunami? I was busy watching NASCAR.

2:26 PM  
Blogger d.K. said...

I don't know if I'll dare read your column in early November, when we see what happens to Congress in light of your spot on post - my hunch: very little. What should be a decimating of the Republican congress will probably end up with a few changed seats. I hope I'm wrong. I don't think I am. So you think you're cranky now?

5:46 PM  
Blogger Crankyboy said...

Good to hear from you d.k. If only a few seats change in November you won't have to read me - you'll hear me screaming all the way across the country.

7:02 PM  
Blogger Susan Dan said...

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10:07 PM  

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