Monday, May 13, 2013

Private equity, public inequity

Why does it matter that Gabriel Gomez (R-private equity) took a $280,000 tax deduction on the facade of his home? Don't we all try to squeeze every last dime off our tax bills? Isn't that the good ole American way?

No, and here's why.

The Town of Cohasset values Gomez's property at a little more than $2,000,000. (Go here and search for parcel 27-094.  It's actually not his any more, as he sold it for $1 to his wife in 2008.) This value matches up with Zillow's current estimate, which makes Zillow's 2005 estimate of value credible. Zillow has tended to inflate the market anyway, which would work to Gomez's advantage.

Taking Zillow's 2005 number of $2.3 million, Gomez's tax deduction was over 12% of the total value of his property, pretty extreme. It gets worse when you realize he's valuing the appearance of the facade only, not the twelve bedrooms or the five bathrooms or the land.

Then, it turns out, as the Boston Globe reports, that Gomez's alteration of the facade was already restricted by a town bylaw and thus not his to donate.

One specialist in conservation easement law, Scott Knott, a tax partner in The Ferraro Law Firm in Washington, D.C., said that if easements mandated by local laws are already in place, homeowners have nothing to claim as a tax deduction.

“The key is the valuation of the easement and if there is already a restriction on the property, the value is not diminished by the easement,’’ said Knott. “The value of any easement that has the same restriction already in place is zero.’’
If you want to go all Fifth Amendment on me, you're too late to make the town's bylaw a taking. Gomez bought the house in 2004, well after the establishment of the Cohasset historical district in 1996. So Gomez bought the property with restrictions already on it, and those restrictions necessarily would have figured in the price he paid for it. (Of course, living in a historic district generally raises property values instead of lowering them.)

OK, Gomez's spokesman said, but now he can't sue for relief if the Cohasset Historical Commission won't let him make a change. Except, he can still seek relief in court.

Like Ann Romney's tax deductible horse hobby, this is an outrage of sharp abuse of the tax code. No legitimate public purpose is served by it, just the enriching of the already wealthy out of the public treasury.

This is who Gabriel Gomez became by descending into private equity. Don't the plutocrats already have enough people in Congress - especially in the Senate - whose avowed purpose is to help the wealthy grab even more of the nation's income?

We in Massachusetts took a brave step forward in electing Elizabeth Warren. Gabriel Gomez would work to destroy every single thing that Warren is accomplishing in Washington.

We simply must reject Gomez's candidacy and elect Ed Markey.


Anonymous said...

Typical of an extreme leftist to blame anyone from wanting to pay as little "protection" money as possible. In fact, because of you leftists, no one in America owns ANY real estate. It is also because of you communists that people and businesses are reluctant to improve upon existing structures and land because it means a larger "protection" payment each year. I wonder just how much this tactic has stifled progress in America? I'm sure it is massive. Thanks again Fidel.

lovable liberal said...

You can always tell a massive right-wing douchebag by the diarrheal intensity with which he defends obvious tax evasion. For the wealthy, that is...

Anonymous said...

no one in America owns ANY real estate

Dude???? HUH???

lovable liberal said...

The douchebag in comment 2 thinks he doesn't own his property because he can't set off a nuke in his backyard, he has to pay taxes ("'protection'") on, and he can't turn his property into an eyesore, earsore, or nosesore that damages his neighbors.

It's really stupid fucking nonsense.

He won't be happy until he's gone Galt to own goddamn asteroid. Ironically, that would make the rest of us, whom he's not in the least interested in, happy, too.

Anonymous said...

What is "really stupid fucking nonsense" is that you libtards have destroyed private property rights in America. Hummmm and asteroid without libtard communists...that's a great idea Chairman Mao. I'm going to declare the largest asteroid a haven for freedom loving Americans. I believe it's called Ceres. I'm going to rename it "Reagan." Libtards are not permitted to visit Reagan or they risk capital punishment upon arrival. There must be at least one place in the solar system maintained free of planet destroying liberal maggots.

lovable liberal said...

Rename Ceres? Someone has delusions of adequacy.

Please, there's the door.