Berman Pushes for Quake Tax Relief

Rep. Howard L. Berman (D-Panorama City) on Friday pledged to push Congress to grant income tax relief to Los Angeles residents whose damages from the Northridge earthquake aren’t high enough to be deducted from their federal income taxes.

Berman told a meeting of the San Fernando Chamber of Commerce that a bill he introduced this month would remove a restriction on deductible casualty losses, which now must exceed 10% of a taxpayer’s adjusted gross income before they can be subtracted. If the restriction is removed, taxpayers could deduct the full amount of the casualty loss.

Earthquake insurance typically carries a steep deductible.

Many taxpayers face losses too low to meet their insurance deductible or the 10% threshold, Berman said.

“Huge numbers of people will not be getting grants or loans,” said Berman, whose 26th Congressional District includes San Fernando. “It’s going to wipe out the life savings of people.”

With a host of California co-sponsors, Berman introduced the tax reform bill Feb. 8. It is currently in the House Ways and Means Committee.

Prodded by business owners irritated over government regulation, Berman agreed that the disaster showed federal officials could cut red tape if they had the will.

He said Congress might reconsider some of the regulations it enacted, however well-intentioned they may have been.

“Many of the procedures bogging down government were enacted to deal with other abuses,” Berman noted. “Maybe there’s a logic to re-examining how much of what we were hoping to achieve we actually accomplished.”

The congressman also pledged to keep the federal government focused on California’s more long-term disasters: the collapse of the defense industry and the deep recession plaguing the region.

“All of the defense-conversion issues will be continued,” Berman said after the address. “They (the White House) are aware of the importance of California to the economy and to the elections.”

For Berman, Friday’s appearance also was a chance to hear praise for the federal relief effort in the San Fernando Valley, particularly in the city of San Fernando.

City and chamber officials credit him with persuading federal agency heads to open a disaster aid center in San Fernando, and ensuring that the small city did not get lost in wider relief efforts.