7 ms·
Proposition 13 didn't do that; the various governments who petulantly refused to adapt their tax regimes to the Prop 13 limits did. The bizarre incentives creat
by bcoates 11y ago
Proposition 13 didn't do that; the various governments who petulantly refused to adapt their tax regimes to the Prop 13 limits did. The bizarre incentives created by almost 40 years of attempting to strong-arm voters into giving power back to legislatures could be fixed by legislatures without doing anything to Prop 13.
- Redoubts 11y agoWhat exactly should they do?
- skuhn 11y agoDon't make all of your money from a property tax that does not increase as your costs to provide services increase. There are options besides property tax for raising tax revenue. City-level local income tax is the first thing that comes to mind.
- Camillo 11y agoSo you want to increase the tax burden on productive economic activity to benefit people who are just capturing rent. That's a horrible idea.
- skuhn 11y agoI don't believe that's what I said. Cities in California have services they are obligated to provide -- police services, for instance. The cost of those services over time has increased proportional to salaries. However, the revenue gathered to pay for those services has only increased proportional to property values -- which are artificially trapped in the 1970's to a large extent. That is an untenable situation, and it is a large part of California's problem at a local level.
- aidenn0 11y agoAre you proposing abolishing property tax? Because nowhere in ubernostrom's post did he talk about city revenues, just about the perverse incentives to land-owners by Prop 13, and those will exist unless property tax is eliminated.
- skuhn 11y agoI didn't respond directly to ubernostrom, and my comment doesn't discuss whether prop 13 creates a perverse incentive for landowners in any respect (although: it does). I'm saying that if you tie your revenue stream (i.e. taxes) to something that is essentially fixed at 1970's levels, but you have to buy things with it in 2015 money, you are going to not have a good time. You can still keep property tax as part of your revenue stream, but these governments need to diversify. I would personally rather they diversified into income tax than some of the alternatives, such as red light cameras.
- steven2012 11y agoNothing is fixed to 1970s levels. Property taxes get reassessed when there's a sale on the property. How many properties in CA have not changed hands since 1970, ie more than 40 years? Probably none, since that's almost 2 generations of families.
- skuhn 11y agoI think you might be surprised. There are a ton of exceptions to reassessment [1]. A notable one is that transfers from parent to child are typically excluded, meaning that you can indeed pass down low property taxes from generation to generation. Commercial property is also covered under the same rules, and there are ways to keep it from being reassessed [2][3]. Improvements to the property will trigger reassessment, if the changes pass a certain threshold. This incentivizes owners not to improve their property (particularly externally). Look around San Francisco, and you can see the effect this has had (along with other factors like rent control). Anecdotally, I've heard of people replacing one window a year because they didn't want to trigger a reassessment. That is just flat out absurd. There is a cottage industry dedicated to avoiding property tax reassessment, entirely because of prop 13. This isn't how it works elsewhere in the country. There are other, better solutions out there. However, it is virtually impossible to alter or repeal prop 13 because it was a ballot proposition -- it will outlive all of us. [1] https://www.boe.ca.gov/proptaxes/faqs/changeinownership.htm https://www.boe.ca.gov/proptaxes/faqs/changeinownership.htm [2] http://closetheloophole.com/history http://closetheloophole.com/history [3] http://www.sacbee.com/news/politics-government/capitol-alert/article23689426.html http://www.sacbee.com/news/politics-government/capitol-alert...
- eru 11y agoProperty taxes are awesome: they do not distort economic activity (if done right), and they are hard to evade (since you can't hide your land).
- skuhn 11y agoOK. So then I take it we can agree that they shouldn't be artificially capped for some people because they got here first.
- eru 11y agoDefinitely. Just make property taxes proportional to self-reported value of the property. (With the catch that you have to sell to any would-be buyer who offers to pay the reported value. Just to keep people honest.)