4 ms·

The problem with this single-tax approach, as with all others, is that it ignores human nature. It falsely assumes that the single tax will supersede all other

by grellas 17y ago

The problem with this single-tax approach, as with all others, is that it ignores human nature. It falsely assumes that the single tax will supersede all others. The probable outcome, though, is that such a tax would be, in effect, a massive tax increase on a particular asset class, which would then be added to the other taxes, if not at inception then slowly over time. There is a compelling reason why average Californians cling to Proposition 13 even though its major beneficiaries by far are commercial property holders. They sense intuitively that, if they repeal Prop 13, the dispensers of public largesse in Sacramento (and their counterparts at the county level) will simply devour the new funds and stand there panting for more. If that is the historical record with Prop 13 (and it is), why would anyone want to permit the government to declare open season in a tax sense upon such property as an asset class? Could we really trust our leaders to honor the limitation that is implicit in the idea of a single tax?

thristian 17y ago
For people like myself who aren't familiar with the history of California's constitutional reforms, Wikipedia describes this "proposition 13" as follows: "The proposition's passage resulted in a cap on property tax rates in the state, reducing them by an average of 57%. In addition to lowering property taxes, the initiative also contained language requiring a two-thirds majority in both legislative houses for future increases in all state tax rates or amounts of revenue collected, including income tax rates. It also requires two-thirds vote majority in local elections for local governments wishing to raise special taxes." -- http://en.wikipedia.org/wiki/California_Proposition_13_%281978%29 http://en.wikipedia.org/wiki/California_Proposition_13_%2819...
- grellas 17y ago
  Just to clarify further: In 1978, Californians voted a radical roll-back in property taxes when they enacted Prop 13. This proposition also stipulated that every person owing real property got a baseline valuation (either its fair market value in 1978, when Prop 13 took effect, or its fair market value on the date of any transfer upon its sale), from which the tax could only increase at a maximum of 2% per year. Thus, companies like HP, which owned vast tracts of valuable property in prime areas, have reaped huge benefits from this cap because they are effectively paying property taxes on values from a different era altogether. Young couples who bought small condos within the past 5 years are also paying far more in property tax than upper middle class persons living in fancy suburbs (those who have held their homes since 1978). Yet, in spite of the obvious inequities that have resulted, voters won't even touch any attempts to repeal Prop 13 or even to enact special propositions that would put commercial property owners on a separate, higher-taxed path. The reasons, I think, are those I set forth in my comment above - they don't trust what public officials will do with an expanded taxing power.

by grellas 17y ago

thristian 17y ago

For people like myself who aren't familiar with the history of California's constitutional reforms, Wikipedia describes this "proposition 13" as follows: "The proposition's passage resulted in a cap on property tax rates in the state, reducing them by an average of 57%. In addition to lowering property taxes, the initiative also contained language requiring a two-thirds majority in both legislative houses for future increases in all state tax rates or amounts of revenue collected, including income tax rates. It also requires two-thirds vote majority in local elections for local governments wishing to raise special taxes." -- http://en.wikipedia.org/wiki/California_Proposition_13_%281978%29 http://en.wikipedia.org/wiki/California_Proposition_13_%2819...

grellas 17y ago
Just to clarify further: In 1978, Californians voted a radical roll-back in property taxes when they enacted Prop 13. This proposition also stipulated that every person owing real property got a baseline valuation (either its fair market value in 1978, when Prop 13 took effect, or its fair market value on the date of any transfer upon its sale), from which the tax could only increase at a maximum of 2% per year. Thus, companies like HP, which owned vast tracts of valuable property in prime areas, have reaped huge benefits from this cap because they are effectively paying property taxes on values from a different era altogether. Young couples who bought small condos within the past 5 years are also paying far more in property tax than upper middle class persons living in fancy suburbs (those who have held their homes since 1978). Yet, in spite of the obvious inequities that have resulted, voters won't even touch any attempts to repeal Prop 13 or even to enact special propositions that would put commercial property owners on a separate, higher-taxed path. The reasons, I think, are those I set forth in my comment above - they don't trust what public officials will do with an expanded taxing power.