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Last login: Tuesday, February 23, 2010
Prop 13 was the worst. It shifted taxing away from a land tax, the most transparent, fair and beneficial form of taxation.
The better way to have solved the tax-increasing problem in an inflating market would have been to make property (or better yet, just land) taxes budget adjusted. Any government entity, say a school district, or city, budget could be divided by the total property/land value within their jurisdiction. This ratio becomes the rate each taxpayer pays. An example of how this works; if land values rise while government budgets remain the same, the ratio would automatically adjust down and your taxes, as they should, will remain the same.
Instead Prop 13 has virtually eliminated the land portion of taxing. My home property that, with no improvements, would easily be worth $500,000 is taxed at $30,000. And what about commercial property? One year after Prop 13 the state legislator added a loophole that allowed large commercial landholders to setup land-owning partnerships that could effectively transfer the land by selling the partnership and not have the land value reassessed. This was done without the super-majority vote of the people that prop 13 mandated. Consequently we subsidize the commercial real estate industry leaving a larger tax burden on incomes earned by the work of all other industries. As a result, there is no shortage of commercial properties; of drug stores, big boxes, shopping centers, banks, etc. and that’s good. But schools, parks and libraries are not doing so well. A healthy State like ours should have, and at onetime, did have, both. Could it be that Prop 13 has changed the market-balanced economy between private and public investment that once defined our State?
February 23, 2010 at 10:07 p.m.
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