Posted on 01/05/2005 9:33:34 AM PST by NormsRevenge
California's method of taxing property owners is the most iniquitous system possible, clobbering some taxpayers and letting others skate.
Because homeowners got fed up with being gouged on property taxes 25 years ago, voters defied the power brokers, pundits and politicians and approved Proposition 13, rolling back tax rates and tightly limiting increases.
That sent a shock wave through the political system. But instead of heeding the public's message and getting down to work on the people's problems, the politicians on both sides of the aisles went on strike.
The result is that California's infrastructure has rotted. Public schools have gone from the nation's best to one of the nation's worst. Water issues have gone unresolved. The state is far worse off than it was 25 years ago and its tax system is a disaster.
But it's not Proposition 13's fault. It's the political leadership of the state that has failed to do its duty, allowing gross inequities to develop.
For instance, a first-time home buyer now may face property tax bills 10 times those of their next-door neighbors who bought in the 1970s. Yet each gets the same benefit from tax-supported government services.
But rather than fix what's broken in Proposition 13 by making the system fairer, legislators try to sneak around its badly needed protections. They succeeded a few years ago by rolling back the two-thirds requirement for tax hikes for school bonds to 55 percent. Last year, they tried again with Proposition 56, which would have done the same thing for other public services. Voters recognized it for the scam it was.
Now freshman Assemblywoman Audra Strickland, R-Westlake Village, wants to lower the annual tax bill for first-time buyers by about a quarter, giving relief on the average of $1,200 a year. This is a well-intentioned effort to right the wrongs wrought by Prop. 13, though it is clearly just a piecemeal improvement of a system that needs a total overhaul.
But don't hold your breath. As state lawmakers go into another year with an $8 billion budget deficit hanging over them like a razor-sharp guillotine it seems unlikely they would embrace a measure that would give them less tax money. Last year, the public paid $32 billion in property tax. As it is, Californians will be lucky if they survive the year without another tax increase from Sacramento to help them pay for years of free-wheeling spending.
More than a quarter-century after Proposition 13, the state needs another tax revolt. We need some updated version of this landmark measure that protects the public from outrageous tax bills while ensuring that all taxpayers are treated fairly. The overall tax bill doesn't have to go up; the burden just has to be shared more equitably.
But don't count on Sacramento lawmakers screwing up the courage to tackle the problem with integrity. If real reform is going to come, it will be up to the people, once again, to take matters into their own hands.
Communist double-speak.
They, like my state have a bunch of gutless wonders as reps. Jsut like the ones in Washington, all they worry about is getting re-elected to office.
The problem is SPENDING
Just let the dems try this - if they try to mess with Prop 13 - this state will go totally red in 2006 and 2008!!
Guaranteed!!
On Dr. Walter Williams web site, under "Quotations," is listed this rather surprising quotation from the New York Times of long ago, in opposition to the Income Tax(can you believe it?):
"When men get in the habit of helping themselves to the property of others, they cannot easily be cured of it."
-- The New York Times, in a 1909 editorial opposing the very first income tax"
Now might be a good time to explore the wisdom of ordinary citizens, as well as those statesmen of the time who understood the Founders' Constitution and its protections.
That's not quite true. It's the Democrats who decided to throw a 25-year-long fit about Prop 13.
In this case, the statement happens to be correct. There's no justice in a property tax system that allows one homeowner to be assessed $5,000 in taxes on his property while his next door neighbor is paying $500 in taxes for a larger property with a larger home -- simply because the second homeowner has lived there for 25 years while the first one moved in only 5 years ago.
Sure there is. The owner of the second home knew exactly what he was getting into. The problem is not that there is a difference in taxes, but that State has a voracious appetite for money.
Whoops, I meant that the owner that had moved in more recently and was paying $5000 in property taxes knew exactly what they were getting into. The owner of the first house may not have planned for a 1000% increase in taxes when they bought their house 25 years ago.
Very true! Easy to fix however, reduce the $5,000 tax bill to $500.
That would be fair.
Very true! Easy to fix however, reduce the $5,000 tax bill to $500.
That would be fair.>>>>>>>
Fair would be to eliminate property taxes altogether and go to another system which would allow actual ownership of property, the property tax system makes a deed no more than a long term lease which allows one to rent at whatever rate is set by the government. If the rent is set too high then you are left with an unsalable property which makes it obvious that you did not really own it in the first place. You are then in the position of attempting to sell a lease contract which requires payments so high as to make the contract worthless. So long as property tax is allowed there really is no private ownership of real estate.
Can't have folks getting over on their property tax.
You can bet these guys are in favor of rent control though.
The problem being addressed was people being taxed out of their homes that they owned free and clear, but had increased dramatically in value during the first big real estate boom in the early 1970s.
So, if someone bought their home in 1972 for $50k, their tax rate is based on that amount, increasing by a small percentage annually. Even if that property is now worth $1M, the taxes assessed do not reflect that. Some may argue that the owners "should" be able to afford to pay taxes on the $1M value, but that is not necessarily the case. Many owners have been in their homes for decades, and are now elderly and/or retired, and may not have the means to pay taxes on the huge increase in value of their homes.
I am very familiar with this issue, as I grew up in Los Altos, CA, which is a town that saw some very large gains in property values beginning in 1973.
The way I see it now, if someone can afford to buy a house for $1.x million or more, they can probably pay the $10k+ annual property taxes without too much strain.
I feel the same way about INCOME tax. I pay 10 times more tax than most people and I get far LESS benefit from tax-supported government services. That is a gross inequity too. The very existence of property tax means you never really own your property. You are forced to pay an annual ransom to greedy politicians or risk having your property confiscated.
And if I make 4 times as much money as you, we both should pay an equal $ amount in income taxes?
Just come out and say it: we want to raise everyone's property taxes on a fair market value basis, indexed with inflation and population growth.
Your simplistic comment ignores the realities of California politics and well over 50 years of property tax history. I see you reside in New Jersey. Probably not the ideal location from which to pontificate about the "fairness" of property taxes in California. Proposition 13 was enacted to "put the cuffs" on local politicians whose answer to every problem was to raise property taxes. There is nothing "unfair" about Prop. 13.
Income tax is a completely different story. The original purpose of property taxes (or "chattel taxes" as they were once called) was to tax property owners in a manner that was tied in some way to their use of public infrastructure and other amenities. This was why property taxes were once primarily based on land use and property size rather than on "assessed value" or some other crap like that . . . a shopping center that generates more vehicular traffic than an office building would pay higher taxes, a property owner with 200' of roadway frontage paid twice as much as one with 100' of frontage, etc.
The one issue that is starting to rear its ugly head from a "fairness" perspective is county taxes, which can be based on assessed property values that vary greatly from one town within a county to another.
The irony of California's Proposition 13 is that it has uinevitably resulted in a situation that is remarkably similar to what you find in New York City under the city's rent control laws. People who pay the lower property taxes / rent are effectively being subsidized by those who pay the higher costs. In New York City, you've got people paying $400 per month for five-bedroom apartments on the same block as buildings where a studio apartment goes for $2,500 per month.
As you might expect, this results in a ridiculous charade in which the people who pay the lower costs (and their families) will do whatever it takes to maintain occupancy in these apartments. If you haven't started seeing this in Callifornia already, I predict that sometime in the near future you are going to have cases in which senior citizens will still be "living" even at the ripe old age of 150 just so their children and grandchildren can continure to pay property taxes based on 1970s-era property values.
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