Storming the Prop. 13 battlements (No on Prop.88, Real Estate parcel tax)

Orange County Register ^ | Aug. 27, 2006 | OCR Editorial

[FairOpinion]

Prop. 88's statewide parcel tax would begin to chip away at state's property-tax protections. Proposition 13 faces one of its most serious challenges on the ballot this fall, in the form of Proposition 88.

Prop. 88 is a statewide parcel tax – the first such statewide tax in California since 1910.

Finally, this breach in the bulwarks of Prop. 13, although small, could be widened in the future should Prop. 88 pass. As has been seen with other taxes, such as those on cigarettes, the victory of one tax leads to attempts, sometimes victorious, to impose more of the same type of tax. If Prop. 88 wins, it would encourage copycat assaults on property in the form of new parcel taxes.

Soon, the state could be back in the same dreary days of 1978, with retirees on fixed incomes losing their homes because they couldn't pay the taxes, before Prop. 13 was enacted. Been there, done that.

We recommend a No vote on Proposition 88.

[FairOpinion]

I agree. NO on Prop. 88.

[FairOpinion]

For the record:

Prop. 88 (Parcel tax for education): Schwarzenegger: No; Angelides: Undecided

http://www.contracostatimes.com/mld/cctimes/news/state/15265015.htm

[BenLurkin]

Bump

[NormsRevenge]

Whatever did happen to old what his name?

Associated Press

Warren Buffett, shown addressing a forum earlier this year, shocked political observers by joining Arnold Schwarzenegger's gubernatorial campaign

Warren Buffett seems full of surprises
He supports higher state property taxes

August 17, 2003

I remember something about Prop 13 needed some adjustments made or such being his downfall.

[DB]

The state has had a huge windfall in property taxes with the run up of property values over the last few years.

Over $11k per student for education is enough!

Even with a small class of 20 students that's $220,000 a year for that class. That's ridiculous.

Whomever comes forward asking for more should be smacked down hard and run out of office.

[FairOpinion]

They want more and more money "for the children" "for education", in the meantime we are already spending astronomical sums, and our schools are still some of the worst in the nation.

What we need is not "more money for schools" but discipline and a curriculum, which actually teaches kids.

The "for the children" mantra is just something the Dems are using to justify all their constant attempts at increased taxes.

[FairOpinion]

Buffet did suggest to Arnold that California should repeal Prop 13 and increase property taxes. Fortunately Arnold did NOT listen to him.

[DB]

Were giving home shooling a try this year...

[CounterCounterCulture]

[Oldexpat]

Looks like we may have to vote a couple times during our Nov visit to CA. Try and offset some of those IA votes.

[goldstategop]

The Press-Telegram also editorialized against the parcel tax. No one apart from Reed Hastings, seems thrilled with it. Its gonna go down to a landslide defeat in November. Sure people are told its only $50 a parcel but they're smart enough to know it won't end there. Besides, Californians are feeling overtaxed and are tired of having their wallets picked.

(No more Olmert! No more Kadima! No more Oslo! )

[Man50D]

Saying no to Prop. 88 maybe an effective short term solution but there is a long term solution currently before the House and Senate in the form of a bill known as The Fair Tax Act(H.R.25/S.25).

It will raise the same amount of state sales tax with a lower tax rate because the tax base will be broader than California's current tax system. Fair Tax FAQ #25 Consequently California maybe able to reduce or eliminate the property tax by keeping the sales tax rate at or near its current rate. More information about The Fair Tax can be found at Americans For Fair Taxation website.

[goldstategop]

Google Netflix founder Reed Hastings and fellow venture capitalist John Doerr. You'll find they were the brainchild behind Prop. 39, that made it easier to pass school bonds.

(No more Olmert! No more Kadima! No more Oslo! )

[Koblenz]

The state has had a huge windfall in property taxes with the run up of property values over the last few years.

Proposition 13 limits the assessment increases on property to 2% per year. When the property is sold, then the property is reassessed to the market rate.

This means that if you have two identical houses next door to each other, but one has been owned since 1978 and the other was purchased last year, property taxes on the two houses could be 10 or 20 times different.

Proposition 13, in the end, didn't really cut property taxes. It just shifted them to younger people and to people who can't, for whatever reason, stay in the same house forever (e.g., they are in the military, are transferred for work, etc).

I believe that Proposition 13, and any property tax reform that does not impose equal tax rates on identical properties, is totally unfair. Why reassess when the property is sold? How is this fair to young homeowners (of course, then the problem would be that there would be no new construction).

I'm all for low tax rates. For everyone. Not just for long-term homeowners.

[goldstategop]

Its not unfair to young homeowners... parents can transfer their home to the children or granchildren per Proposition 62 and the home is NOT reassessed. So the property tax will stay the same as long as the house is NOT sold. Prop. 13 does have a bias in favor of long-term home ownership - not that there's anything wrong with it. And as for equal property tax rates - that's a socialist notion that needs to be repudiated. Nothing in life is equal, including the amount of taxes owed. As long as the rules are clearly spelled out and the procedure is applied to every one on the same basis, it doesn't disturb me if some people pay more for their property and others pay less. They still save on their tax bill which they wouldn't if Prop. 13 weren't around.

(No more Olmert! No more Kadima! No more Oslo! )

[DB]

I disagree.

Prop 13 does more than limit the rate of increase to 2% per year. It also limits the state's share to 1% of the value of the property when sold. There are local overrides but they tend to be small. Typical total tax rate is between 1 and 1.4 percent.

On average people tend to move every 7 years or so. That brings the tax rate to current value soon enough for the state.

People who live on a fixed income and stay put aren't forced out of their homes because of property taxes. In the last 8 years property values here have more than doubled even though owners did nothing to further improve the property. The assessed value is just what it would be "worth" if they sold it.

How would you like to be taxed on the rising value of your stocks and bonds even though you didn't trade them in?

Just because the real estate market goes through wild gyrations doesn't mean people that simply continue to live on their property should go through the same chaos in taxes.

You say it punishes new buyers. Not really. Everyone was a new buyer at one time. It gives buyers a predictable future cost outlook which has a lot value in of itself. Take a fixed rate mortgage and you know what you can afford in the long term.

[Koblenz]

Its not unfair to young homeowners... parents can transfer their home to the children or granchildren per Proposition 62 and the home is NOT reassessed. So the property tax will stay the same as long as the house is NOT sold. Prop. 13 does have a bias in favor of long-term home ownership - not that there's anything wrong with it. And as for equal property tax rates - that's a socialist notion that needs to be repudiated. Nothing in life is equal, including the amount of taxes owed. As long as the rules are clearly spelled out and the procedure is applied to every one on the same basis, it doesn't disturb me if some people pay more for their property and others pay less. They still save on their tax bill which they wouldn't if Prop. 13 weren't around.

If you can keep it in the family. But if your parents are still alive and living in the house, and you need to buy a new house, you'll likely pay a lot more in property tax for a lot smaller house.

How is having equal property tax rates a socialist notion? Look, I'm for small government, but we need some government. Therefore, there need to be some taxes. Property, sales, income, hospitality, whatever. So if we decide to have property taxes, why do we fix some people's property taxes to be very low simply because they've been there a long time? How is this any different from rent control?

The people who save on prop 13 are the people who bought in a long time ago, to the detriment of the newer buyers. If you did away with Prop 13, the long-term owners would see their taxes rise, but the new homeowners would see their property taxes fall.

And if a place gets rid of rent control, then rents will certainly go up for those who lived under rent control. But they'd go down for everyone else.

If you decide that society should have property taxes, then tax everyone the same. If you think that property taxes are unfair, then eliminate them for everyone. But don't have the government play favorites by making taxes low for long term homeowners and high for newer homeowners.

Explain to me how prop 13 is different from rent control.

[Koblenz]

People who live on a fixed income and stay put aren't forced out of their homes because of property taxes. In the last 8 years property values here have more than doubled even though owners did nothing to further improve the property. The assessed value is just what it would be "worth" if they sold it.

So would you favor rent control as well so people on fixed incomes weren't forced out of their apartments because rents went up even though the properties weren't substantially improved?

[DB]

Get real.

We are talking taxes. Not private business transactions.

[goldstategop]

Prop. 13 restricts valuation increases to 2% a year and makes budgeting for property tax payments predictable regardless of whether you're a longtime homeowner or a new one. And it makes sure your property tax savings can't be made up by other forms of tax increases. Its not perfect but its helped thousands of people to keep their homes who otherwise might have lost them due to hyper-inflation and assessments beyond the ability of the property owner to pay for them. Every one's property taxes are kept much lower than the special interests and the politicians would like. Its not possible to charge every one the same amount without increasing it for some but over time, the disparities in what people pay will be lessened as people die, sell and buy homes here.

(No more Olmert! No more Kadima! No more Oslo! )