Posted on 09/02/2018 9:37:39 AM PDT by SeekAndFind
Eight hundred fifty thousand signatures have been gathered in California in support of a voter initiative that would supposedly increase property taxes by 2020 for commercial and industrial properties to get around Proposition 13 property tax protections. The initiative would leave small business and residential properties alone. It is called the California Schools and Local Communities Funding Act. But raising property taxes on leased commercial properties would result in lower tax revenues.
What Is Split-Roll Property Tax?
A split roll tax means applying a tax formula for commercial and industrial properties different from the formula applied for residential properties. The tax roll is an official breakdown or list of all the properties to be taxed.
California Proposition 13 protects property-owners from very high or very low re-assessed property values each year by increasing the base value of a property by not-to-exceed 2% per year for inflation. The market value of properties is taxed at a 1% base tax rate and is re-assessed upon re-sale, not each year. Activists want the reassessments pegged to market value appreciation not a fixed 2% each year.
Existing:
Base Market Value: $2,000,000
Base Tax @1%: $20,000/year
Annual Adjustment @2%: $20,400 – 1st year
Annual Adjustment @2%: $20,808 – 2nd year
Income Property Markets Work Inversely to Taxes
Most policy-makers think higher tax rates result in greater tax revenues. But income-producing property markets work inversely by lowering property values when taxes are increased. This market adjustment process is called by the term "tax capitalization," which means converting the net income of a commercial property into a higher or lower value depending on the change in net income.
Split Roll Added Tax Estimate Omitted "Tax Capitalization"
The California Legislative Analyst (LAO) has forecast that a split roll property tax would generate $10 billion annually in net additional taxes.
(Excerpt) Read more at americanthinker.com ...
the courts are consistent about taxing authority. Cal got a kick in the ass when they tried to tax retirements of retirees who had moved to other non-income tax state.
If they want to tax corporate real estate only, then they should tax real estate the corporation relies on in other jurisdictions. That way they can avoid having a California company move out of California to some place else.
That will still give the exact same level of incentive to leave California for another state.
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“Anything to feed the voracious appetite of the pie in the skyillegal alien friendly politicians of California”
Little tweak
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Umm, you left out the “Gimme, gimme” electorate as well (both sides of the aisle there too)
This is so much BS. Calif got around Prop 13 years ago. In addition to the property tax, any time they wanted more funds, they just put special assessments on but kept the property tax the same. Those assessments would have been in the property tax if not for Prop 13, but they still got the funds. When I finally got rid of my property in Calif, the assessments equaled or exceeded the property tax. If you don’t give Dems what they want above board, they do sneaky shit to get it anyway. And you see that perfectly in the Socialist Republic of California. If you want to see what Dems will do to the country next time they are in charge, just look at the loony California politicians and the state of California.
I don’t think California schools deserve a single penny from anyone. They piss away money like it grows on trees. They’ve turned the schools into ignorance mills.
Irresponsible, incompetent liberal buffoons are in charge of Cal govt and it’s schools. That’s why both are bound to fail.
Democrats have only 2 solutions to everything: 1. More laws restricting freedom and rights. 2. Raising taxes.
Tax, tax, tax... Is that all the Califonica liberal legislators do all day?
Raising taxes is not the answer to every financial problem. It’s a juggling act with too many clowns. Too many programs, not enough money, so cut some government programs and let the private sector and the bean counters loose.
Sell some bonds if anybody has any money left to invest after paying their taxes. Con some outsiders to “Invest in California”. Reduce the debt.
Learn how to manage, not control people.
Another venue for tax reform for flat taxes that would have zero to do with “assessed” or “market” values and would not rise or fall merely because market values changed.
If local costs actually increased, that, not “market” or “assessed” values would be a cause for considering a tax increase, but every single such increase should be agreed to by a majority of local property tax payers (not merely if a majority of those voting approve). If it was not approved, localities would have to lower costs, with no escape from that.
“Eight hundred fifty thousand signatures have been gathered in California in support of a voter initiative that would supposedly increase property taxes by 2020 for commercial and industrial properties...”
Great....just let the state own a whole bunch of non-productive empty buildings.
Just a complicated way of seizing more and more of private property and the means of production, as communists like to do.
L-O-V-E that tag line..
When I moved out of NYC to NJ, which then had Republican governors and no income tax, Ed Koch’s NYC tried to tax me on income that I’d earned in NYC. The courts, even in 1972 or a bit later, shut that down pretty fast. I’m sorry I don’t know the legal history. It would be interesting and possibly required reading for residents of states such as NY, NJ, CT, et al run by enemies...domestic.
Cal was taxing retirees and withholding state income tax. Don’t know the year of the court case. Many Californians moved to Henderson NV outside Vegas when they retired. Some joined together and brought a court case.
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