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Those commercial properties that bought decades ago should be paying current tax.
If you make businesses pay "current tax" on property without lowering the income/corporate tax then you will see a flood of businesses leave the state.
If you make businesses pay "current tax" on property without lowering the income/corporate tax then you will see a flood of businesses leave the state.
That is speculative. Many corporations that have their headquarters here are paying at the old rates- eg Chevron at San Ramon and quite a few down here in socal too. I doubted voters voted this in with them in mind.
States are flailing around because structurally we have undergone a sea change. Most of the people I know that lost jobs-around 30- lost the job to someone in India. The company is still here, just offshored entire divisions. I am not sure what the solution is for that, unless we become protective?
Texas which has been held up as an example is now falling on tough times too. They are facing down anywhere from 8-18 billion dollars in deficit. They can't even figure out the exact amount. I think the pain is spreading and sadly as a country we are like a luxury level hotel and today many other countries can more or less offer the same product at motel 6 prices. That is a major problem.
That is speculative. Many corporations that have their headquarters here are paying at the old rates- eg Chevron at San Ramon and quite a few down here in socal too.
I don't think its too speculative, this change would result in a much higher tax burden and would give businesses incentives to leave. This change would also flat out bankrupt a lot of businesses as well.
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Originally Posted by smh1
I am not sure what the solution is for that, unless we become protective?
There is no need for a solution as there is in reality no problem. Trade with India is largely balanced (not bilaterally though), as a result limiting out-sourcing would just be saving some jobs at the cost of others.
Texas is not immune to the recession, but they are doing much better than many other states. Texas is creating a lot more jobs than other states now as well. Texas was not always so business friendly though, rather it look a good look at itself and fixed its system.
It depends on who you target. Someone owning a 7/11 or a 4plex may decide this is too much. But for someone like Chevron making a couple of billions in net and big apt complex firms that have hundreds of apts, it is really not that much of a difference.
I worked in IT mostly, so most people who lost their jobs lost it to India. We don't do that much trade with India-but we are still at a big deficit and have been for a while-I wouldn't exactly call it balanced. Now with China that is a major problem. Today we have 40 million people on food stamps-I honestly do not consider that to be some great recovery. I am thinking all those auto workers and machinists and factory workers would much prefer to work than be in the current state. China is already ahead of us in renewable energy . I am still looking for the dotcom of this decade that can lift all boats. Absent that, I think we have a long, hard path ahead of us. Just look at the trade dispute we had with China. We slapped sanctions on tires and they slapped sanctions on chickens. So they are exporting tires and we are exporting chickens?? In high technology, China for the first time reached a surplus witht he US. Usually advanced countries sell advanced stuff and developing countries sell raw produce, low tech stuff, garments etc-it looks like the roles may be reversing.
Texas unemployment has actually gone up when compared to last year- a full percentage point. It is still lower than the nation and seems to have stabilized-as it has in many other states. But my point was, we have been in a budget mess for a while and have made a lot of painful cuts and continue to do so. They are just starting to deal with a massive budget deficit and in a few years, who knows, we may be out of this mess faster. Times change, in 1999, CA was the palce to be-who would have thought we would be here now.
Oregon's population is much smaller than California's and always has been.
Oregon is a state that has one big city/metro area, a couple of small cities, and the rest is rural. California has not been like that since the 1880s. (And even in Old West days California had a bigger population than Oregon)
The size of the California economy vs. that of the Oregon economy has NOTHING to do with the lack of a sales tax in Oregon. Oregon did increase their corporate income tax recently and it remains to be seen how that'll play out - that's certainly a departure from the practices of Oregon in the past. (If it doesn't play out well, no doubt Oregonians will blame it on Californians in the state.)
The Oregon reference is in response the a previous poster saying CA would be better with higher property tax and no sales tax...
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Wrong. The main defect with the property tax system in California prior to Prop 13 was that schools were funded via property taxes as opposed to through sales or income taxes. If California didn't fund its schools through property taxes then Prop 13 wouldn't have taken such a toll on California's schools.
Exactly... A big push for Prop 13 was exactly that reason... it was one thing to pay higher local taxes and have the money for local schools... in the 1976 Serrano v. Priest ruling, the California Supreme Court ordered that the state develop a more equal system for funding its K-12 school districts.
Proposition 13 was in response to local tax dollars leaving local schools
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There are always bad apples in government, and always will be.
I'm not aware of a single tax assessor jailed for corruption in office since Prop 13's passage...
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Prop 13 fans would also see "beauty" in Prop 13 bringing rent control to California and causing real estate bubbles. Both would have been better avoided. (Rent control is politically popular but economically insane - even Paul Krugman is opposed to it due to its blatant bias against the young, poor, and in many cases members of ethnic or racial minorities.)
I know all about rent control... my city has stringent rent control as do a number of Bay Area cities... it's already here.
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That's pretty much what California has now, and what has contributed to California's current troubles. Just because California was a Spanish colony, a great deal of its culture was influenced by Spain, and the Spanish language (albeit not in its European form) is widely spoken in California, does not mean that California should adapt Spain's taxation policies considering what condition Spain is in right now.
I was thinking specifically of Germany, Austria and Switzerland... countries where homes have traditionally been in families for hundreds of years... Property Tax is minor compared to the VAT tax... I'm not familiar with taxation in Spain.
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It only would work, MAYBE, if the corporate income tax was reduced and property taxes jacked up - the latter is exactly what you don't want. Without Prop 13 more Californians could actually afford to stay in California. It's easy to forget, because California has been so devastated by the economic crisis and the aftermath of the real estate bubble of the previous decade, that the bubble did have very harmful effects on the quality of life in California.
I personally know neighbors that moved in the 70's because of high property taxes... I also know people, such as my neighbors that stay mostly because of Prop 13... I choose to buy in the neighborhood because of my great neighbors... some built in the 1950's and are still living in their homes
The Oregon reference is in response the a previous poster saying CA would be better with higher property tax and no sales tax...
I would agree.
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I'm not aware of a single tax assessor jailed for corruption in office since Prop 13's passage...
Laxity in prosecution?
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I know all about rent control... my city has stringent rent control as do a number of Bay Area cities... it's already here.
And it's been here since Proposition 13, due to many people being convinced to vote for 13 on the false promise of lower rents which never occurred.
Before Prop 13 there was NO rent control anywhere in California.
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I was thinking specifically of Germany, Austria and Switzerland... countries where homes have traditionally been in families for hundreds of years.Property Tax is minor compared to the VAT tax... I'm not familiar with taxation in Spain.
Exactly the same.
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I personally know neighbors that moved in the 70's because of high property taxes... I also know people, such as my neighbors that stay mostly because of Prop 13... I choose to buy in the neighborhood because of my great neighbors... some built in the 1950's and are still living in their homes
The number of people who have lived in the same property since the 1950s or for that matter the 1970s is continually shrinking.
That is speculative. Many corporations that have their headquarters here are paying at the old rates- eg Chevron at San Ramon and quite a few down here in socal too. I doubted voters voted this in with them in mind.
States are flailing around because structurally we have undergone a sea change. Most of the people I know that lost jobs-around 30- lost the job to someone in India. The company is still here, just offshored entire divisions. I am not sure what the solution is for that, unless we become protective?
Texas which has been held up as an example is now falling on tough times too. They are facing down anywhere from 8-18 billion dollars in deficit. They can't even figure out the exact amount. I think the pain is spreading and sadly as a country we are like a luxury level hotel and today many other countries can more or less offer the same product at motel 6 prices. That is a major problem.
Keep in mind Texas figures are two year figures - because that's how long the budget covers. And not knowing the exact amount is not a challenge - it all depends on revenue forecasts. And who knows te exact amount of revenue for two years?
8B or 16B is a lot less than 46B. Who do you think will handle the deficit better - Texas or California? Please be honest.
Then keep the system and just raise the tax rate and increase the max annual increase to around 5% (keep 2% for retirees).
I would love to get a 5% bump each year... for the last 3 years... wages and rents have been flat... 5% FDIC returns do not exist. Raising Property Tax rates is inflationary.
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Its a bit hard to claim that higher property taxes and lower income taxes would cause problems as this is exactly what is done in Texas and its working very well. Some aspects of Prop 13 are just subsidies for real estate interests. Considering you are part of this group, its not surprising you always speak against about fixing things. And using the European model? You must like poverty.
I've worked in Germany and Austria my first job after graduation... I can honestly say that poverty was no where to be found... part of the reason is people didn't have the fixation to save... they were more concerned planning their 5 weeks summer holiday then any property tax bill... homes are traditionally handed down generation to generation... people invest in their homes for the long run... it's amazing what people will pay for quality and energy efficiency when they are in it for the long term.
By the way, I've never held a Real Estate License in any State... I have been involved with construction and management. Could you expand on Subsidies for Real Estate Interests? I know my city has programs to subsidize police, fire and teachers with buying homes.
I had long discussions about differences between the US and Austria with collegues... at the time, a new car was taxed at 30%, most items 20% and food 10%... people that owned property worth a million dollars paid about $1500 in property tax... basically it was to maintain local roads, winter plowing, fire and police.
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If California does not fix the structural problems in the tax system , then the free markets will. The markets will turn California into Michigan and then Prop 13 won't matter much, all but the coastal properties will be worth little.
For some, I'm sure they will see it as a good thing... City-Data has many posts about the high cost of living in CA and Real Estate often tops the list.
Might look into some coastal property... it would be hard to leave Oakland though
And it's been here since Proposition 13, due to many people being convinced to vote for 13 on the false promise of lower rents which never occurred.
Not true, both my great aunt that lived in Centerville and my High School History teacher both were pleasantly surprised to see their rents decrease due to prop 13.
My teacher actually had us cover the election in class. He asked his landlord if his rent would go down if Prop 13 passed and the landlord said yes and it did... I can't believe these are the only two renters that enjoyed rent reductions?
Keep in mind Texas figures are two year figures - because that's how long the budget covers. And not knowing the exact amount is not a challenge - it all depends on revenue forecasts. And who knows te exact amount of revenue for two years?
8B or 16B is a lot less than 46B. Who do you think will handle the deficit better - Texas or California? Please be honest.
CA is defnitely in a lot worse shape than TX. I will not argue with you there. But what I am saying is, till last year, TX was supposed to have a surplus and a model for everyone. Now out of the blue you have massive deficit. This is just starting there.
CA on the other hand has been in the thick of this budget mess. We have been making massive cuts in every imaginable category. Nothing is off limit. I think if this continues, next will probably be state pensions and salary. In the old days, private employees made more money-now it is pretty much equal or even less than govt employees. We are cutting the fat and working through it.
TX is just starting. When our mess started, nobody believed it would end up this bad. But here we are and we will probably emerge much leaner and nimbler out of this. But we are probably midway through this cycle and everything is a cycle. I was in the bay area when a company close to me offered BMWs for all of its employees. Now the jobs are going to India! These things come and go. But TX looks to be just starting down the deficit hole and it will be another year or more before we discover how they end up.
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