California - You Made Your Own Fiscal Mess (San Francisco, Sacramento: sales, condo)

[CAVA1990]

So why aren't you folks doing something about the fact that because of Prop. 13, passed 30 years ago, you're undertaxing the wealthy old time property owners and passing the burden on to everyone else? The UC tuition increase is symptomatic of the boom/bust situation that arises when you rely on income and sales taxes, which are more volatile and subject to economic ups and downs, instead of more stable property taxes. My sister who's owned a multi-million dollar coastal home for the past 35 years pays less in property tax than someone who bought a small condo in the last few years in the Inland Empire. No coincidence that the states struggling the most in this economy are the ones with property tax caps for old-timers (Florida's another).

[cobmw]

I think you have a future in politics - perhaps in our state legislature. You see the answer to California's fiscal mess coming from more taxes. Californians are certainly not undertaxed. A better answer to California's mess would be to promote job creation. Cut taxes, sunset laws and cut regulations. Let people do the great work that they are capable of when government is off their back. Then you will see an end to the fiscal mess.

[malamute]

Originally Posted by CAVA1990

So why aren't you folks doing something about the fact that because of Prop. 13, passed 30 years ago, you're undertaxing the wealthy old time property owners and passing the burden on to everyone else? The UC tuition increase is symptomatic of the boom/bust situation that arises when you rely on income and sales taxes, which are more volatile and subject to economic ups and downs, instead of more stable property taxes. My sister who's owned a multi-million dollar coastal home for the past 35 years pays less in property tax than someone who bought a small condo in the last few years in the Inland Empire. No coincidence that the states struggling the most in this economy are the ones with property tax caps for old-timers (Florida's another).

Part of the problem with your plan is that you didn't notice that many middle class taxpayers are fleeing the state. Why would they just accept more of their hard earned money being robbed from them when they can go elsewhere? You have many people moving into California who need government handouts and you have those that pay for everything leaving.

You can't just keep heaping on the taxes and force more people to leave. It's time to cut back on some of the giveaways.

[humboldtrat]

That's right, blame it all on Prop 13. It's only been around 31 years so how come all of a sudden does Prop 13 become the problem? Never mind that California has the 6th highest tax burden in the US. How do the 44 other states get by with less - some of those states have no income tax or no state sales tax? And many other states have a lower unemployment rate than CA (OK, maybe not by much). Maybe the problem is in Sacramento.

BTW, I read that San Francisco has a $6.5 BILLION budget - bigger than that of 20 other states and is still about $500 million in the hole. Where does all that money go ? It sure doesn't go into fixing pot holes, keeping the streets clean, getting public transit to run on time or for a first rate public education system.

[FresnoFacts]

While you can argue that property taxes might be more stable, every state also has its sacred tax cow.

And reducing reliance on volatile revenues like sales or income taxes is not the answer either.

**Nevada has no state income tax and almost a 40% budget gap .
**Oregon has no sales tax and nearly a 20% state budget deficit.
**etc.

Everyone is convinced that their tax way is the best, but nearly all seem to run into problems at some time.

Ultimately it comes down to simply balancing spending and revenue.

[mysticaltyger]

Originally Posted by CAVA1990

So why aren't you folks doing something about the fact that because of Prop. 13, passed 30 years ago, you're undertaxing the wealthy old time property owners and passing the burden on to everyone else? The UC tuition increase is symptomatic of the boom/bust situation that arises when you rely on income and sales taxes, which are more volatile and subject to economic ups and downs, instead of more stable property taxes. My sister who's owned a multi-million dollar coastal home for the past 35 years pays less in property tax than someone who bought a small condo in the last few years in the Inland Empire. No coincidence that the states struggling the most in this economy are the ones with property tax caps for old-timers (Florida's another).

The whole Prop 13 thing is just an excuse. People who bring this issue up always neglect to mention that California is still one of the highest taxed states in the nation.

As a share of peoples' incomes, California has been in the top 10 states for taxes for most of the last 30 years. Clearly, California found other ways to increase taxes after Prop 13 was passed.

The Tax Foundation - State and Local Tax Burdens: All Years, One State, 1977-2008

I think your post is typical of what we see in America today. We think "if only there were more money, it would fix all the problems". Instead, I propose the state and nation as a whole need to better manage the money/resources it already has. That goes for individuals as well as government.

I will agree with your headline, though. We did, indeed, make our own fiscal mess. But it was mostly because of overspending, not because of undertaxing.

[18Montclair]

Prop 13 may have passed, but I still pay what I consider to be a lot-$40K last year. Its the ones who bought homes a long time ago that pay much, much less.

[Steve97415]

Originally Posted by cobmw

I think you have a future in politics - perhaps in our state legislature. You see the answer to California's fiscal mess coming from more taxes. Californians are certainly not undertaxed. A better answer to California's mess would be to promote job creation. Cut taxes, sunset laws and cut regulations. Let people do the great work that they are capable of when government is off their back. Then you will see an end to the fiscal mess.

This represents the typical mentality of conservatives. The issue of fair tax distribution, which is what the OP brought up, is an important aspect of revenue policy. But it seems to be too nuanced for conservatives, who are only able to think of taxes in a MORE/LESS framework. For years the tax burden has been shifting from the rich to the middle class. It isn't that more taxes are being paid, it's that there's been a major shift in who's paying most of them.

Oh, I know, I know...we need to give wealthy people low taxes so that they have more loot to squirrel away in offshore bank acc....whoops!...I mean so that they can create jobs. Whew...that was close!...almost revealed the truth there.

[malamute]

Originally Posted by CAVA1990

So why aren't you folks doing something about the fact that because of Prop. 13, passed 30 years ago, you're undertaxing the wealthy old time property owners and passing the burden on to everyone else? The UC tuition increase is symptomatic of the boom/bust situation that arises when you rely on income and sales taxes, which are more volatile and subject to economic ups and downs, instead of more stable property taxes. My sister who's owned a multi-million dollar coastal home for the past 35 years pays less in property tax than someone who bought a small condo in the last few years in the Inland Empire. No coincidence that the states struggling the most in this economy are the ones with property tax caps for old-timers (Florida's another).

However -- was her coastal home a multi-million dollar one 35 years ago? Often someone paid less 35 years ago for the nice house than someone today is paying for a condo but they bought an affordable home with affordable taxes. Is it fair to raise the value of the home and make the taxes far more than they can afford years down the road?

At least the person buying the condo today can check out the tax rates for it and make a decision if he can afford it or not but Prop 13 makes it fair for those people who bought houses they could afford in the past by keeping them affordable.

Proposition 13 was a very good one because often it's not your fault if you buy a nice affordable place and suddenly they want to tax it like it was hundreds of thousands dollars more.

[MisterDuke]

Prop 13 is a joke. My parents bought a mobile home in a senior park a few years ago. All the land under the park belongs to a corporation and has never changed hands since passage of 13. They pay a total of $18 A YEAR in property taxes. And that's on par with the other 120 properties in the park. That is an out and out steal of public services. The seniors use a disproportionate amount of government services... medical, police, fire, libraries.... far more than that measly $18 they pay into the system.