Will California Become America's First Failed State?

I once dated a liberal.

hehe, I probably did too, but that was long ago and far away and I wasn't thinking about politics

The only difference between the rich Hollywood liberals evading taxes and the rich Business-leader conservatives evading taxes is this:

The Hollywood liberals get flamed for speaking their opinions on politics and often resort to low-budget youtube videos to spread their message.

The Business-leader conservatives merely pay lobbyists to enact their opinions on politics.

Prop 13 was a ballot initiative in 1977 that became law.

It was promoted to avoid increasing property values leaving retirees unable to stay in their homes. Except for additions and other improvements property taxes increase very little.

When people sell their home or die the property is reassessed.

But when a corporation is sold there is no reassessment. The new owner continues to pay little more than 1977 property tax rates.

Prop 13 also changed the law so it takes a 2/3 vote to raise state and local taxes.

http://www.time.com/time/nation/article/0,8599,1904938,00.html

http://en.wikipedia.org/wiki/California_Proposition_13_(1978)

My point was that Prop 13 is the intellectual grandfather of TABOR. The antitaxism that prop 13 represents has also crippled the ability of California government to raise the revenues to pay for the programs that have been passed through I&R.

http://www.thenation.com/doc/20030901/scheer0819

Property taxes are regressive. The tax impact falls disproportionately on the working/middle class. Initiative and referendum has paralyzed state government through the competing demands of increased services and cutting taxes.....The problems need to be addressed through a combination of revenue increases and targeted spending freezes.....

http://www.thenation.com/doc/20090323/king

As education goes so goes the economy of a state...

Southern California, the high cost of low living....

Truth is, if every celeb paid twice their state income tax, california would be in the same predicament. The various recalls of governors, corrupt state legislators, a state being geographically two large, and generous social entitlement programs are largely the reason California is having a problem.

California was/is also right smack dab in the middle of numerous bubbles, housing, healthcare, tech...We have taken a blow with each bubble that has of course burst. The entertainment industry is suffering hard right now. I just became a card-carrying member of SAG to see production cut, ancillary business that supports the entertainment industry going under.... the problems here are just like everywhere else but with a significantly higher population...

Anyone who owns a home, maintains day-to-day living in the Golden State pays their taxes... And boy are we taxed. I am very saddened by the fiscal situation of this wonderful state and hope that we can pull ourselves out of it.

Leslie, you are right, domestic aid should be on the agenda. Specifically, aid to schools. My daughter's school always has their hand out asking for things for the classroom, however, children do not have to furnish their own school supplies, the state does!

I certainly can't speak for the rest of California because it is expansive, however, in Los Angeles, the unemployment situation is horrible and obviously, with high unemployment, less tax revenue is generated and the state falls further into the hole.

California and it's taxpayers saddled themselves with this huge debt by voting in expensive programs that we do not need to be funding.

Regardless of Prop 13 . . which was an attempt to get us to try to live within our means . . voters since then did this by voting "YES" to more spending. By voting for politicians who want to spend more than we earn.

Unfortunately we rural conservative folks are outnumbered by the more liberal city folks on the coast.

Just stop spending money we don't have on extravagant stuff that the government should not be involved with and focus on the important things.

It is no wonder there is an anti-tax attitude out there. We just keep spending ourselves into more and more debt and the answer is . . . . more taxes.

That is so stupid.


steph

Can you explain how Prop 13 was an attempt to get us to try to live within our means?

It prevnted property taxes from increasing with assessed value.
Howard Jarvis promoted it as a way to allow senior to stay in their homes.
When a home is sold it is reassessed and the taxes are significantly higher. (except for recent years)

But 57 percent of benefits go to owners of commercial and industrial property. When a business is sold the corporation or owner of the DBA, not the new owner, is considered the owner so taxes don't go up.

Businesses and corporations pay very little on VERY valuable property because they pay based on 1978 property value rather than the value when the property was sold.

HOW was that law meant to get the people to live within their means?

OLD article just a decade after prop 13 - http://www.nytimes.com/1988/06/17/op...sition-13.html

From the LA Times (not Fox) and on my birthday!

http://articles.latimes.com/2009/jul/09/opinion/oe-fox9
.
Proposition 13 isn't the problem


When times get tough, the property tax measure comes under attack, but it's no boogeyman.


By Joel Fox|July 09, 2009
"The "Blame 13" chorus is at it again. You can always count on it to sing "It's all Proposition 13's fault" during difficult economic times. The story has gone national, with columns in Time magazine and the New York Times taking shots at Proposition 13. The attacks are probably best summed up by an editorial cartoon picturing Proposition 13 as the beginning of the end for California civilization."

"Let's get the facts straight. Despite the cap instituted by Proposition 13, property taxes have increased dramatically in California. According to Board of Equalization data, property tax revenue has increased 800% since the measure passed in 1978 -- from $5.6 billion a year to $50 billion. Compare that with general fund revenue -- made up largely of sales, income and corporate taxes -- which has increased 500% over the same period.. . . ."


. . ."(Proposition 13 is often mistakenly charged with the requirement of a two-thirds vote in the Legislature to pass the state budget. Not true. That requirement took root during the Depression.)" . . . .


"Of course, businesses, where they can, will pass tax increases on to consumers through higher prices, to tenants through raised rents or to employees through lower wages. Passing through the tax is an important notion to understand, especially for those who rally around a split-roll proposal in hopes of sticking a tax to big business. But it's small businesses that would be hurt the most. Many live on close margins, and a tax increase would be a considerable burden. . . ."


"Further, business property owners do not enjoy a break over homeowners under Proposition 13, as some have charged. The Hamm study, using Board of Equalization data, found that owner-occupied residential property is assessed at 53% of the current market value; at 60%, commercial/industrial property is assessed closer to the higher current market value.. . . ."




Also:


http://www.caltax.org/research/prop13/prop13.htm


. . ."This research bulletin, the first in an occasional Cal-Tax series on public finance issues, examines California's property tax system. It highlights the strengths of acquisition-value assessments and projects the ramifications of possible changes to the system established by Proposition 13.. . ."


Predictability for Taxpayers

One of the major arguments used by the campaign in support of Proposition 13 in 1978 was that it would give taxpayers predictable property taxes. This argument was also well received by the court in Nordlinger v. Hahn and in earlier cases dealing with the issue of acquisition-value assessment. In general, the predictability argument for taxpayers is as follows: Taxpayers are protected under an acquisition-value assessment system with the certainty that the property tax burden will grow no faster than two percent per year. Thus property owners can know precisely how much the property tax liability will be at the time of purchase and at any time in the future.
This contrasts dramatically to a market-value ad valorem system where taxpayers can be taxed on the paper gain in the value of property. Prior to Proposition 13, this had the impact of doubling and quadrupling the property tax burden of homeowners very quickly due to unrealized appreciation in the value of their property.




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If the government is kept from unfairly raising taxes - it will be forced to live within it's means or unfortunately spend us into oblivion as it is doing now. But part of that is Californians fault.



If Californians continue to vote in "tax and spend" politicians (of either party) . . . and continue to pass propositions that are costly and wasteful and wrong . . .then, we sorta made our own bed.




steph