Death, taxes and Proposition 13 – Orange County Register

To: California Association of Realtors

Re: Death and Taxes

Yes, all Californians eventually will die.

But why can’t our property tax discounts live forever?

That question was inspired by your glorious new ballot initiative to make our state’s Proposition 13 property tax savings even more generous.

Your “People’s Initiative to Protect Prop. 13 Savings” is as Californian as the Golden Gate Bridge and reminds us of an undeniable reality:  Limiting property taxes is the fundamental organizing principle of postmodern California.

Under our Prop. 13 regime, the taxable value of every California home was set in 1975, or at whatever subsequent date Californians first bought their houses. From that original base, the assessed value of a home cannot increase by more than two percent annually – no matter how much the actual value goes up.

In this way, Prop. 13 provided homeowners with an ever-escalating discount on property taxes as the value of their homes rose. And groups like yours have made this subsidy the best-protected piece of our state’s finance system. Californians will cut school funding or raise income or sales taxes, but Prop. 13 tax savings are untouchable.

But something as fundamental as Prop. 13 can always use more protection. So your new initiative shores up a fundamental weakness: Homeowners don’t get to keep their low property taxes forever. Tragically, they lose their human right to that discounted tax assessment once they sell their property and move on to a new home.

Fortunately, your initiative would end this outrage.

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