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.
Your proposal would allow anyone over 55 to sell their California house and carry those same low property taxes to their next home, no matter the new home’s market value, or its location in the state, or the number of moves they make. Your tax savings no longer follow just your house – they follow you.
This historic change would represent a new birth of freedom. Prop 13 only protected older homeowners from being forced out of their homes by rising property taxes. Your Son-of-Prop-13 also defends the very opposite freedom; it mercifully frees older homeowners who might feel trapped in their homes by their own unwillingness to surrender those property tax savings.
If your initiative passes, longtime homeowners will finally be free – to sell their homes at the huge profit they’ve run up over the years, without losing their property tax discount in the process. Hallelujah!
(Yes, this would create more…