California Proposition 13

Great Debates
21

There is new documentary out called The First Angry Man that explores the campaign, passage and impact of Proposition 13 (mostly from the negative side of things). It’s interesting in that most folks in power opposed to it, even only a handful of Republicans (including Reagan) backed it. Most politicians, most big business and the CA Chamber of Commerce opposed it. But it passed overwhelmingly as a populist anti-tax revolt.

While it may have saved grandma from having to sell her home in Laurel Canyon in the 1980’s, almost two generations later it is having a corrosive effect on the haves and have-nots. Witness this little unintended consequence of massively profitable rentals.

22

Yes it is killing you. In effect you are subsidizing people who bought houses much earlier than you did.

Let me throw out another possibility. Allow long time residents to defer their tax liabilities until they sell (or die). Something like an interest bearing lien. If property values have risen that much, they will still profit when they sell.

23

What do the city and state rely on for tax revenue in the meantime, if you’re allowing people to defer their property tax liability?