From: mike@gordian.com (Michael A. Thomas)
Subject: Re: Prop. 13 and California's fiscal crisis
Organization: Gordian; Costa Mesa, CA
Distribution: ca
Date: Wed, 12 Aug 1992 17:21:21 GMT

In article <183031@pyramid.pyramid.com>, rtener@pyrman2.mis.pyramid.com (Rex Tener) writes:
> In article mike@gordian.com (Michael A. Thomas) writes:
> >In article dbailey@wk49.nas.nasa.gov (David H. Bailey) writes:
> >> 2. Large, established corporations are the principal beneficiaries of
> >> Prop. 13, since their property seldom, if ever, changes hands.  This
> >> provides them with a competitive edge against young, aggressive
> >> entrepreneurs, who often have the impertience to offer better service
> >> at lower prices.
> >
> >  It seems from my vantage point that most small entrepreneurs *lease*
> >the office space they need. If they lease it from one of your "established
> >corporations" the advantage doesn't wash.
> 
> Do you think "established corporations" lease office space any cheaper
> than a developer that built office space last year?   Are you implying
> that large "established corporations" rent office space for cost.
> The advantage does wash.

  In this market? YES. Commercial real estate is the pits these days,
and is likely to stay that way for a number of years. Many of these
corporations are leasing office space *below* cost, just to have
somebody in the building to satisfy the banks (and hopefully make
it up in the long run). 

> >are these people? I've heard that people move on the order of once
> >every five years. If this is true, on average, the state should only
> >lag about 5 years behind current valuation of the property.
> 
> This isn't true for California's property owners.  People stay in their
> homes to keep their tax advantage.  Prop. 13 distorts the housing market.

  I would like to see some facts and figures which back up that assertion.
   
> >> 4. Among households in the SF-Oakland area with incomes over $100,000,
> >> fully 52% pay less than $150 per month in property tax, although their
> >> homes are typically worth over $400,000.
> >
> >  Fine. Let's eliminate property tax altogether and move to a user fee
> >system. You want gold plated sewers, you pay for them.
> 
> If their is any group of people in Califonia that can afford to pay taxes,
> it's property owners.  How are you going to pay for the schools?
> User fees?

  Yes, that would be perfectly reasonable.  While we are at it, we should
eliminate the state monopoly on education. As a transition to a fully
free market for schools, we could give low income families subsidies
(in whatever form) to attend school (generally I would favor tax
credits, but this is another story).

> >  Oh joy. You are obviously having problems comprehending the difference
> >between lower taxes and *deferred* taxes. Sooner or later you have to
> >pay. I expect that most folks would prefer not to stick their heirs
> >with a giant tax bill.
> 
> Are you saying that cumlative property taxes will be larger than the
> estate in more than 1% of the cases?

  Tax deferred != Not Taxed. Why is this concept so hard to grasp?
Do you believe in 100% inheritance taxes too?

> The problem is an unfair property tax system.  Why do you assume
> that fair property taxes == more revenue?  A fair property tax system
> and how much money the state should spend are two different debates.

  You show me a proposal which is fair and does not increase the 
taxes for the unscrewed people today, and I will consider it.
-- 

		Michael Thomas	(mike@gordian.com)
	"I don't think Bambi Eyes will get you that flame thrower..."  
		-- Hobbes to Calvin
		USnail: 20361 Irvine Ave Santa Ana Heights, Ca,	92707-5637
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