This article about effects of Prop 13 has been getting sent around. Itâ€™s worth reading and highlights a case which most people think is unfair. I agree, Prop 13 is completely unfair. But would I change it? Absolutely not!
The premise underlying the article is that somehow California has a top-line problem â€“ not enough revenues. But California is the single largest taxing state â€“ generating $98B annually from taxes for a mere 37million inhabitants. On a per-capita basis, California isnâ€™t the most taxing (ranking #10), but our large size should offer economies of scale for infrastructure, right. Unfortunately, California is so mismanaged that it offers no such efficiencies.
So Iâ€™m thankful for Prop 13. We need more laws which prevent the state from taking money it doesnâ€™t need. The crisis in California is not caused by failure to tax enough. Forbes ranks California as the most taxing state second only to Hawaii (is it a surprise that it costs more to live in a tiny, tropical state hundreds of miles off the coast from any other state?). But while Hawaii gets the "highest bracketâ€ award, that only kicks in when you make $200K/yr. California taxes any earner making more than $47K at 9.55%. If we ranked states on highest income tax for those making $50K/yr, California is far-and-away #1.
And I havenâ€™t even mentioned Californiaâ€™s business-unfriendly tax rates. Just trying to start a business in California costs thousands of dollars. Why? Donâ€™t we want more business and jobs here? Itâ€™s insane.
Bottom line: Fix the California spending problem, not the California income problem. Cut all spending, across the board, by 60%. Would anything bad really happen? I donâ€™t think so.