Who Wins With Prop 13?

This article about effects of Prop 13 has been getting sent around.  It’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 – not enough revenues.  But California is the single largest taxing state – generating $98B annually from taxes for a mere 37million inhabitants.  On a per-capita basis, California isn’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 I’m thankful for Prop 13.  We need more laws which prevent the state from taking money it doesn’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 bracket” 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 haven’t even mentioned California’s business-unfriendly tax rates.  Just trying to start a business in California costs thousands of dollars.  Why?  Don’t we want more business and jobs here?  It’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 don’t think so.

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