California May Abandon Business-Friendly Tax Law

Don’t tax you,

Don’t tax me,

Tax that fellow behind the tree.

In California it’s beginning to look like the tree-concealed victim is the business community. And soaking the business community will require voters to repeal the only tax advantage California has when compared to the rest of the nation.

Here’s the background. In 1978, Howard Jarvis, a hero of the taxpayer, was behind passage of the Proposition 13 referendum. Prop. 13, as it’s called, put a permanent leash on California’s legacy-building taxing class. Instead of either raising property taxes each year, or letting inflation do the work for them, politicians were limited to a maximum yearly property tax increase of either 2 percent or the rate of inflation, whichever was lower, based on the initial purchase price of the property, not its current market value.

Any time the property was sold, the tax base reset to the new market price and then stayed there until the property was sold again.

Now a Los Angeles Times poll has some starting results for California businesses. A 54 percent majority of registered voters is in favor of repealing Prop. 13’s protection against “unlimited increases for industrial and commercial [property] owners.”

If voters do repeal Prop. 13 the state’s business recruiters are going to be limited to the weather as a selling point for potential investors.

Here’s what repeal would mean to California politicians, according to a story in Breitbart. Currently California collects $60 billion per year in business property tax. Repealing Prop. 13 would mean Sacramento’s taxers could squeeze another $6.5 to 10.5 billion out of business property owners. What’s more, I’ll be they can find a way to spend every penny and more!

Breaking down support for repeal by party gave the expected results. Democrats, the party of takers, favored repeal by 64 percent, while Republicans opposed repeal by about 66 percent. Democrats support a massive increase in business property tax because they think they won’t be paying the bill.

Their support for taxes drops precipitously when they are getting the bill. Democrats are the majority of the 51 percent in the poll who want to roll back the recent 12-cent-per-gallon gas tax that was imposed on them in 2017.

Democrats will soon learn they will suffer from the repercussions if Prop. 13 for business is repealed. There will be fewer new jobs, fewer pay raises, higher prices, and less opportunity as more businesses join the exodus out of state. Businesses aren’t charity. If their taxes go up the cost is passed along to employees and customers.

The economic illiterates in Sacramento don’t know that and their government jobs provide a soft cushion, protecting the political class from its own incompetence. Taxpayers, on all sides of the tree, don’t have that protection.

Michael Reagan, the eldest son of President Reagan, is a Newsmax TV analyst. A syndicated columnist and author, he chairs The Reagan Legacy Foundation. Michael is an in-demand speaker with Premiere speaker’s bureau. Read more reports from Michael Reagan — Go Here Now.

Michael R. Shannon is a commentator, researcher for the League of American Voters, and an award-winning political and advertising consultant with nationwide and international experience. He is author of "Conservative Christian’s Guidebook for Living in Secular Times (Now with added humor!)." Read more of Michael Shannon's reports — Go Here Now.