The question of whether California should abolish property taxes almost seems absurd. Our state, like all other states, has had some form of property tax since its founding.<\/p>\n
However, it would be foolish to discount a growing national debate questioning the very existence of annual taxes on real estate. This is especially true now that taxpayers are being targeted by progressives with \u201cwealth taxes.\u201d People may not realize that property taxes are, in fact, a form of wealth tax.\u00a0<\/p>\n
National media stories appear almost daily about taxpayers\u2019 anger over ever increasing levies on their homes. According to real estate journalist, Allaire Conte, writing in RealEstate.com, \u201cThe simmering frustration of 2024 and 2025 has boiled over into a full-scale\u00a0property tax revolt in 2026, with no fewer than 13 states actively weighing proposals to\u00a0eliminate property taxes in some form.\u201d\u00a0<\/p>\n
For example, in Florida, Gov.\u00a0Ron DeSantis\u00a0has called property taxes an \u201coppressive and ineffective form of taxation\u201d citing the most common complaint from homeowners that they shouldn\u2019t have to pay rent to the government. Georgia has targeted 2032 for complete elimination and North Dakota has moved the most aggressively because it has large state oil tax revenues that allows it to finance a generous homeowners tax credit.\u00a0\u00a0<\/p>\n
As noted above, property taxes are wealth taxes. The \u201cincidence\u201d of the tax is not a financial transaction like receiving a paycheck, dividend, realizing a capital gain or a sales transaction.\u00a0 The incidence is the mere possession of one form of wealth \u2013 real estate \u2013 on a single day \u2013 called the lien date \u2013 of the calendar year: In California, the lien date is January 1st.<\/p>\n
Despite the national angst over property taxes, few political leaders or citizens are advocating their immediate elimination. Even in conservative North Dakota, a 2024 initiative measure to abolish property taxes was overwhelmingly rejected by 64% of voters. Rather, the strategy has been to move incrementally, probably in recognition of the fact that property taxes remain the\u00a0primary\u00a0tool\u00a0for\u00a0financing local governments. According to the Tax Foundation, \u201cIn fiscal year 2023,\u00a0property taxes comprised\u00a028.9 percent\u00a0of total state and local\u00a0tax\u00a0collections in the\u00a0United States,\u00a0more than any other\u00a0source of tax revenue.\u201d\u00a0<\/p>\n
But many of the benefits from property taxes identified by the Tax Foundation (less distortionary and a more stable source of revenue) aren\u2019t borne out in the real world, especially in California.\u00a0<\/p>\n
Again, Allaire Conte writing in Realestate.com notes that the current movement to restrict or eliminate property taxes has historical precedence: \u201cThe backlash is striking, but not without precedent. The\u00a0inflation shock of the 1970s\u00a0helped fuel\u00a0California\u2019s Proposition 13, the landmark 1978 law that capped property tax rates and limited annual assessment increases for long-tenured homeowners.\u201d<\/p>\n
In fact, Prop. 13 provides a model for other states seeking to limit property taxes, even if they are unwilling to enact total abolition. Proposition 13 curbs property taxes by restricting the maximum rate (1%) and, more important, by limiting increases in assessed valuation (2% annually). While it is true that, under Prop. 13, a property\u2019s current value can exceed its taxable value over a span of just a few years, that difference disappears when the property changes hands.<\/p>\n
Prop. 13 treats equally property owners who purchase property of similar value at the same time. Unlike property taxes in other states, it provides certainty in future tax liability and protects homeowners from the vagaries of the real estate market \u2014 something over which they have no control.\u00a0<\/p>\n
Ironically, Prop. 13 also protects local governments. Even the California Legislative Analyst has noted that Prop. 13 has reduced revenue volatility \u2013 a major problem in California with other kinds of taxes \u2013 and produced resiliency against real estate market crashes.<\/p>\n
The only problem associated with Prop. 13 is the extent to which it has been weakened by special interests and a hostile judiciary pursuing an aggressive agenda of higher taxes. But these tax-and-spend interests should beware. They discounted the odds of Prop. 13 passing in 1978 and if they continue to push taxpayers too far, more radical tax cutting proposals \u2013 including property tax elimination \u2013 could quickly become popular among California voters.\u00a0<\/p>\n
Jon Coupal is president of the Howard Jarvis Taxpayers Association.<\/p>\n","protected":false},"excerpt":{"rendered":"The question of whether California should abolish property taxes almost seems absurd. Our state, like all other states,…\n","protected":false},"author":2,"featured_media":238880,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[7,9,8,975,2082],"class_list":{"0":"post-238879","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-california","8":"tag-california","9":"tag-california-headlines","10":"tag-california-news","11":"tag-opinion","12":"tag-opinion-columnists"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/238879","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=238879"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/238879\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/238880"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=238879"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=238879"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=238879"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}