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Does Prop. 13 Affect California's Tax Base?

750 Words3 Pages

What is Prop. 13, and how has it affected California's tax base? Should California modify Prop. 13, if so, how?

In the past Proposition 13 benefited individuals, businesses, and other tax base but today that is no longer the case.
In 1978, California passed Proposition (Prop. 13) was a tax reform which "limited annual property tax to one percent of a property's assessed value" and legislated were now required to have two-thirds vote to raise taxes. (Vechten, "California Politicos", 2015 and lecture) Proposition 13 create a purchase price property tax systems such as "base value" which is "1% of the value of your property within the year of purchase" and "minimum 2% increase per year after that." (Lecture) Before the approval of Prop. 13, …show more content…

5.5 billion dollars is lost every year in potential revenue for the state by not having sales tax on food. (Dovarganes, See California… article, 2015) The employer will have an income tax break if contributes to health plan, social security benefits, mortgage interest, and prescription medicines. (Dovarganes, See California… article, 2015)Since Proposition 13 passed, homeowners have the burden of property tax since commercial real estate changes less than residential. (Semuels, California's business… article, 2010)Unlike other states business have a higher tax rate but California assures business will have the same tax rate known as the business tax loophole. (Semuels, California's business… article, 2010)& lecture) Other big cooperation's such as lobbyists and attorneys are known for having a tax break. (Semuels, California's business… article, 2010)The outcome of California Proposition 13 is property tax decreases while income and sales tax increases, business and cooperation tax break, tangles finances between the state and locality. (lecture) The property tax reduction affected revenue by 60%, and county and city funding declined in government. (closetheloophole.com/history) The California now distributes local property tax which affects the state general funds in the county and school system. (closetheloophole.com/history) The

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