PART TWO: As Attacks on Proposition 13 And Prop 58 Weaken, Critics Continue on with Split-Roll Tax Effort – Featuring Jon Coupal, CEO, Taxpayer’s Association

Proposition 13 and Proposition 58

Our discussion with Taxpayers Association CEO Jon Coupal continues, focusing on the 1978 California Proposition 13 tax relief benefits for home owners and commercial property owners – and critics of real property tax relief throughout  the state, whose efforts to destroy or water down Proposition 13 and Proposition 58  appear to be faltering, although they continue their efforts nontheless, despite vast popular support of these property tax relief and property transfer tax shelter protections…

Property Tax Transfer: Other than that one example of a wealthy  show business family being able to rent out a secondary property they own, with the ability to keep parents property taxes in CA low, and transfer parents property taxes while avoiding property tax reassessment – is that the only robust example they have that interests the public.

Jon Coupal: Of course. Any other example they have either puts people to sleep or is just based on generalities and disinformation. One wealthy family saves on property taxes and makes a profit by renting out a luxury Malibu home, therefore all wealthy people in California are doing the same thing. And Of course this is largely untrue.

Property Tax Transfer: Absolutely. We couldn’t agree more. Thank you so much Mr. Coupal, for your time with us today. We greatly appreciate it.

Jon Coupal: My pleasure.

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The realtors that Mr. Coupal mentions, that are committed critics of the original 1978 California Proposition 13 and our ability to keep parents property taxes in CA, frequently conduct interviews with California mainstream newspapers and online media. They repeatedly point out that California state and local city government pensions are vastly under-funded… due mainly, they insist, to  the 1978 California Proposition 13 tax shelter.

However, many economists have looked at this, and have stated repeatedly that city municipal workers and state government employees throughout California are actually at a higher overall income rate than equivalent government workers in other states are.

California state and city employee base salary rates, medical benefits, raises and, in particular, pension plans and retirement benefits – are, reportedly, a great deal higher and far more comprehensive than equivalent programs in other states, counties, cities and towns. According to financial researchers, their pension plans are by far the most expensive pension plans in the country.

State budgets consistently surpass state spending records – and the California educational system is now enjoying a 66% increase, reportedly over the next six years. When you peel back the layers, and really examine the facts and statistical data, it seems that public services are inferior in California, not because of the mega popular 1978 Proposition 13 property tax relief benefits for residential and commercial, as well as industrial, property owners. Not because of the ability to keep parents property taxes in CA, or the right to transfer parents property taxes when inheriting property and therefore  inheriting property taxes that go along with it… Not because of property tax transfer or avoiding property tax reassessment during  parent to child transfer, known as parent to child exclusion – but because of political preferences, special interest groups, and over-spending on those interests.

The facts appear to be pointing at apparent cycles of overspending, year after year on specific items such as local government employee salaries and bonuses, generous pensions, retirement perks, and reportedly “very generous” benefits, and other seemingly related areas.

These specific expenditures certainly do seem to be the reason certain popular programs created to help the general public are now severely under-funded. When you look closely at the facts, it certainly does seem that over-spending in certain areas are causing under-spending in other areas.

>> Click Here for Part Three…

Part Five: California Proposition 58, How to avoid property tax reassessment on an inherited home.

Bringing us up into the present, critics such as Assemblyman  David Chiu, of the San Francisco Assembly’s housing committee, continue to ignore how wildly popular avoiding property tax reassessment is in California… and  they are still repeating the same litany that is echoed by a thin minority throughout the state, insisting that, “The inheritance tax break has exacerbated [wealth] inequality and is symbolic of that inequality. The idea of the American Dream of everyday people being able to make it is completely impacted when the haves get more, and the have-nots have no chance of benefiting from property investment windfalls.”

We hear this litany all the time… indicating that wealthy Californians are the only people in the state that benefit from the Prop 13 tax break, avoiding property tax reassessment.

This misinformation is, of course, nonsense…. twisting the truth to fit a certain point of view; which in itself is, essentially, untrue on the face of it. All those people Mr. Chiu is actually referring to are renters not owners… and yet – without knowing it he is actually making the point that needs to be made – that, bottom line, most landlords are able to save on property taxes, thanks to Prop 13, and in turn this allows them to keep rents low for renters. However, that’s the part of the equation that folks like Mr. Chiu forget!

And if indeed property owners, i.e., landlords, throughout California, did not have the Proposition 13 tax break, obviously they would be motivated to raise their rents. So, in fact, without knowing it, Mr. Chiu and others voicing the same opinions are surfacing the critical point that proponents of these tax shelters have been trying to make – since you could avoid property tax reassessment with Proposition 13, after it was passed overwhelmingly by nearly 66% by voters in 1978, and subsequently, in 1986, when the popular Proposition 58 parent to child transfer of property taxes passed, providing parent to child exclusion from property tax reassessment; plus Proposition 193, a constitutional amendment approved by voters on March 27, 1996, which allows grandparents to transfer property to grandchildren – with the ability to avoid property tax reassessment all on their own as grandparents and grandchildren.

The main point being, it’s not only property owners that are benefiting financially from Proposition 13 tax relief – we have also found Prop 13 and Proposition 58 benefits strengthening family bonding and overall net worth, providing an enormous blanket of peace of mind for home owners of all stripes, cultures, ages and incomes…. as well as those expecting to inherit CA property, or looking to become happy home owners. Moreover, renters are paying far less in rent, thanks to the property owners they pay rent to being able to continue avoiding property tax reassessment, and therefore spending less every year on property taxes that they would otherwise be passing on to their renters. Clearly, this savings trickles down from owner to renter for thousands of renters in California. Whether the David Chiu’s of this world care to admit it, or not.