Well, they’re at it again. Progressive journalists at the San Francisco Chronicle – but I repeat myself – have come up with a new label for constitutional limits on tax increases. They’ve declared these limits to be “tax subsidies.”
Since when is keeping more of your own money a “subsidy?”
Of course, this latest report is yet another attack on Proposition 13. Progressive journalists continue to be baffled that voters stubbornly support Prop. 13, the 1978 initiative that many reporters simply misunderstand. The Chronicle’s piece begins, “Since the late 1970s, many California property owners have received large property tax subsidies thanks to Proposition 13.”
Is there any homeowner in California who honestly believes that they are getting a “subsidy” from the government when they pay their property tax bill? Let’s set the record straight. The money doesn’t belong to the government. It belongs to the people who earned it.
Even with Prop. 13’s protections against uncontrolled tax increases, California is decidedly not a low property tax state. It ranks 18th out of all 50 states in per capita property tax collections.
The state’s overall tax burden is even worse when income, sales and other taxes are thrown in. Only New York and Connecticut extract more from their citizens than California.
The Chronicle’s big bug-a-boo is that, under Proposition 13’s acquisition value method of taxing property, it is possible for long time property owners to pay less than those who own similar homes but purchase at a later point in time. But that is exactly the way Proposition 13 is supposed to work. Every property’s base-year value is set at the time of a transfer of ownership and can go up no more than 2% per year with inflation. Every property owner is protected from sudden and unaffordable tax increases based on the rising market value of their property, a factor they can’t control or predict.
Without Prop. 13, California property owners could be taxed out of their own property by inflation. This is precisely what happened to thousands of homeowners in the 1970s, and it would happen again today if Prop. 13’s antagonists ever succeeded in their goal.
Beyond the “subsidy” misunderstanding, the Chronicle article makes some factual errors as well . It states, “Other reform efforts have attempted to loosen Prop. 13’s restrictions on passing parcel taxes, which require a difficult-to-achieve supermajority. In 2024, voters rejected Proposition 5, which would have lowered the threshold for affordable housing and public infrastructure taxes from two-thirds to 55%.”
In fact, Prop. 5 wasn’t about parcel taxes – it was an attack on the supermajority vote needed to pass local general obligation bonds. The two-thirds vote requirement was imposed by the California Constitution in 1879 to prevent local governments from taking on too much debt.
The Chronicle also states that last year, “the California Supreme Court removed [the Taxpayer Protection Act] from the ballot, concluding it would alter the state government so much that it qualified as a constitutional amendment, not an initiative.” But the Taxpayer Protection Act was in fact a duly qualified constitutional amendment. It was removed from the ballot for supposedly being an impermissible “revision,” a ruling contrary to all previous case law and one which inflicted a body blow to the citizens’ rights of direct democracy.
More fundamentally, the characterization of Prop. 13 as conferring tax “subsidies” to property owners is the worst form of Orwellian doublespeak, i.e., language that deliberately obscures, disguises, distorts, or reverses the meaning of words.
We’ve seen this before. Several years ago, big-spending politicians and bureaucrats began calling certain tax exemptions or credits “tax expenditures.” While these may or may not be well justified from a public policy perspective, calling them tax “expenditures” is intended to send the message that tax reductions are simply another form of government spending. No, they’re not.
Tax “subsidies” takes the notion of tax “expenditures” a step further down the doublespeak path. George Orwell would be proud.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.