Blue State Blues: California Is Deteriorating into a Feudal Society of Inherited Land Wealth
18th August 2018
Except, of course, that ‘feudalism’ was based on land that was actually productive rather than just Hipster Expensive, but nobody expects ‘journalists’ to understand what they’re talking about these days (especially at Voices of the Crust like Slate).
The story, by Liam Dillon and Ben Poston, analyzes the fallout from a 1986 California law that allows children to inherit their parents’ frozen-in-time tax assessments along with their houses. The state’s property tax rolls were forever stunted by 1978’s beloved, infamous Proposition 13; the 1986 follow-up, Proposition 58, is what allows those ’70s tax rates to be enjoyed by the next generation.
Voted for by a legislature that is overwhelmingly Democrat.
According to the California Legislative Analyst’s Office, the inheritance exemption cuts $1.5 billion from the state’s property tax intake each year—or 2.5 percent of total statewide property tax revenue. In counties with the highest property values, the exemption can reduce state revenue by nearly 10 percent.
And, of course, anything that reduces government revenues is a Crime Against Humanity.
Prop 58 was intended to help families avoid a sudden property tax spike after a homeowner’s death and allow children to afford to stay in their parents’ homes. But it has also enthroned a privileged class of second-generation California homeowners, many of whom don’t even live in those houses.
All in all, the state preserves old assessments on 60,000 to 80,000 inherited properties each year. It’s an intergenerational transfer of wealth that upholds a system in which out-of-state, immigrant, or first-generation homebuyers wind up shouldering a disproportionate tax burden.
Note the assumption that ‘tax burden’ is like the weather — it just comes, from we know not where, and if one class of person escapes it, then the slack must be taken up by another class of person, typically the class of person to which the writer of such screeds belongs. Of course, nobody writing for Slate could ever possibly have a good word to say about ‘intergenerational transfers of wealth’, anyway; that’s ThoughtCrime.