Opinion: Corporate welfare in California hurting economy and homeowners
Corporate welfare is often camouflaged in taxes that seem neutral on their face but give windfalls to big entrenched corporations at the expense of average people and small businesses.
Take a look at commercial property taxes in California, for example.
In 1978 California voters passed Proposition 13 鈥� which began to assess property for tax purposes at its price when it was聽bought, rather than its聽肠耻谤谤别苍迟听market price.
This has protected homeowners and renters. But it鈥檚 also given a quiet windfall to entrenched corporate owners of commercial property.聽
Corporations don鈥檛 need this protection. They鈥檙e in the real economy. They鈥檙e supposed to compete on a level playing field with new companies whose property taxes are based on current market prices.
This corporate windfall has caused three big problems.
First, it鈥檚 shifted more of the property tax on to California homeowners.
Back in 1978, corporations paid 44 percent of all property taxes and homeowners paid 56 percent. Now, after exploiting this loophole for years, corporations pay only 28 percent of property taxes, while homeowners pick up 72 percent of the tab.
Second, it鈥檚 robbed California of billions of dollars to support schools and local services. If all corporations were paying the property taxes they should be paying,聽schools聽and local services would have $9 billion dollars more in revenues this year.
Third, it penalizes new and expanding businesses that don鈥檛 get this windfall because their commercial property is assessed at the current market price 鈥� but they compete for customers with companies whose property is assessed at the price they purchased it years ago.
That鈥檚 unfair and it鈥檚 bad for the economy because California needs new and expanding businesses.
Today, almost half of all commercial properties in California pay their fair share of property taxes, but they鈥檙e hobbled by those that don鈥檛.
This loophole must be closed. All corporations should be paying commercial property taxes based on current market prices.聽
The giant corporations that are currently exploiting the loophole for their own profits obviously don鈥檛 want it closed, so they鈥檙e trying to scare people by saying closing it will cause businesses to leave California.
That鈥檚 baloney. Leveling the playing field for all businesses will make the California economy more efficient, and help new and expanding businesses.
Besides, California鈥檚 property taxes are already much lower than the national average. So even if corporations pay their full share, they鈥檙e still getting a great deal.
Right now, a grassroots movement is growing of Californians determined to reform this broken commercial property tax system, and who know California needs more stable funding for its schools, libraries, roads, and communities.
This article first appeared at
