California Lawmakers Seek to Make it Easier to Raise Parcel Taxes

There is no doubt that Americans owe a great deal to ancient Greek civilization that once dominated the Eastern Mediterranean, including the island of Cyprus.  It is to them and their experiment with democracy that we can trace the roots of our own democratic institutions.

Of course, a lot can change in 2,500 years and, today, we fear that our leaders may be tempted to follow the modern Greek example of governance and taxation.  Greece, itself has become the poster child for overpaying underperforming government workers and for creating an unsustainable entitlement-based society.  Sound familiar?

When the government attempted to rein in spending and limit benefits to remain solvent, the result was rioting in the streets.  Greece is classified as one of the PIIGS that constitute Portugal, Ireland, Italy, Greece and Spain, all mismanaged nations teetering on the brink of economic collapse and threatening to bring down the viability of the European Union.

The Republic of Cyprus has now joined the PIIGS.   The government – under pressure from the European Union – has proposed to immediately tax all bank deposits to qualify the nation for a bailout.  The tax collectors would seize 10% of all accounts over 100,000 euros and 6.75% of smaller accounts.  (Currently, a euro is worth about a buck thirty).

This proposal has something in common with California’s recent Proposition 30 in that government leaders can claim it is a tax on the rich but, in reality, virtually everyone is paying.   Because fearful Cypriots now want to withdraw their savings, banks have been forced to close and limit ATM withdrawals.  Not surprisingly, this has led to rioting in the streets.

So why should we in California take note?  Because Sacramento politicians are currently seeking to increase taxes on the primary savings vehicle for many Californians: Their homes.  The lawmakers’ goal is to undermine Proposition 13, which limits increases in property taxes to two percent annually, by making it much easier to approve new taxes on each parcel of property within a community.  Known as “parcel taxes,” these taxes impose a uniform levy — the young couple in a starter home, the elderly couple in a bungalow and a multimillionaire in a mansion, all pay the same amount.  There is no restriction on the dollar amount of these taxes that exceed Proposition 13’s limits, or on the number of such proposals that can be placed on the ballot.

Currently, parcel taxes can be approved with a two-thirds vote, and even with this super-majority requirement, some homeowners are seeing their tax bills increased by well over a thousand dollars.

Lawmakers want to lower the vote requirement so these measures can pass with 55% or less.  If they are successful, the number of parcel taxes proposed and passed would increase dramatically and diminish the primary asset of millions of Californians.  Homes, they believe, are an easy target.

So while Greek Cypriots are trying to salvage their savings, California homeowners should be aware they face a similar threat to their savings.  Let’s just hope the tax hungry Sacramento politicians don’t decide that our bank accounts are fair game, too.

Jon Coupal is President of the Howard Jarvis Taxpayers Association.