Opinion

Repealing Prop 13 Commercial Property Tax Protections will Destroy Small Businesses

Written by Nicholas Vetrisek

On the November ballot, a new measure is being added that will essentially repeal Proposition 13 protections for businesses. This will no doubt work as an easy way to get short term revenue for the state, but it will destroy many small businesses in the process. 

Prop 13, passed in 1978, caps property taxes at 1% or the rate of inflation. Repealing it for businesses means that the state can effectively raise property taxes for businesses as high as they wish. This repeal effort clearly shows Democrats’ contempt for small businesses as this is the group that will be hurt the most.

Huge corporations like Wal-Mart and Target will have no problem paying the taxes, no matter how exorbitant. The people it will hurt most are those that own small businesses—and those who rely on them. Many small businesses already operate with a low margin of profit and any tax increases will likely tip many of them over the edge. Some voters may be content with the consequent spike in commercial property taxes, but the reality is that this is not where it will end.

Democrats in California have wanted to repeal Prop 13 for decades. If this repeal proposition is allowed to pass, Prop 13 will be chipped away until the whole thing is eliminated altogether. It has never been about taking money from the “greedy” rich people. It’s about getting everyone’s money.

In 1913, when the federal income tax was originally passed, it was originally only meant to tax the very top earners of American society. Unfortunately for the common American, however, the 1% found tax loopholes and now every American, rich or poor, stresses about paying Uncle Sam each year.

If this proposition is allowed to pass, the same thing will happen to California in 2020 that happened across the United States in 1913. Small businesses will feel it first, then average homeowners. Multinational conglomerates and wealthy residents will be able to absorb the tax hit, or more likely, find a way around the taxes. If you don’t support the small business owners when the state is coming after them, no one will be there when they decide to come after you.

 

Photo by GotCredit via Flickr