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The Political Math Of The Geoist California Tax Reform Initiative

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Iconic Images of California by Frank Walker

On his website: http://www.prospercalifornia.com/

California activist and attorney, Frank D. Walker, makes the case for radical tax reform. As the home page puts it, this is:

Reform That Will Revitalize California's Economy and End The Public Finance Crisis

The California Tax Reform Initiative is now in circulation for the purpose of obtaining sufficient signatures of registered voters to qualify for the ballot next November (Sec. of State initiative #1413, A.G. File No. 09-0051).

When approved by voters, this measure will eliminate most taxes which discourage productive enterprise and commerce in California. The following taxes will be abolished: the sales tax, the existing property tax on both real and personal property and the corporations tax. The first $150,000 of annual personal income will also be exempt from the state income tax and the maximum income tax rate will be reduced to 8%.

Public revenue for state and local government will primarily be provided by a tax which economists agree does not penalize productive activity -- a tax on the rental value of California's enormously valuable land.

Improvements to land, including all buildings, will not be taxed. California's public assessors already value land and improvements separately for each parcel of real property, so the new tax system simply builds upon a valuation system which has long been in place in our state.

Three key outcomes which this tax reform initiative will provide are:
  • A prosperous state economy with many new, productive jobs.
  • Lower taxes for the large majority of households in California.
  • Ample public revenue to benefit all Californians

California's Legislative Analyst and Department of Finance estimate that the new tax on land rent will generate revenues of $130 billion to $160 billion annually.

However, this is a conservative estimate based only on existing land values. It does not take into account the large increase in land rental value which will certainly occur as demand for land in California rises sharply in response to the elimination of well over $100 billion in existing taxes which now fall largely on those individuals and businesses who produce the goods and services that constitute the economic output of our state.

As producers respond with increased investment and new enterprise to the elimination of taxes which currently reduce productive activity and commerce, California's economy will surge forward and many new job opportunities for unemployed Californians will be created.

Because the ownership of our state's most valuable land is heavily concentrated into the hands of a relatively small number of Californians and non-residents (often corporations whose owners mostly reside outside of California), the large majority of Californians will pay substantially less in taxes under the proposed new system than they do now. Californians who rent will benefit hugely under this reform as will a high percentage of working homeowners, especially those households with two wage-earners.

=====

In a followup directed to Georgists (full disclosure: I am a card-carrying Georgist, and President of the Georgist activist group, Common Ground - New York City), Walker had this to add that might spell out the benefits of this tax reform more clearly:

I am currently handling the legal administration of the estate of a woman who lived in a mobile home park in the same city in San Diego County in which I reside. There are 192 spaces in this mobile home park, all of which are currently occupied. As a resident of the park for over 30 years, the decedent was paying one of the lowest rates of rent in the park on the plot of land occupied by her mobile home at the time of her death -- $463 a month exclusive of utilities, trash pick-up, etc.

The rent when decedent moved into the park in 1976 was $115 a month. The mobile home park is limited to residents who are at least 55 years of age.

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Take action -- click here to contact your local newspaper or congress people:
Support Sec. of State initiative #1413, A.G. File No. 09-0051

Click here to see the most recent messages sent to congressional reps and local newspapers

http://newthinking.blogspot.com/

Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles was published by Tayen Lane Publishing (December, 2014) and may be found here:
https://tayen-lane.squarespace.com/america-is-not-broke/

Scott is President of Common Ground-NYC (http://commongroundnyc.org/), a Geoist/Georgist activist group. He has written (more...)
 

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Frank Walker responded to my inquiries about the C... by Scott Baker on Tuesday, Jul 20, 2010 at 4:39:37 AM
Just one question, what is needed to fully fund th... by kanawah on Tuesday, Jul 20, 2010 at 6:03:06 PM
First of all, what this article didn't cover is th... by Scott Baker on Wednesday, Jul 21, 2010 at 8:44:24 AM
Scott, I cannot do the math, so maybe you can addr... by Tony Bartoletti on Wednesday, Jul 21, 2010 at 11:42:39 PM