Today we are going to chat about California’s Proposition 15. This tax increase targets businesses at exactly the time when we need to be focusing on helping them recover so that they can start hiring again once we emerge from the quarantines that have been in place for months. Even if you agree with the spirit of this proposed change, you would at least need to admit that the timing could not be worse.
We will do a broad assessment of this dramatic tax increase and propose some negative effects that will very likely become the new reality if it is passed. Also, at its core, it is a strike at the protections created by Proposition 13 that most Californians rely on to keep state property taxes under control. The tendancy of government is to push further on items like this and assuming that they will not use this as a sign they can later degrade more Proposition 13 protections would be a mistake.
A robust real estate market is built on a foundation of strong employment and this would likely kill any hopes for a robust recovery post COVID.