Toward the end of September, Orinda residents, as well as residents of other part of California, will be receiving their 2016-2017 property tax bills.
What they will also be receiving is an example of economic tyranny.
In Orinda, the property tax on a $1 million home is likely to be $117 to $220 more in 2016-2017 than the property tax of the previous interval (2015-2016).
The higher tax rate is the result of Orindans’ passing Measure L, a $25 million road-repair bond. The bond was passed on June 7, 2016.
The property tax is really a form of a wealth tax because the property tax is levied on an asset that is still in the owner’s possession. Another example of a wealth tax is a tax on one’s funds in a bank account.
There is no property tax on a person’s furniture, clothing, or appliances. Nor is there a property tax on a person’s jewelry, computers, or books.
There is no property tax on assets like stocks, bonds, or businesses until the asset is sold (assuming the asset has appreciated in value).
And, worse, the tax on a new home in Orinda can be much higher. For example, if someone purchased a home in 1975 for $50,000 and sold it in 2015 for $1 million, the new owner pays a property tax based on the $1 million price.
During the 40 years (from 1975 to 2015), the home increased in value 20 times. However, the new owner — compared with the old owner — is not receiving 20 times as much in police, fire, and school services that the old owner received.
If the owner of a home fails to pay his or her property tax, the home can be confiscated by government authorities or a tax lien can be placed on the property.
The time has come to eliminate the property tax. However, people will ask: How will the schools, the fire department, the police department and other local services be funded?
The answer is to use an income tax. Using an income tax has the advantage of an owner’s not being forced to leave his home for lack of a tax payment. A person with no income simply pays no tax — property tax or income tax.
Imagine, the horror an unemployed person will face is he cannot pay his property tax bill. He has a good chance of facing foreclosure and, ultimately, homelessness.
The horror can be extremely acute for an older person living on a fixed income, and perhaps all such income comes from Social Security. Why should such a person face the humiliation of homelessness?
The city of Orinda — lead by an autocratic and uncommunicative city council majority — has made the tax burden worse by increasing property taxes in 2014 and 2016. (These property tax increases do not include the one-half percentage point increase in the sales tax passed by the city’s voters in 2012.)
The time to end property-tax tyranny has arrived. Orinda residents must demand that that city and state officials repeal the property tax.
# # #