COMMENTARY | COLUMNISTS | FRED SCHNAUBELT

Proposition 13, Lady Godiva and historical tax facts

For crying out loud, not again! Proposition 13 tax limits may be irrevocably changed by an amendment to the state Constitution in a bill introduced by Democrat senators in their insatiable hunger for ever more taxes.

Here’s how Proposition 13 came about. In 1960, new homes sold for $12,000 to $20,000 and my older brother bought his first home in Clairemont brand new for $15,000 and 5.5 percent interest rate. By 1978, his property taxes, reflecting the high inflation rates of the era, were approaching his annual house payments.

For millions of California homeowners who had bought earlier and cheaper, their property taxes exceeded their annual mortgage payments; hence the major impetus for Proposition 13. Politicians, ever since, have been attacking it as unfair and an illegal gift of public funds.

"In this world nothing can be said to be permanent, except death and taxes," Ben Franklin said. The first record of taxation we have is the Rosetta Stone, a decree of King Ptolemy V, written in 196 B.C. It was "written in stone" — a confirmation of Franklin's fear about permanence.

William the Conqueror introduced a more all-encompassing record of taxation in 1086 called The Domesday Book. It is the oldest government book in the United Kingdom's National Archives. Kings, by divine right, owned everything in their realm and it was so detailed that "not one ox nor one cow nor one pig" was omitted. It was the ideal revenue source because everybody and everything was taxed.

The cry, "No taxation without representation" would crop up from time to time such as in the Magna Carta in 1215 and our Boston Tea Party in 1773, but the earliest most titillating tax revolt was Lady Godiva's protest in the 11th century against her husband taxing policies. Naked, on her horse she rode through the streets of Coventry -- only her long tresses covering her body. Legend has it that only Tom the tailor peeped, and the term "Peeping Tom" was born.

Not surprisingly, tax collectors throughout history have not been loved. In Biblical times, tax collectors received a fee for their services. However, after a while, governments began outsourcing the work to the highest bidder, who paid for the job in advance and collections often devolved into extortion.

So hated were tax collectors that Jesus said when people don't listen, "treat them as you would a pagan or a tax collector" (Matthew 18:17).

Proposition 13, approved in 1978, limits property taxes to 1 percent of assessed value and limits the amount assessments can be increased to 2 percent a year – until the property is sold and reassessed.

State Sens. Holly Mitchell, D-Los Angeles, and Loni Hancock, D-Berkeley, submitted a constitutional amendment (SCA 5) in June to make a basic change in Proposition 13: tax business properties and residences differently, a so-called "split roll."

Surprise, surprise. Democrats want a split tax roll to generate more taxes. This, despite government being awash in money; it has streams of money, rivers of money, oceans of money. There is no greed like government greed and politicians want to tax everything that moves or stands still, just like in 1086.

No government — federal, state or local — is short of money that can redistribute billions of dollars for professional sports and solar companies; free college tuitions; free services for illegal immigrants; unemployment benefits for millionaires; brand new homes for poor people; subsidies for golfers, operas, symphonies and ballets; billion-dollar B-2 bombers; bridges and bullet trains to nowhere plus business loans to America's largest corporations.

The indisputable common denominator is votes and campaign contributions, payment for taking from the rich, middle class and poor and giving to rich, middle class and poor, after government first retains its transaction fees.

"Eventually you run out of other people's money," as we've seen in Detroit; San Bernardino; Mammoth Lakes; Stockton; Jefferson County, Ala.; Harrisburg, Pa., (47 municipalities in all) not to mention Greece, Iceland, Argentina, Pakistan, Zimbabwe, Ecuador and Sweden before it dumped socialism.

Richard Rider has documented that "San Diego County, in 1977 — the year before Proposition 13 took effect — our countywide property tax revenue was about $639 million. For the recently completed 2013-14 fiscal year, our county treasurer reports that real estate property tax revenues were $4.932 billion.

“And according to the County Assessor, since Proposition 13 passed, 97 percent of the pre-Proposition 13 county owner-occupied homes has changed hands (and been reassessed) at least once.

“During that time frame, our county population has grown almost 90 percent, and inflation has gone up about 290 percent. Hence, property tax revenues today are higher than the bloated Pre-Proposition 13 year, even after adjusting for inflation and population growth."

While businesses have to rely on voluntary cooperation, governments rely on force, coercion and intimidation. However, it's important to note that government is not a "necessary evil," as claimed by Thomas Paine.

Government is indispensable for protecting us against foreign and domestic bullies, protecting our private property and invoking a common system of justice — i.e., indispensable when government is properly and constitutionally limited.

To be sure, some politicians act as if anything less than 100 percent of your income is a tax loophole. Their plan is to divide and conquer the beneficiaries of Proposition 13's tax limits between businesses and residences, and they must be fought through "eternal vigilance."

Milton Friedman summarized it best as "I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible."

The demand for the split roll is the camel's nose under the tent. Proponents ultimately hope to get all Proposition 13 rescinded so they can tax, tax, tax to their heart's desire.


Schnaubelt, president of Citizens for Private Property Rights, has been a commercial real estate broker for 45 years and was a San Diego city councilman from 1977 to 1981.

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36 UserComments
Richard Rider 12:00am August 18, 2015

Business (especially big business) seems willing to compromise on increasing transportation taxes in exchange for killing off “split roll” Prop 13 changes. But one problem with such deals is that it holds only the LEGISLATURE responsible. After the deal is done and transportation taxes raised, the UNIONS are free to put split roll (or any other tax increase) on the ballot via the initiative process. It costs maybe $2.5 million to do so — chump change for the most powerful group in California.

Eliot Pyle 12:00am July 20, 2015

Excellent compilation of our tax history. A good example could be made with a what if there was no proposition 13. The extra taxes would be a windfall for our politicians, but thousands would not be living in their own homes. The past is history often ignored to be repeated again and again until the entire system collapses.

DONALD MOOTS 12:00am July 19, 2015

Great artical. I would like to point out that if a busines makes a profit ( after taxes ) the consumer has paid all the tax,permits,levies bribes and fines. if that were not so the bussines would not stay in buissnes! So split roll makes no sense .

Carole 12:00am July 18, 2015

Home values in California have risen so much and we could not afford to buy today. Our earnings were low and we bought what we could afford to pay in mortgage and taxes. If we lose Prop 13, we will have to move as our retirement income is not sufficient to pay taxes on the current escalated value of our home. And where might we move? It would have to be out of state. Prop 13 saved so many from losing their homes. When will our politicians learn to budget as we learned to do years ago?

RANGER DICK FROST 12:00am July 18, 2015

Who are these Democratic Lawbreakers that live in their Sacramento mansions and have never had to concern themselves with the cost of property taxes as dealt with by the average home owner; never-the-less audacious enough to tamper with the "good for all" (as with Prop 13) and fraudulently generate generous sums of new tax money to line their campaign pockets with, while grossly misrepresenting their motives.

Celia Joslyn 12:00am July 18, 2015

No new taxes!!!

Phil Famolaro 12:00am July 18, 2015

THANK YOU for being so vigilant against the challenges to Proposition 13. Howard Jarvis was, and his successors are "the taxpayers best friend". It seems that the primary mission of every legislator is to get him/herself reelected, while fleecing the system. Few, if any, represent the voters who elected them in office. Instead, they represent the businesses, organizations, and any "special interest" that will finance their exorbitant campaigns and over-affluent life style. Howard Jarvis was a man of integrity who did the job that he was elected for: represent the voters that elected him into office. Howard Jarvis is a role model for any legislator with integrity.

Susan Ellman 12:00am July 18, 2015

I have lived in Topanga Canyon for 44 years. When we bought the house (a very simple two bedroom, one bathroom home--a sort of cabin among Sycamores & California Oaks the property was $23,000 including an adjacent lot. Now a house down the street sold for over a million dollars. But my property hasn't changed. Yes I've maintained the home; painted , changed flooring, replaced dry rot siding, doors & screens, replaced roofs, redid plumbing but this is still a simple home--no pools, horses, garage, fancy landscapin--just natural terrain with yearly brush clearance. And although I receive Social Security still work full time for the Welfare Department. I could not afford taxes for a property assessed a million daollars. Furthermore because the democrats have become so tax hungry I am considering changing my party. I do believe in taxes, but I also believe in restraint.

C Johnson 12:00am July 17, 2015

I am curious on how taxing of property came into being. Food along with water, shelter and clothing are the necessities of life. But food is taxed, water is taxed, clothing is taxed and especially your shelter is taxed. How can one find an accounting of all the tax monies that have been collected and disbursed? As Margaret Thatcher is quoted to have said, "Socialism fails when you run out of other people's money".

John Blackburn, San Francisco 12:00am July 17, 2015

Thanks to the HJTPA and especially to Fred Schnaubelt for his timely and historical piece on Prop 13 and tax issues facing Californians. Surely one of the most articulate and best pieces written to date. As Jorge Augustin Nicolas Ruiz de Santayana y Borras so eloquently said, "Those who cannot remember the past are condemned to repeat it." Prop 13 was the most important tax revolt in American history since the Boston Tea Party, and it is unfortunate more states didn't get on the Prop 13 train. Prop 13 didn't constrain California's government - it only made it more adept at cooking the books and finding and diverting other sources of revenue streams for its doubtful and seemingly endless line of senseless programs at the expense of taxpayers. Democrats and Republicans must share the blame for mismanagement of our state's finances.

John Boyajian 12:00am July 17, 2015

People who do not own property should not be allowed on TAX issues.

Richard Frost 12:00am July 17, 2015

Fred, Thank you for your remarkably well written and comprehensive document tracing the history of Proposition 13. The responses received to date tell the whole story of how incomprehensible it is that anyone would want to tamper with this provision in our tax laws. Who are these Democrats that have nothing better to do than wring the last dollar out of California residents who are already burdened by an economy that has gone to Hell in their callous, dirty hands. Is even one of them own a property under Prop 13 or more likely sitting in in their Sacramento mansions rubbing their hands to the bone waiting to strike one more blow to average home owner/taxpayer who is challenged every month with meeting ordinary expenses, much less comprehending how to absorb one more Democratic salvo to our "budgets under fire" already. Finally, the dogged Democrats that want our money will spend it on fraudulently on efforts to secure campaign funds.

Lee Goslin 12:00am July 16, 2015

Thank you so very much for all of your good work in trying to protect us from the minions of government! We live in a time of grave challenges as big government is feeling its oats, and the efforts of Jon Coupal and the HJTA remain crucial to any serious attempt to hold back the tide of government greed and overreach.

Toni 12:00am July 16, 2015

I am glad that I helped going door to door in the 1970's to get voters out to support prop13 at that time. Getting more tax money to use to get more programs funded is a lazy way to get votes. I am glad that I helped then, as I am not able to help now.

Toni 12:00am July 16, 2015

Thank you 'Prop thirteen' for all of your diligent work to help keep our taxes as low as possible. I am glad that I helped going door to door in the 1970's to get voters out to support prop13 at that time. Getting more tax money to use to get more programs funded is an EXPENSIVE to us taxpayers and lazy way to get votes. Has 'Prop 13' considered the Land Value Tax idea mentioned in the previous comments? I will appreciate a discussion abut this in next issue if possible:-) Toni

Chuck Potter 12:00am July 16, 2015

Thanks for your watchdog efforts. We must be ever-vigilant in our pursuit to make our governing bodies accountable for the tax revenues we allow them. As a controller, there is nothing more dangerous then turning over trust of our money to those who covertly spend as they seem fit. We need to get back to the fundamentals of government accounting, which is, funds are voted for one thing and spent on that thing, responsibly. Technically, anything else is illegal unless we grant authority to use in another "emergency." We must be careful with the authority we grant when we vote. Painful the research is...looking the other way even more so.

T. Spanton 12:00am July 16, 2015

THE GIFT THAT KEEPS ON GIVING,aka, THE TAXPAYERS, LEGAL CITIZENS!!!!!

Nathan 12:00am July 16, 2015

Big Brother has outgrown his cage and is a menace to all. It's high time we put him back into his cage and teach him some manners, lest he continue to become more unruly and demand more and more bananas from the citizens! Enough is enough!

Tim rhodes 12:00am July 16, 2015

SCREW THE STATE .... Cancel taxes

Eddie B. Johnson 12:00am July 16, 2015

For "many years" now, I find it harder and harder to identify "anything positive" about living in California, "other than the favorable" weather!!! Revenue wise, it doesn't seem to matter that Californians are already taxed more than "most Americans"!

Don & Phalba Thomas 12:00am July 16, 2015

As we approach the end of our lives, and having lived in CA for over 55 years and in our current home for over 42 years, my wife and I are ready to leave this state. The corruption and never ending taxes in our legislature have just become too much. The voters elect crooked politicians who never stop squandering tax money and lining their own pockets. It never stops.

Jeff James 12:00am July 16, 2015

We are taxed when we earn it, spend it, save it, and live. I can barely afford to keep my home now after my retirement income is taxed, let alone my property taxes. I've used every benefit Prop 13 offers, and still feel my property taxes are too high. It scares me to death to think of the consequences of any kind of "alteration" of Prop 13. Especially after reading about all the tax and spend waste that goes on by politicians. Thank you HJTPA! Please keep a watchdog eye on them forever. Some SD County properties are subject to Mello Roos and fire protection taxes. Clear Prop 13 violations already happening. And they're getting away with that already. What next)

Nathan 12:00am July 16, 2015

Big Brother has outgrown his cage and is a menace to all. It's high time we put him back into his cage and teach him some manners, lest he continue to become more unruly and demand more and more bananas from the citizens! Enough is enough! Cut the budget just like 90% of the citizens have had to do primarily because governments do not understand basic economics, refusing to exercise proper care or concerns over spending monies they don't have. WHERE'S THE FIDUCIARY RESPONSIBILITY WHEN IT COMES TO SPENDING OUR MONEY WISELY! SCRAP THE BULLET TRAIN ... IT'S A BOONDOGLE OF WASTE!

Glenn Sheppard 12:00am July 16, 2015

Bravo. Well written. I have not confirmed all stats and historical anecdotes, but great article. I do need to research the how businesses put land/buildings into separate corporations and avoid all reassessments when the underlying business is sold. Sounds like a loop-hole, but, given the horrible business environment in this state, one little advantage is easily justified.

Morlinda 12:00am July 16, 2015

Will someone in Sacramento please understand that their grab for more and more tax money affects people who live in this state? We are already taxed to death. Without Prop 13, I would undoubtedly be out on the street. As a retired, single woman, my income was "fixed" to cover a 1995 living cost, now in 2015 it is barely enough to meet expenses. Higher property taxes would cause me to lose my family home. Then I suppose I would have to claim state aid. How does that benefit the state?

John Swint 12:00am July 16, 2015

A far, far, far better plan would be to cut spending, but that'll be the day.

Mark C. Eshelman 12:00am July 16, 2015

God bless you all for all you do for us oppressed tax payers. It is high time that we "organize" against the leftist "tax and spenders". Roads and libraries are one thing! Paying for them 10 times over is another.

Tom 12:00am July 16, 2015

Let me get this straight. You say: "For millions of California homeowners who had bought earlier and cheaper, their property taxes exceeded their annual mortgage payments; hence the major impetus for Proposition 13. Politicians, ever since, have been attacking it as unfair and an illegal gift of public funds." So cutting back on property taxes is an unfair and illegal gift of public funds. But I guess it's OK to tax people out of their homes. Before Prop 13, a man in Oakland was using a sledgehammer to knock down walls in his house to bring down the value of his house. Before Prop 13, my parents taxes went from $400 to more than $800 just to fund a bunch of spending by spend-hungry politicians. In 37 years, the politicians still haven't gotten the message. That we're tired of taxes. The only way to stop this is to cancel the Democrats super-majority in Sacramento and even up the makeup of Sacramento between several parties.

Kevin Buck 12:00am July 16, 2015

Amen, Fred! And, just to add insult to injury, up here in Mendocino County, every street bum has a dog. Why? Because they get public funds to "feed the poor critters" and every dog looks like a skeleton. Hmmmm, now where would that money be going?

Theresia Hermann 12:00am July 16, 2015

This is more than infuriating. These pigs in Sacramento need to be thrown out of office, The waste in Sacramento that is going on is unbelievable -i.e. the majority of people voted against that bullet train but Brown ignored the citizens of this state and railroaded it through. This state is now run by radicals and if they succeed in taxing businesses even more than they already are all industry will be leaving this state. Who will then pay the taxes

Dwight Satchell 12:00am July 16, 2015

For the products of our public schools, if businesses are taxed, those taxes are just passed on to you, the consumer, in higher costs for products and services. In other words, businesses are acting as the tax collector. When the cost of products and services that you buy go up, your standard of living goes down and we the consumer, as is always the case when taxes are raised, are the ones that lose!

Miriam Reyes 12:00am July 16, 2015

If we leave it up to the politicians they will tax us right into living in cardboard box's out in the street. We must stand together and help each other. All of us who are living on the small income of social security, that will be our future if we not fight this.

Leroy E. Krauss 12:00am July 16, 2015

We should be heard as a voice against any modifications of California State Law regarding Prop 13, as written! Use this as a Motto, "Save Prop 13", and every time you donate to a Cause or Candidate or Service Organization, add it to your check or correspondence, alongside your signature. We must be heard !!!

JOHN PHILLIPS 12:00am July 16, 2015

AT 83, WITH REALLY NO INCOME, I GIVE MOST OF WHAT I HAVE TO GOVERNMENT TO GIVE TO PEOPLE WHO HAVE NOT WORKED AND NEVER WILL====AND TO INCREASING GOVERNMENT EMPLOYEES WHO WILL HAVE LIFE TIME PROTECTION FROM MONEY FROM PEOPLE LIKE ME WHO HAVE WORKED ALMOST A LIFE TIME. AT PRESENT TIME I AM PAYING MORE THAN I CAN AFFORD AND SUPPORT GOVERNMENT THAT IS NOT PROTECTING ME OR MY WIFE FROM DOMESTIC THUGS AND FOREIGN THUGS WHO OUR FEDERAL GOVERNMENT FEELS HAVE MORE RIGHTS THAN THAN AMERICANS DO!

Edwin White 12:00am July 16, 2015

Last year The democratic legislature voted against closing certain loopholes in prop 13, which had bipartisan and HJTA support, because the tax yields were not enough. They are after a much bigger tax increase. A split roll would double and maybe treble the tax hit on the many mom and pop landlords in older cities on the coast. They will be driven out of business along with their mom and pop businesses who lease storefronts from them. And anyone who thinks their rent will not be affected, is living in a dream world.

Wyn Achenbaum 12:00am July 14, 2015

Friedman also told us which tax we should be using: he called land value tax (LVT) the "least bad" tax at least 3 or 4 times over 30 or 40 years. When voters want better services, they vote in the people who will give them that -- and then find a way to get others to pay for them. Voting for lots of services and limiting the property tax forced you into relying on sales & wage taxes -- both terrible ideas if you know anything about economics or public finance. California needs to educate itself about wise, efficient, just, logical taxation. LVT is natural public revenue, and California ought to get rid of Prop13 which prevents its application. Update the assessments to market, and keep them updated. Don't tax the buildings or improvements. Just assess the land value and tax it. You'll have a much better place to live and do business. Not so good for speculators, but what do they contribute, except to political campaigns, anyway?