Movement Strives to Close Tax Loophole

By Teoman Tezcan

Illustration by Maytal Bach

A grassroots movement called “Make It Fair” seeks “to close the corporate loophole and rebuild California.” The loophole in question is that commercial property, or corporations’ property, is taxed based on the price at which it was sold last as opposed to its current market value. This loophole is a big part of why California has fallen from 21st to 46th in spending per student, why one in ten of its bridges is in disrepair, and why one half of its county hospitals have closed down, according to former Secretary of Labor and current UC Berkeley professor Robert Reich. California’s legislature needs to favor the masses over the affluent minority and its business interests, and this must begin with the success of “Make It Fair.”

Political Scientists Martin Gilens, of Princeton, and Benjamin Page, of Northwestern, have published a study essentially confirms that “the majority does not rule” the United States. They found that in cases where “a majority of citizens” was against a policy, but “economic elites and/or organized interests” were for it, the majority lost. Furthermore, when a majority were in favor of a policy change, “they generally do  not get it,” Thus, it’s more than likely that in fact Proposition 13 was really meant to save corporations money as it does today, to the tune of nine billion dollars, and used protecting senior citizens from displacement only as an excuse.

It may well be that the same is occurring today: the California Association of Realtors is looking to expand tax breaks for homeowners age 55 and older with a new proposition, according to an article in The Orange County Register. Realtors are specifically hoping to ease the financial burden of purchasing new homes for seniors by allowing them to be taxed at their current rate even if they moved to a new home. The article also asserts that “at least seventy percent of seniors haven’t moved in seventeen years.” Rather than socially problematic, this all strikes me as reason for the real estate industry to create further incentives for senior citizens to buy new homes so that the industry might access an untapped demographic of its potential consumers.

Some say that raising commercial taxes is bad because it detriments the growth of our economy. California’s economy alone is sixth in the world. Our nation’s economy is the greatest in the world. We have grown, and grown, and grown. If growth is so important, why haven’t people across California been reaping its benefits? It is undeniable that growth, due to the vicious cycle of money and political power, doesn’t really mean growth. It means growth for the few who are in need of the least amount of excess capital at the expense of the masses.

We are purportedly a progressive state. Will we make way for progress in our communities, without beating around the bush that is business?