Given the explicitly anti-California nature of the tax bill, the logical retaliation is to shift taxes away from personal income and onto other sources.
Most commercial property in California is owned by non-state residents. Large office buildings and parks and retail centers are usually owned by (1) REITS (2) large public companies like Apple (3) out-of-state billionaires.
#1 and #2 are mostly owned by non-Californians.
This is good policy anyway, there are many ways corporations avoid reassessment of commercial property, and far fewer for SFH and small complexes. So year after year, the assessments paid by actual residents of California on their houses and condos rise, but those by corporations do not.
Instead of 1% of 1973 value, how about 2.5% of 2017 value on commercial property? That should raise billions to cut the state income tax.
I’ve always thought that Prop 13 should only apply to a single primary residence, and possibly one single commercial property that is owner-occupied. This would help small businesses who own their own properties, and would help shift commercial property ownership to those who do the actual work and who give value to the properties, instead of enriching landlords who, as gzz states, are often out-of-state/country commercial landlords.
The Prop 13 benefit for owner-occupied business properties could have a higher cap; instead of the 2% for residential properties, it could be 3 or 4%, though that’s not necessary. That being said, business properties are less likely to be affected by speculative activity, since rents are used to determine mortgage lending parameters for most of these properties (please correct me if I’m wrong here, HLS or other informed Piggs), so property taxes are less likely to be skewed by artificially high prices.
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