Yisroel Pensack: Southern California Attorney Submits Ballot Measure to Overhaul State’s Tax System

A Chula Vista attorney has submitted a proposal to the California Attorney General’s office for a constitutional amendment that would overhaul the state’s tax system via the voter initiative and referendum process.

Frank D. Walker, 58, the amendment’s author and founder of “Prosper California,” a group now forming to support the proposed ballot measure, said the reform would abolish the state income tax for individuals with annual incomes below $150,000 and cap the state income tax rate at 8 percent. Additionally, he said, the proposal abolishes the sales tax, except on tobacco products, alcoholic beverages and motor fuels, and also does away with the state’s corporations tax.

Walker said the measure, which he hopes will qualify to appear on next November’s statewide ballot, repeals the current property tax and establishes a tax of 75 percent on the fair market monthly rental value of non-exempt land, irrespective of the value of buildings, houses, other manmade improvements and growing crops, none of which will be taxed.

The proposal allows homeowners age 60 or older to defer any land-rent tax in excess of their last annual property tax bill until 2020 or until their home is sold or transferred, whichever comes first, he added.

The amendment also allows California to enact a severance tax on oil, minerals and timber, Walker said.

To qualify the measure for November’s ballot, proponents must garner 695,000 signatures of registered voters within a five-month period starting when the initiative receives an official summary statement, which should occur around mid-December, Walker said.

He said Prosper California will launch a website in early December at www.ProsperCalifornia.com.

Walker said the proposed amendment is currently under review by the State Legislative Analyst’s Office, a nonpartisan fiscal adviser. Walker said that office has indicated to him the measure, if approved at the polls, would initially raise about the same amount of revenue annually as currently raised by all levels of government in California, or about $162 billion per year, with future revenues increasing over time after the amendment takes effect.

If passed, the measure would take effect on July 1, 2011, Walker said.

“This reform will revitalize California’s declining economy and create jobs for unemployed Californians,” Walker said. “It does so by eliminating taxes which discourage productive enterprise and commerce, and by halting speculation in land which tends to lock out labor and capital from productive opportunities.

“With this new system of taxation, California will lead the nation in economic growth and will avoid future real estate bubbles followed by severe economic downturns such as experienced in California over the past few years,” he said.

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3 Responses to Yisroel Pensack: Southern California Attorney Submits Ballot Measure to Overhaul State’s Tax System

  1. Scott Baker says:

    The ballot, while more complicated than I would like, makes sense from a Geonomy/Georgist perspective. Tax the land, not production. Yes, if people are sitting on valuable, unproductive land, whether for speculation purposes or because their great-grandfather Hillmaster McLandlord, gave it to them, that is land that could otherwise be put to productive uses. Tax it until it’s either developed by the original owner, or sold off to someone who can develop it.
    What? You actually like having baronial estates chewing up land made increasingly valuable simply by population growth? How does this reward entrepreneurship and productivity? It doesn’t. What it does do, is encourage urban sprawl, distant suburbs, and land speculation of which this country is still, and forever, reeling from.
    Read George’s “Progress and Poverty” – still the best-selling economics book of all time, selling 2 million copies in its first year, 1879! Land was valuable then; it’s many multiples more valuable now – and STILL locked up by speculators who pay few taxes with their gamed negative cash flows, while collecting multimillion dollar windfalls for reselling land after sitting on it – developed or not – for a few years. We just had an example here in NYC where a developer bought former amusement park area in Coney Island, sat on it for four year and quadrupled his investment reselling it to an extorted city eager to regain its hastily sold Amusement Park land. He developed nothing, but did raze the park’s venues!
    California’s proposition 13 tax system is the most insane in the country and they are paying the price. They will crash and burn permanently unless they – and eventually, we – do something like this.

  2. Leo Foley says:

    That’s a great proposal. Lets hope it gets the necessary signatures to go forward.

  3. Brilliant! I’ve been writing letters to the editor here in Colorado Springs, Colorado pushing for the same kind of thing. Only question is . . . how to divy up the $.
    I would recommend that it be split up like this:
    one part to the state, two parts to the county, four parts to the local gov. = 7 parts total. (If the Federal
    gov. were to be included, it should get one half part.)

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