No to yet another tax on Angelenos
United to House L.A. has turned in 98,171 signatures to the Los Angeles City Clerk's office in an effort to qualify a ballot initiative that would impose a huge new tax on highvalue real estate sales in Los Angeles and use the money to pay for homelessness and affordable housing programs.
Any property valued at between $5 million and $10 million would be hit with a 4% transfer tax when sold. Properties valued above $10 million would be charged 5.5%.
The proponents, a coalition of labor unions and activist organizations advocating for tenants' rights, immigrants and homeless service providers, call their proposal a “mansion tax,” but the measure is also a sharp tax increase on sales of multi-family housing, retail stores, office buildings, supermarkets, self-storage facilities, shopping malls, car dealerships and any other property valued above $5 million. The cost of buying these properties would be 4% to 5.5% higher if the measure qualifies for the November ballot and is approved by a majority of voters.
Although the state constitution, specifically Proposition 13, requires local taxes for a special purpose to receive the approval of two-thirds of voters in order to take effect, state courts have recently carved out a loophole by asserting that a tax increase proposed by a citizens' initiative is different than one proposed by a government body such as the L.A. City Council, and needs only a simple majority.
The measure needs 61,076 valid signatures to qualify for the ballot. If certified by the city clerk, the City Council has 20 days after certification to adopt the proposed ordinance without an election; alternatively, the council could call a special election or request consolidation with the state's General Election. Proponents may withdraw the petition at any time prior to certification by the city clerk.
If the measure does make it to the ballot, voters should say no to this estimated $875 million annual tax increase on real estate sales, which would throw more money at the same failed policies wasting billions of taxpayer dollars already. The costs of tax increases on commercial property are borne by the tenants and customers who patronize those businesses. L.A.'s cost of living is already too high, and raising it further is the wrong way to address poverty.