When the bottom dropped out in 2008, thanks to the recession, there were no fallbacks, and California was plunged into a fiscal mess from which it is still reeling. However, one group, while it was not intended, profited mightily — corporations.
As written, the law permits them to Advertisement transfer property repeatedly without any tax consequences because it is the company's stock that changes hands and Proposition 13 does not apply to such transactions.
That's not a loophole; it's a giant sink hole which puts the lion's share of the tax burden on homeowners.
No less a master politician than former Assembly Speaker Willie Brown, who helped write the law, now says it was a mistake and needs to be fixed. That has suddenly become possible with the Democrats now holding super-majorities in both houses that cancels out the two-thirds votes required for passage of new taxes.California needs to shift its taxes off productivity and onto the rental value of land. Starting with the most valuable land, and the most under-taxed land, is probably a good idea. Commercial sites are certainly one of the most under-taxed, but waterfront residential property may well be equally under-taxed.