Owen Zidar (Princeton) and Eric Zwick (Chicago Booth) have a new Op-Ed in the New York Times titled “There’s a Much Better Way to Make Rich People Pay Their Share.” From the piece:
Policymakers keep adding groups to the list of loophole beneficiaries: incumbent homeowners, venture capital and private equity partners, everywhere millionaires, heirs and, in the case of Prop 40, everyone worth less than $1 billion. At the other end of the spectrum, tipped workers, contractors, overtime workers and older people now benefit from additional tax exclusions. If everyone feels that someone else is getting a better tax deal, it undermines faith in the entire system and makes everyone more resentful about participating.
For both these reasons and more, if California voters are looking for large reservoirs of undertaxed wealth, a much better, bigger target lies right beneath their feet.
The original sin underlying California’s tax structure is Prop 13, the 1978 law that rewrote the rules of property ownership. Getting rid of it would be a more efficient and durable way to make the rich pay their fair share.
