Now you can use INewsSource,org's application to find out if you are paying Mello Roos taxes, and how you compare to those neighbors and corporations. ( http://maps.inewsource.org/mello-roos/ )
This series of reports from KPBS in San Diego begins to demystify the system, but fails to mention key issues about how corporations and family-trusts avoid paying their fair share of property taxes, by creating shell-corporations that own real-estate property, but avoid taxes.
California doesn't have a Budget Deficit it has a REVENUE TAX LOOPHOLE!
Since 1978, California Corporations have avoided paying property taxes by using a giant tax-loophole provided in Prop. 13.
Many people know that Proposition 13, protects homeowners from large increases in their property taxes due to California's huge average annual increase in property values, and since property owners vote, they like this protection. What most don't realize is that this same property tax exemption is available to corporations, and corporations never die.
This is how it works, when a developer builds a new property, like a shopping mall or an office building, they create a 'SHELL CORPORATION" that owns that property. Now here is the crucial part, in CALIFORNIA Property Taxes are ONLY REASSESSED WHEN THE PROPERTY IS SOLD. The corporate ownership can change via sale of stock, but the corporation continues to own the property forever. The property never legally changes hands, and thus it is never reassessed.
In this way anyone can incorporate their real-property and avoid property taxes as your property values increase. Unfortunately for most of us, this plan only makes economic sense if your property is worth over about $1-million dollars.
Now most people like Prop. 13, as they believe it saves them money, but that is a myth. The average homeowner moves every 5-7 years, so when they sell and move both they and the buyer are reassessed and they must pay taxes at the current property value. However, Corporations can change hands every day, yet their property will never be re-assessed, and corporations live forever.
Now Property-Taxes in other states are re-assessed every year (or every few years), and they pay for basic public infrastructure: Schools, Hospitals, Libraries, Emergency Services. This may be why, in California, such public infrastructure is currently being underfunded and eviscerated.
Property tax revenue dropped by half when Prop. 13 was first instituted, and today the estimated annual revenue loss to the State of California is approximately $40-billion/year. Strangely, this is about the same as California's current budget deficit.
For more information about how to correct this problem and close the loophole, goto:
PROP13 Close the Loophole
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