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Friday, April 21, 2006

Property tax saved San Francisco after the 1906 eathquake, Economic Principals reports today: "How exactly did single tax work its magic in San Francisco? In modern-day language, it solved a coordination problem. It forced people to get the most out of the land by building on it." Mason Gaffney at UC Riverside is advocating a similar regimen for New Orleans today. Property tax could not be raised in San Francisco or any other California city today because it is capped by Proposition 13. My professors at Berkeley blamed that 30-year-old voter initiative for the deterioration of the state's schools. As it happens, legendary financier Warren Buffett agrees with them. Perhaps voters in the burgeoning Central Valley can be convinced to accept a partial repeal of Proposition 13 for dense urban districts like downtown San Francisco, Oakland and Los Angeles. After all, who is going to fight to limit property taxes on the large corporations and rich yuppies who live downtown?

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