The property tax in California, Proposition #13, affects one percent of the full cash value of real property. That amount taxed, the one percent, is then collected by the counties in California and distributed to the districts within the Californian counties. This is all done according to the California Constitutional law. In addition, the tax is ad valorem, meaning that the tax is a flat percent of the sales price of the property. For example, the ad valorem tax would be on the total amount of square feet sold in the case of land property, rather than a tax on each individual square foot. Funds that are taxed from the property after selling are limited to 1% on the selling of that property and then increases to the tax is limited to 2% each year. This proposition protects landowners from large increases on property tax.
The Stelly Plan in Louisiana, drawn up by Vic Stelly, a Republican from Lake Charles, caters to increase income taxes and decrease the dependency on sales tax. The reason argued for this change in tax structure is that the sales tax is not growing as fast as the cost of living in Louisiana is. A good example of this is the amount of sales tax there is on a pack of cigarettes verses how much it costs to buy a home. I would not believe that one cent on the dollar can make up for the amount a home in uptown New Orleans costs, which is steadily increasing as the demand for that living area increases. With the Stelly Plan, as people make more money, they can be taxed a proportional amount of money on their homes, assuming that it is a number that they can afford. The tax increase on income would grow over time, paralleling people's income and would reduce approximately 84% of the taxes that Louisiana homeowners pay now.
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