Billionaire Steyer Slams ‘Trump Loophole’ That’s Actually Prop 13

Tom Steyer, who ran for California governor, branded Proposition 13 as a billionaire-friendly tax break on his campaign website, claiming it allows wealthy commercial property owners to dodge taxes based on actual property values. In debates, he characterized the measure as a corporate giveaway rather than what it actually is: a decades-old constitutional amendment protecting California residents from runaway property taxation.

During a CNN gubernatorial debate, Steyer vowed to call a special election on his first day in office to eliminate what he termed a corporate real estate tax loophole worth over twenty billion dollars, insisting that California government requires additional revenue.

The Truth About Proposition 13

As New York Post reports, Steyer’s own campaign website acknowledged that his so-called loophole traces directly back to Proposition 13, which was designed to prevent homeowners from being taxed out of their properties when values increased. That admission, however, omitted crucial context about the measure’s origins and purpose.

Proposition 13, officially known as the People’s Initiative to Limit Property Taxation, passed in 1978 during the high inflation years of the Carter administration. California residents faced the genuine threat of losing their homes to skyrocketing property taxes. The measure froze property taxes at one percent of assessed value and capped annual increases at two percent from that baseline.

Then-Governor Jerry Brown initially denounced Proposition 13 as fraudulent and a rip-off. Yet after voters approved it by a commanding sixty-five to thirty-five percent margin, Brown reversed course, acting as though he had championed the proposition all along and declaring himself a born-again tax-cutter.

Politicians Target Small Business Protections

The measure does apply to commercial property, which forms the basis of Steyer’s complaint. He specifically cited a Trump-owned building on California Street in San Francisco as evidence of a massive corporate tax giveaway. As the New York Post notes, tax limitations are fundamentally different from giveaways, just as tax cuts do not constitute government handouts.

Edward Ring of the California Policy Center highlighted that small businesses including restaurants, construction companies, trucking firms, and repair shops also own commercial property. The protection against tax increases enables these California small businesses to compete with major corporate chains. Without Proposition 13’s safeguards, many would likely shut down or relocate to more business-friendly states.

Voter Protections Under Assault

Proposition 13 established a two-thirds supermajority requirement for state and local tax increases. Proposition 5 in 2024 sought to lower that threshold to fifty-five percent for local bond measures. California voters rejected it by roughly fifty-five to forty-five percent.

Another ballot measure never reached voters at all. The Taxpayer Protection and Government Accountability Act, scheduled for the 2024 ballot, would have required voter approval for all new taxes passed by the Legislature and two-thirds voter approval for new special tax increases. The measure would have forced politicians to clearly outline how tax revenues would be spent before enacting any new tax or fee.

Despite gathering nearly one million signatures and qualifying for the ballot, Governor Gavin Newsom and former Governor Brown successfully pressured the state Supreme Court to remove the measure from the ballot, effectively disenfranchising voters on the issue.

Middle-Class Homeowners at Risk

Proposition 13 bears no relation to any Trump policy, and California’s financial troubles stem from a political class committed to high taxation, restrictive regulation, and disregard for ordinary citizens, according to the analysis.

While Steyer positioned himself as targeting Trump, corporations, and fellow billionaires, any weakening of Proposition 13 would ultimately lead to its disappearance. The hardest-hit victims would be middle-class homeowners who depend on its protections against being taxed out of their properties.

Without Proposition 13’s constraints, more California workers and families would join the ongoing exodus to lower-tax states that has already drained population and economic activity from the Golden State.

With information from New York Post