Rex Hime paves way for split rolls

Steven Greenhut: Rex Hime is president of the California Business Properties Association, a trade group representing commercial property owners, and someone who is adamantly opposed to the split-rolls tax, which would remove Prop. 13 protections from commercial property owners. Yet Hime and his association’s position on another issue — the Internet sales tax — can actually pave the way for the higher taxes he opposes. The California Retail Association also is celebrating the so-called Amazon tax hike, which gives us all political incentive to avoid these tax-hiking businesses and spend our money at online alternatives.

Hime should be happy now that Gov. Jerry Brown signed the Internet sales tax law Wednesday. As the Sacramento Bee reported, “The law is expected to raise more than $200 million in new revenue by requiring online retailers to charge sales tax for California customers. It’s also designed to level the playing field between brick-and-mortar retailers, who’ve been collecting sales tax all along, and out-of-state Internet merchants.” Of course, it might raise nothing at all as Internet retailers such as Amazon and Overstock sever their relations with their California affiliates who send business their way.

Here’s what Hime wrote in Flashreport before the governor signed it into law: “It’s tough enough for small businesses to operate in this economic climate. This is why the California Business Properties Association is supporting e-fairness legislation that will support small businesses in this state and update the law. In this economy, it is more important than ever to support the small businesses that are essential to our state’s economic recovery.”

Translation: The way to improve the business climate is to raise taxes on Himes’ competitors. Here’s where this ties into the split rolls and other Democratic-inspired tax-raising schemes. Such schemes always are advanced as a matter of fairness. Supporters of the split roll claim that the businesses that Hime represents unfairly exploit loopholes in Prop. 13 to avoid paying their fair share of property taxes.

One initiative to institute the split roll is called the Split Roll Property Tax Fairness Initiative and it makes this point: 

WHEREAS, the assessment system for non-residential commercial property is the most significant failing in our tax system, costing local governments and schools $4-5 billion annually,  allowing corporations, banks and other non-residential commercial property owners to take advantage of loopholes to avoid reassessment even when property changes ownership, putting the burden of taxation on new investment and development instead of on the windfall from land ownership, the exact opposite of the principles of a good tax system, discouraging local governments from investing in new infrastructure or other public services, forcing local governments to plan big box retailing projects to generate sales tax over job-generating smaller commercial business developments, discouraging infrastructure investment while promoting sprawl and speculation by  driving down the cost of keeping infill land or other vacant land off the market until speculative gains can be achieved; …

In other words, the initiative to impose the split rolls uses similar arguments Hime uses to advocate what he calls, in Orwellian fashion, e-fairness legislation.

When members of the business community support tax increases on others as a way to promote fairness, they open themselves up to calls to increase taxes on themselves in the name of fairness. They abandon any principled opposition to taxes. Indeed, this is a huge flaw among the state’s moderate business community, which has long supported Democrats and has often backed tax hikes (on others) and almost always avoids principled arguments against big government or in favor of property rights.

These rent-seekers are happy enough to lobby for a few protections for themselves and eagerly use their power to harm competitors. They don’t care much about the freedoms we are losing in this state as long as they can play the system and get specific advantages for their group. They seem much like the businesses mocked by Ayn Rand in “Atlas Shrugged” — the looters who don’t care much about entrepreneurship, but who are about politics and power instead.

Based on Hime’s own arguments, the main goal of the state’s tax code is fairness, not freedom or enterprise. So if the Left can show that Prop. 13’s protections for commercial business owners are unfair — and it unquestionably is true that these owners manipulate the system to avoid reassessments — then there should be no reason not to raise taxes on them and to make the system more equitable and to bring in more money to the state. Moderate business types often show concern about bringing in more money to the state government.

Just for the record, I am adamantly opposed to split rolls. I am opposed to giving the government more money and to imposing new burdens on any of the state’s hard-pressed businesses. The more Hime and others like him take the approach they are taking, the harder it is to make a rhetorical case against tax hikes. These short-sighted businesses are paving the way for their own demise.

JUNE 30, 2011