Court Ruling on Prop. 13

Your editorial (June 19) said “the dialogue about reform should begin immediately.” I am happy to help.

You said the ruling leaves two problems unsolved--tax equity and government revenue. The fairness complaint reflects a misperception of how the real estate market operates. Differences in operating costs--whether for utilities or commuting or taxes--are reflected in lower prices. If I buy a car that gets only five miles per gallon, my gasoline bill will be higher than my neighbor’s. I will not go to the Supreme Court; I will reduce my offer for the car. Isn’t that fair?

There is neither horizontal nor vertical inequity. For their tax abatement, long-term owners sustain an offsetting capital loss; they have to sell for less to high-taxed newcomers. There are no “squires.”

The revenue issue is real, and property services should be financed by property taxes. The solution is not outright repeal but a local option surtax, leaving desired exemptions in place.

WALLACE F. SMITH, Professor, Haas School of Business, UC Berkeley