The research for this book began with a very practical question. What would happen if the United States Supreme Court overturned the entire property tax system in California that was swept in by Proposition 13? When our research began in 1991 this was a very real possibility. Officials and staff in state government were extremely nervous. Not only would there be considerable political turmoil if Proposition 13 were overturned, but the factual basis for analyzing alternative property tax systems was scarce. There was a desperate need for research on the effects of Proposition 13 and its possible replacements.

It was in this context that we began our research. A large part of our initial task was gathering great amounts of data from the counties on sales and property tax assessments in California. But as we began this task, we also realized that we needed to address a series of broader questions as well. How do other states and countries manage property taxes? What are the reasons for property tax revolts? How does a property tax system based on the purchase price of property work? How large are the inefficiencies associated with a property tax system that creates a penalty upon sale? Who were the real winners and losers from California's unique property tax system?

This book addresses these questions as well as providing a detailed assessment of California's experience with Proposition 13. It is written for the broad audience of those interested in fiscal affairs and taxation. We explore the nature of tax revolts and property tax systems throughout the world, the nature of California's tax system, and the consequences of the tax system for taxpayer equity and economic efficiency.