Perhaps it takes a billionaire to take on other billionaires, including the billionaire in the Oval Office who is arguably making millions off a longstanding loophole in California’s state property tax law.

Democrat gubernatorial candidate Tom Steyer is calling for a ballot measure to limit the current property tax protections afforded by the state’s Prop 13 to only private homeowners. Currently, the Golden State’s 1978 ballot measure, he argues, protects not just individuals, as it was designed, but wealthy corporate owners of commercial and industrial properties at an enormous cost to the state.

Steyer did not break new ground with his call to reform the 1978 measure. As observed by the San Francisco Chronicle, Steyer simply revived 2020’s failed Prop 15 proposal that CA voters rejected after being blitzed with misleading attack ads funded by wealthy businesses and anti-tax groups.

The degree of deception behind the “No on 15” ad blitz was explained at the time by Bobbi Murray of Capital & Main in an article entitled “Cash of the Titans“. Wealthy elites, masquerading as “small shopkeepers and homeowners”, she reported, poured vast sums into the deceptive “No on 15” campaign by falsely proclaiming the measure would raise taxes on all homeowners.

California’s Prop 13, approved just shy of a half century ago (1978), protects homeowners by limiting real estate property tax assessments based on 1% of the original purchase price — as opposed to current market value — with no more than a 2% annual increase.

Depending upon location, according to an AI assessment, CA real estate market values rose between 460% and more 1,000% between 1978 and 2026. But for the Prop 13 protections, a retiree in 2026 who purchased a home in 1978, could have been hit with a property tax bill that is more than ten times greater than the property tax he or she paid in 1978. Prop 15, had it been adopted, would have resulted in the reassessment, every three years, of commercial and industrial properties worth more than $3 million based upon current market value, as opposed to the original purchase price.

Like Gov. Gavin Newsom and progressive proponents of Prop 15 at the time, Steyer does not propose altering the basis upon which Prop 13 protects private homeowners. Nonetheless, like the opponents of Prop 15 six years ago, one of Steyer’s Republican opponents, former Fox “News” contributor Steve Hilton, disengenously proclaimed that Steyer wants to eliminate Prop 13 protections for homeowners.

Likewise, a Democratic opponent, San Jose Mayor Matt Mahan, the subject of an ethics complaint alleging he illegally discussed campaign strategies with ostensibly independent PAC donors, including billionaire property developer Rick Caruso, implied as much when he tweeted that Steyer “wants to hold a special election to raise your taxes”.

In a Facebook video, Steyer asserted that approximately $20 billion in the hands of wealthy corporate interests is “hidden” behind a Prop 13 corporate property transfer loophole. Steyer wants California to capture those vast hidden sums via a new ballot measure that would be subject to voter approval.

Corporate ‘property transfer loophole’

While first time home buyers might see it as unfair that their older homeowner neighbors are taxed at a lower rate, the differential aligns with the core purpose of Prop 13: to prevent aging retirees from being taxed out of their family homes. Unlike aging retirees, corporations can exist beyond the lives of multiple generations of human homeowners. Nonetheless, Prop 13 not only extends the original purchase price assessments to the corporate owners of real property, it also provides what Steyer and others describe as a “property transfer loophole“.

Here’s an example of how that loophole works for big corporations and industrial property owners. Hypothetical corporation “A” purchased a commercial property in 1978. In 2026, corporation “A” sells a 49.9% ownership in the commercial property to corporation “B”, which pays corporation “A” at current market rates for its share of the commercial property. In that instance, the tax bill applied to corporation “B” for its percentage of ownership would be based upon the 1978 purchase price of the commercial property, as opposed to the current market value that corporation “B” paid for its newly purchased share of the commercial property.

As explained by Wikipedia:

In the above-referenced Facebook video, Steyer, while standing in front of a huge office building in San Francisco, referred to the corporate “property transfer loophole” as the “Trump loophole.”

“This building is 555 California Street,” Steyer said, “It’s worth today about two billion dollars, but it’s taxed at a much lower level because the asset value was frozen as a result of Proposition 13. Trump and his partners have shortchanged California $200 million.”

Overcoming anti-billionaire bias

Steyer is himself a billionaire. He used his own wealth to acquire an enormous advantage in the Golden State’s gubernatorial contest by purchasing an extraordinary amount of ads in support of his own campaign. So, it’s worth asking: Can we, as voters, trust what a billionaire has to say about taxes?

There’s an inclination on the part of progressives, including the author, to be skeptical of billionaires. Yet, it must be kept in mind that this nation’s most progressive President, FDR, was born into great wealth.

For what it’s worth, Steyer wasn’t. According to Forbes, he acquired his great wealth by managing a hedge fund for 26 years. He was criticized at the first of two gubernatorial debates by both Mahan and former Rep. Katie Porter (D-CA) because some of the wealth he acquired via that management came from the private prison and fossil fuel industries.

But people can change. According to Forbes, Steyer ended his career as a hedge fund manager in 2012 in order to “focus on politics and the environment.” At the first debate, Steyer described himself as a “change agent.” In a tweet afterward, he wrote that he “spent the past 15 years taking on Big Oil and corporate interests.”

The question of reliability turns largely on the credibility of the source. In the author’s view, Steyer’s progressive bona fides can be found in his willingness to admit he was wrong in 2016 when he opposed Bernie Sanders on single-payer healthcare (aka Medicare for All). Steyer now wants to make single-payer healthcare available to all California residents. Tax revenue from the elimination of the corporate property transfer loophole would no doubt help to facilitate that laudable goal.

(Note: During an April 28 Gubernatorial Debate on L.A.’s CBS affiliate, Katie Porter burnished her own progressive credentials by declaring that she, too, supports single-payer healthcare.)

The author, who, in 2016, served as a senior advisor to Veterans for Bernie, is not alone in accepting Steyer’s progressive bona fides. As the leading Democrat currently in the race, he has received endorsements from the progressive CA Nurses Association, andOur Revolution, a political advocacy group born out of Sanders’ Presidential campaign. On May 1, the economic justice Organization, Roots Action announced that it was “proud to join with Congressman Ro Khanna in supporting Steyer.”

But even if Steyer is elected Governor, that alone will not put an end to the corporate property transfer loophole. It would require yet another ballot measure — one that no doubt will trigger a third round of billionaire-funded deceptive ads. The question that hasn’t been asked, let alone answered, is whether Steyer would be willing to use his own wealth to purchase ads to counter that deception to support a new Prop 15-like reform measure.