Property tax is pretty essential. Huge weird distortions can happen in low property tax places. California with prop 13, the UK with it's non-existent property taxes, Vancouver, BC with it's very low property tax rates are all examples of RE gone wrong and are places with low property tax.
The problem in California is the grandfathering in of rates, rather than the fact that the tax exists. If property tax was completely removed and the state made up the shortfall in some other tax (hopefully progressive) then there'd be no market distortion.
Yeah it's not the rate, it's the %2 increase rate. Takes 35 years for the tax to double in cost. Seattle's King County has a lower property tax rate than a chunk of the bay area for example.
