[Evans, Marv]

California takes 9.33% on your capital gains when you sell a rental property. They take 3.5% of that up front. The tax payers aren't collectively on the hook for the "processing fee," only the seller of property they've realized a gain on. If tax payers were "on the hook" collectively, they'd start charging a "processing fee" for processing every ones' income taxes. In fact they'll probably start that next. So at this time a hard working investor pays the California capital gains tax and the federal capital gains tax, which accounts for about a quarter total of your hard work & investment over the years. It may be worse in other states, and will be worse when they raise the federal capital gains tax. In addition, the sale might bump you into the alternative minimum tax bracket too. Screwed, blued, and tattooed.