Why does California charge state tax on a real estate transaction on the total amount not the profit?

California charges state tax on real estate transactions based on the total sale price rather than profit to simplify the tax collection process and ensure consistent revenue. This approach avoids the complexities of calculating capital gains for each transaction, which can vary significantly based on individual circumstances. Additionally, it helps the state maintain a steady flow of tax revenue from real estate sales, which is a significant part of its economy.