Death of the Tax Revolt?

In the wake of Tuesday’s election results more than a handful of news stories and commentaries are reporting that the California tax revolt which began with Proposition 13 in 1978 is either dead or mortally wounded. But as Mark Twain once famously said “the reports of my death are greatly exaggerated.”

The reports may be based on wishful thinking on the part of the commentators and liberal bloggers aided and abetted by a general funk on the part of fiscal conservatives taxpayers and free market advocates who understandably are a bit down after last week.

But let’s lift our heads and take an objective view of the landscape.

First of the three tax increases on the statewide ballot the largest failed. True Mollie Munger’s Prop 38 didn’t have the backing of the all powerful public sector unions and indeed Governor Brown’s political team expended great time and treasure trashing it. But the fact is Prop 38 would have impacted millions of Californians not just tens of thousands. It crashed and burned.

Which brings up the second point. All the passage of Prop 30 proves is that millions of Californians will vote to raise taxes on a few thousand other Californians. The old saying “don’t tax you don’t tax me tax the man behind the tree” was in full play here. Brown has told the media that Californians are ready “to tax themselves.” No they’re not. They’re ready to tax anyone and anything other than themselves.

Third bribes and extortion work. The pro-Prop 30 campaign shamelessly told college students that they would get a $250 check by raising taxes on the wealthy if Prop 30 passed and conversely would pay higher tuition if Prop 30 failed. Likewise the threat of shorter school years for K-12 students effectively frightened parents into giving Prop 30 the benefit of the doubt.

Fourth all politics is cyclical. After Lyndon Johnson crushed Barry Goldwater the chattering class said that the Republican party was dead. But a Goldwater backer a former Democrat and movie star by the name of Ronald Reagan proved how wrong that prediction was. More recently in 2010 the overwhelming Republican tide had conservatives overly confident that President Obama had zero chance of reelection. The pendulum swung and it will swing again.

Fifth the notion that the tax revolt is gasping its last is based on the silly notion that the revolt itself has prevented government from collecting the necessary revenue to provide essential government services. While Prop 13 has proven remarkably successful in keeping people in their homes it never really delivered on the promise of restraining the size and scope of government in California. Had government growth been limited to increases in population and inflation as envisioned by the Gann Spending Limit in 1979 California would have a surplus and a massive rainy day fund. But the Gann limit was gutted by a coalition of government and corporate interests. We are now paying the price for California’s two decades of profligate spending.

Finally imposing a huge tax increase on a few thousand of our most productive citizens might sell well among college students and others who can’t grasp basic economics but it is another thing to take on Proposition 13 which provides enormous security for every homeowner in the state. Nothing which happened last week suggests that Proposition 13 — called the third rail of California politics — is any less popular than it has been for 33 years. (Indeed the most recent public polling suggests its popularity is increasing).

Will this stop those in political power who have an insatiable appetite for our money from at least trying to weaken Proposition 13? Hardly. We fully anticipate the attacks. Our advice however is to be careful. The third rail is still hot.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.