On Prop 13 and California's Great Democratic Tax Revolt.
Theo Johnson
10/20/2014
Prop 13
While prop thirteen provides a challenge to the finances of the state of California and its counties, it was necessary to curb back the contamination of invasive communist influenced ideologies on the minds of our children and the private property of free citizens in the California Republic. By keeping property taxes down, more financial resources are kept available to Middle Class families and landowners so that they can invest money with religious organizations, private education, business ventures, enterprise and other initiatives. Prior to Prop 13 property taxes had been used as an unending source of funds for an ever expanding role of the state in the lives of free peoples. There was no relief and even old women who worked hard their entire lives, responsibly managing their financial resources to pay for their properties free and clear of loans or mortgage-related liens were being evicted from their homes do to their inability to pay the excessively high property taxes encouraging reckless irresponsibility, state dependence and spending. Many of these confiscated properties had been family owned residences, passed from generation to generation for years. At least this is how the campaign for Prop 13 presented the issue. The purpose of this paper is to look at the facts of the matter and determine empirically and independently whether or not Prop 13 was a necessary democratic action to restrict the State and preserve the mores of our founding fathers, freeing financial resources to circulate according to the justice of the free-market, or a tax revolt detrimental to the long-term interests of the State and the People. To achieve this I will first look at the legislation, then make the strongest empirical case for the legislation and then the strongest case against it, then come to a conclusion.
Section 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.
Rolled back assessed property values to what they were worth in 1975.
Guaranteed property values could not increase more than 2% per year.
Property tax is capped at 1%.
Provisioned Property to only be reassessed upon change of ownership or new construction.
Mandated that all local and state taxes need a two-thirds majority vote.
An impartial look at the proposition’s affects is going to require looking at more than simply its affect on 1. State revenues and spending, but the 2. affordability of property taxes according to the budgets of tax payers, 3. the affects of state taxes and spending on citizens and our economy and 4. an empirical look at the places for wealth to consolidate and then be spent, as it relates to the common good of our citizens.
The passage of Prop 13 prompted an immediate property tax cut of $5 billion dollars. At a time when fuel prices were relatively high as a result of a weak foreign policy by the Carter Administration and inflation was hurting Middle Class American families, the relief from burdensome taxes was welcomed, as many California citizens were forfeiting the American Dream, selling their homes to pay their property tax bills. County spending on infrastructure, safety and curriculum that improves pupils understanding of the world, encourages healthy lifestyles and prepares the youth for tomorrows job market is necessary, but curriculum that indoctrinates them into a godless culture of state dependence, drug usage and dangerous sexual behavior while insulating teachers and school districts from accountability is a matter that needed to be defunded. While the initial adjustment for counties was obviously difficult, over time the resulting improvements to the economy ended up improving State budgets substantially.
Stephen Moore, from the Conservative think-tank, the Cato institute argues that the passage of Prop 13 marked the beginning of the conservative, anti-big government movement in the United States of America[2]. In 1978, Prop 13 passed with overwhelming public support and ushered in an era of unparalleled prosperity. In 1984 and 1985 the State of California jumped up to the 5th largest economy as measured by its GDP in the world. At the time, it produced more product as a State than either China or France! Moore accurately identifies that, “In the 10 years after the passage of Proposition 13, incomes in California grew 50 percent faster than in the nation as a whole; jobs grew at twice the national pace.” A growing economy and declining unemployment rate is a reality voters are always going to reward. The dire predictions made prior to Prop 13s passage proved false.
According to Moore, in 1991 the State of California passed a 7 billion dollar tax increase, the biggest tax increase for any state, in the history of the union, and correspondingly our state sunk into a mild recession. In real dollars, the gold rush prompted by Prop 13 fostered state budgetary increases of 75% above inflation, from $55 billion in 1980 to $97 billion in 2002. I would argue that our state has a more than adequate budget, where it needs improvement is in its send to District of Washington, return to citizens of California disparity, which is the worst in the country, along with a shift in a combination of its policies, laws and practice, along with a coordinated bi-partisan strategy on the part of our elected representatives to use our States stature and massive size to push for reforms from Washington, DC., that are geared towards significantly increasing the flow of grants for scientific research, scholarship, literary production, music recording, dance, theater, painting, photography, film and other liberal arts, while helping to make California an increasingly enticing state to incorporate in and execute substantial job creating, revenue and tax revenue generating, business operations. Attaching public benefits to some measure of production set by the recipient and monitored by the supporting agency would restore the dignity of those dependent on government or state support, developing talents that could potentially become market sustained careers. The State, county and municipal governments would be better advanced by Federal Reserve purchases of highly rated municipal GO bond purchases with freshly minted money, as long as price indexes remain stable, along with the establishment and endowment of federal education, infrastructure and business lending banks. Reforms in farm subsidies that determine subsidies according to the nutritional value of the food, along with tax increases on food products with high saturated fat content or processed sugars at the point of sale to market or restaurant would also be of value to the overall health of society, providing increases in funds without increasing property taxes. Of course, replacing all state spending geared towards the prohibition of non-violent marijuana in-state production, sale and use, with taxes comparable to tobacco as ratio of sale price would move our budget from the red to the black with a single legislative act and administrative directive.
Michael J. New argues that the biggest problem with Prop 13 is that “it failed to impose long-term discipline on state and local budgets[3].” For Californians, taxes have risen from “19.4% of personal income the year after prop 13 was passed to 24.6% today.” The percentage of income going towards income taxes is the clearest measure of affordability, as spending is believed to be determined by one's expected income, with more money, individuals spend and borrow more, leaving less available income to spend on taxes, making California families vulnerable to market cycles while placing a drag on long term economic growth. While homeowners are advised to spend no more than 31% of their incomes on housing, many people spend substantially more, carrying debt to income ratios for mortgages along at or around 45% and some, when combining other debts well up over 50%. If more than 50% of your income is going to property taxes and debt payments for housing how is the American auto industry going to expect to sell new cars, our manufactures to sell you new appliances, our entertainers to sell you tickets, farmers, food producers and cooks to sell you food, our inventors to sell you new products and innovative technologies, our universities to collect adequate tuition rates to pay for faculty and service workers to find clients? As Nada Wasi and Michelle J. White explain,“higher price of housing reduces net income, so that the marginal utility of consuming other goods rises[4].” Contrary to Marxist myth, most of America's wealthy do not draw massive salaries with predictable long-term incomes. 1 or 1.5% increase in property taxes on a home worth over a million dollars is going to be sizeable junk of money to come up with, just a one percent increase would account to an increased tax bill of $10,000 when with a standard 30 year mortgage at 4.75% rate for the value of the home, that homeowner would already be paying $6,736.00 for principal and interest every month ($2,777.77 principal + $3,958.33 interest) without including insurance and the property taxes already in place. Paying close to $80,833.33 per year for home, before $10,000 in property taxes his hard enough, but to double that amount to $20,000 or a total annual expense of $100,833.33 before insurance means you need to be pulling in around a quarter million of income every year. Most Americans that have attained that level of wealth have done so by performance based pay and leveraging assets, CEOs have increasingly had their pay attached to share price performances with banks providing loans according to the equity of various assets. While these individuals generally are very competent and work extensive hours, there is real risk of such increases in property taxes becoming the metaphorical straw that breaks the camel's back. Increased property taxes could lead to capital flight and endanger the very functionality of the economic ecosystem.
Any sensible society would encourage individuals to provide for basic needs through the market whenever possible, high income taxes tend to prevent healthy household saving practices while encouraging deficit spending which intern encourage further State dependency. Healthy economic practice on the part of the State, would encourage temporary deficit spending and fiscal stimulus in times of recession or slow economic growth, but then shift spending to investments in rainy day account portfolios providing capital to a vetted list of publicly traded companies incorporated in and creating a substantial number of their jobs in the state and then either enact buy-backs of state bonds or pay downs of debts in times of high fiscal growth.
While revenues raised from property taxes certainly can provide beneficiary spending for citizenry, it is important to look at the programs created with the funds and look at the actual effect on our citizenry. One of the counties primarily expenditures is on the Sheriff's department, which is responsible for policing and jails, but also has money that goes towards the fire department, emergency responders, county health and schools. While there is an assumed public benefit from these programs and ample job creation, policy, practice and scope contribute to whether these public services account for a public good or societal harm.
Now providing for the security of our citizens is very important and the reality that Sheriffs are elected make them the preferred source of policing for many, especially as criticism over municipally coordinated community oriented policing strategies has increased; however, there is obviously still potential for abuse. There are numerous historical instances where the populace elected either Sheriffs that were members of the terrorist group, the Klu Klux Klan and times when organized crime groups had underwrote Sheriff Campaigns in exchange for immunity and protection of their various rackets.
The Sheriff has wide reaching authorities that can be used for the good of the citizenry, effectively investigating violent crimes, criminal gangs, organized crime, fraud and other abuses, or a source for societal problems by targeting dissidents, ethnic minorities or other elements of opposition to the country club establishment's plans. In Phoenix City, Alabama in the first half of the 20th century for example, organized crime factions elected the Sheriff of their choice, who then used his formal authority to protect the gambling rackets, kidnap young women for the ransom of bail, whose payment by the bail bondsmen would then become a means of coercing them into working as prostitutes with the Sheriff's deputies bludgeoning young soldier's unable to pay their gambling debts and bar tabs[5].
There are human rights issues surrounding our jails, particularly as they have become so crowded that they begin to function as state run collective farms, something little better than an inescapable old Soviet pogrom or Russian mir. Keep in mind, you can be arrested and sent to jail without ever being convicted or even guilty of a crime. Many inmates are only allowed outside of their crowded cells twice a week for brief half hour sessions. Illnesses can sweep through jails as a result of the overcrowding and many individuals that have never been in gangs, booked on allegations of petty or non-violent crimes, then join gangs for purposes of security. While spending tax dollars to build better facilities could help relieve these realities, halting the prosecution of non-violent drug offenses is a wiser measure. Released from jail, many of these non-violent drug offenders are then discriminated against in hiring and often resort to calling their former jailhouse acquaintances for work in efforts to afford basic sustenance. More resources for the county could be used to address these issues by underwriting jail and prison reforms, building nicer facilities, but the wellbeing of inmates traditionally has not been a priority for voters and taxpayers, and better organized policing, bar association and prison guard unions often push to advance more complex penal codes that punish petty vice and impose mandatory sentencing as a means of advancing their bureaucracy’s financial interests, where more inmates historically translated to more funds, regardless of societies interests at large.
With the savings from ending the prosecution and investigation of non-violent drug related offenses, I would direct our counties to save up to overhaul our jails and the state to overhaul its prisons, with magnificent buildings painted all white with large windows and natural light, white uniforms and private rooms where consensual monogamous heterosexual relationships are encouraged, with structured prayer services, athletics, academics, career training and then entertainment as an effort to heal the souls of inmates and rehabilitate them back into the grace of the light.
The fire department has not become what it did in Bradbury's “Fahrenheit 451” and is rightfully seen as a positive force in protecting private property. That is unless, of course, property taxes are too high to pay and the fire insurance policy is profitable, nobody wants to lose their home to a fire. For the record, such actions would be criminally punishable for arson and fraud, and for those lacking a keen sense of humor, I jest to suggest. Firefighters also serve a valuable function as first responders. Still, there are financial abuses at times, such as booking and billing of extra over-time hours, occasional instances when fire fighters set fires or engaged in thefts from houses they put out fires on[6]. These are isolated instances, I am not trying to play muckraker or alleging that any of these anecdotes are ongoing or prevalent, but there still needs to be some oversight to make sure they do not happen.
Public schools are decent, most Americans can read and write, engage in arithmetic and have basic understanding of science, history and government structure; however, it is important to note that the first public school systems were developed as a consequence of French and Prussian military competition in the Era of Napoleon. Nation-states learned that they could easily sustain standing armies if they could quickly train soldiers by having them read a military manual and justified the cost of funding public education systems with improved military strength as their end-goal. Thomas Jefferson envisioned America as a country of Yeoman farmers, and to have your children away with the state, 8 hours a day certainly reduced the readily available labor to keep a small farm or shop productive and a family self-sufficient. I personally believe in the importance of our public school system, but have been impressed by the performance of children whose parents have opted for private schools, or even home-schooling. As a matter of Congressional record and a result of the research of McCarthy Era investigations, whether we care to admit it or want to cover it up, the Communist Party was quite effective at infiltrating our education board, high ranking positions in the field of psychology and some influential positions within Hollywood and the media. Common presentation of the red scare as a communist witch hunt, does not discredit the facts found by the McCarthy Era congresses. Democrats, for the most part, were equally concerned by the threat posed by Communists hiding under the democratic banner and many communists questioned in these investigations turned on their co-conspirators under questioning, largely substantiating allegations of Communist infiltration.[7] Communists have a right to free speech, assembly and opinion; however, they do not have a right to be free from religion or conspire to overthrow the government of the United States of America without consequences ranging from prosecution for sedition, treason and conspiracy. Many of these Communist Agents were benefiting from financial contributions from Russia, some were direct agents of Russia and others assets were being run by KGB agents at times with and other times without the communist provocateur's knowledge. It is also important to note, that many people absorbed these Communist influenced beliefs unaware of the harm they would cause or the origin of their ideology from within the Communist Party. I am not arguing that every state proponent or person who doesn't believe in God is a Communist. I am arguing that the citizenry has a right to elect representatives to review the curriculum and determine if the lesson plans align with American mores and values and change the curriculum when its idealism is out of balance with the realities of life. This is not a reprimand of the teachers union or board of education, as there merit, hard work and their efforts to rise to the challenge of the daunting task of education with only limited resources and systemic socio-economic problems that extending beyond their scope of control in the classroom, affect both the performance of their students and the perceived performance of their teachers.
Seemingly, despite the findings of Congress, the Communists infiltrating the education board largely achieved their goals on the education board to alter our curriculum to present our founding fathers as slave holding aristocrats, failing to mention that George Washington not only set his slaves free, put also provided them resources for their education and care. The constitution has been presented as an archaic document to be ignored, even as it persists to be the basis for American Jurisprudence. There have also been efforts to misconstrue the scientific findings of Albert Einstein and Sir Isaac Newton, who understood their studies as a study in the complexities of God's creation, as evidence that there was no God. Albert Einstein, the author of the Theory of Relativity observed, “The more I study science, the more I believe in God.”[8] Sir Isaac Newton, the man who first explained the laws of gravity and physics professed, “He who thinks half-heartedly will not believe in God; but he who really thinks has to believe in God.”[9] Even the Vatican has accepted “The Big Bang Theory,” with an understanding, that the instant of creation and the reality that all time and matter have been released from an explosive singularity billions of years ago, only advances the power of God and our innate Union with our deity and the natural universe. Arguably, public school curriculums have subtly and softly prepared the population for an ever invasive role of government in the daily affairs of citizen's private lives, along with softening American citizen's openness to the nationalization of business enterprise.
As it relates to the remarks of the Hon. AS Herlong, Jr to congress on January 10th, 1963 about Current Communist Goals, many of his assertions which were read from Cleon Skousen's, “The Naked Communist” have proved true.[10] Inequality of financial resources was depicted as injustice, as opposed to justice earned for industrious work provided under conditions of equal opportunity and equality before the law. For the record, I am not questioning that there were not extensive inequalities before the law and a lack of opportunities in the South under Slavery and later Jim Crow or that issues of racism or social economic disadvantage do not need to be addressed, I am simply arguing that a wiser curriculum would tell students the truth: this is a very competitive world and if you want to be successful, you need to work diligently to make opportunities for yourself to accumulate wealth. Playing the victim will rarely help you to get ahead in life’s race.
Psychology was used to libel and discredit honest critics and patriotic adversaries, to convince us that the evolutionary basis of our genetics should not matter, that the ability to identify self-interest and pursue it within the parameters of law and the constitution is a sign of psychopathy, that patriotism, belief in God, resolve and determination are signs of mania. Empathy, sympathy and morality were seen as signs of depression. Recent studies have shown how individuals diagnosed with clinical depression tend to have a more accurate conception of reality.[11] I've gamed out tactics long enough to identify that such APA diagnosing guidelines are written for the profit of pharmaceutical companies and to exert control over the innately free minds of Americans. Sadly, psychiatrists in the field, regularly fail to even uphold the standards of the APA, shamelessly making diagnosis' to expand the volume of monthly visits from paying clients, receiving kickbacks from pharmaceutical companies, all while prescribing addictive medications whose side-effects then become justification to layer additional diagnosis and prescribe more harmful medications in what they dub, 'drug cocktails.' These acts had nothing to do with patient health and everything to do with profiting from coerced chemical dependence. I've worked in marketing long enough to recognize that the fields of Psychology and Psychiatry have abused their understanding of the brain to master manipulative coercion, with communist regimes renowned for their use of clever propaganda to alter public opinion as opposed to reason or logic. Scripture was never written as an exact history, but anthropology and archeology has proved that almost all of the events did in fact happen, and the wisdom as it relates to God and our relationship with him and what he expects from us in our daily lives continue to be valid. Obviously, however, scripture needs to be understood in the context of the authors who wrote them and the times in which they wrote.
The field of psychology abused its understanding to convince healthy people that they were sick, that prayer or faith could not help them and then used them as test bunnies for experimental drugs with horrid side effects that they systematically concealed and covered up. Many died, others were rendered disabled and/or drug dependent do to permanent alterations in their brain chemistry. In Nazi Germany, under Adolf Hitler, every one of the victims' families who died in the holocaust, mentally ill, minority, homosexual or Jew received a very neatly drafted letter from the state providing an apology and some seemingly benign cause of death. Many were forced to participate in drug experiments for IG Farben’s The Bayer Company. Is this not what was happening on a massive scale in state hospitals during the 1970s prior to Prop 13? Nazi is only a German abbreviation for National Socialist and contemporary political science identifies the convergence of Government take-overs of businesses as the starting point of every fascist regime.
Increasingly, the trends within academia and its review of the McCarthy Era, look less at it as a communist witch hunt and red scare, rather as a lesson for government agents not to allow either sympathy or denial to prevent them from taking administrative action. These communist infiltrators and their indoctrinates used their understanding of framing and a range of libelous smear tactics and censorship to stifle debate and suppress the truth. Conspiracy is not a paranoid delusion as a liable and culpable psychologist under investigation for medical malpractice and insurance fraud may contend, rather a long-established crime to be pursued in criminal courts with evidence and testimony available to substantiate these claims as neither paranoid nor delusionary, rather instead, facts of record. The hope of the communist party was that Americans would let go of their rights outlined in the bill of rights so that private property and privacy could be done away with once and for all, so an all-powerful, unchecked, godless totalitarian state with a unity of command could do as it pleased with the soulless blank slates empty and ready for indoctrination. The godless sought to program us, viewing us as little more than cattle with disposable thumbs. If public school education is proliferating this reality, pushing for national socialism (Nazism) or communist agendas (marxist class warfare and anti-capitalist rhetoric), then the very survival of our country and its great character hinges on a dramatic shift in our educational curriculum, something funding from property taxes holds leverage for in negotiations.
The Pro Prop 13 crew’s positions entirely neglect any serious look at the effect of their pursuits on society at large, instead falling for poster children for rational choice theory explanations of bureaucratic behavior. When School districts point to poor test scores as a need for more funding, I see it as good reason to provide vouchers for private school, religious based or otherwise. Private school students have consistently outperformed public school students, despite massive subsidizing for public schools. If public and private school systems were put in competition with each other, with per-pupil spending available as a vouchers redeemable by the private schools for cash, the overwhelmed public school system could enjoy smaller class sizes and benefit from being able to scientifically and empirically review, then adopt the underpinning strategies for success prevalent at prominent private schools. With the state taxing us and spending on our children's education regardless, the parents should be allowed to access those funds to pay for the education of their children by a church based organization or private school. While there obviously needs to be standards for the curriculum, such as Darwinism taught in a science class, there is no reason scripture, tradition and morality cannot be explored in a theology class. I agree with Hegel that history has a process; however, a review of history suggests that the process is the victory of God, the Church and God's people over the morally depraved and godless losers of National Socialism and Communism. As democrats, we need not pursue the vestige agenda of Russian backed communist infiltrators, our curriculum should instead instill understanding, belief and confidence in the Anglo-American, market driven system of representative democracy and dual federalism that provided for the rise of the United States of America to its position as global hegemon, praising the courage and valor of our armed forces in their efforts to protect us from foreign Communists, National Socialists and Terrorists, while preparing us to profit in tomorrow's marketplace.
While individuals needing medicine, surgery or medical treatment should certainly be provided such, the best way for our country to improve the health of its citizens is by encouraging healthy habits of exercise, safe sex and nutrition. You ask for money for healthcare, but first you need take better care of your health. The occasional prayer cannot hurt either. I am not against Government, I am for it and believe that as citizens we are the government, I merely identify with English Liberal Philosophies exemplified by John Stuart Mill, John Locke and Adam Smith as the foundation for both Great Britain and the United States of America's prominence and sense that the education board's proposed curriculum is draining our wealth, impeding our liberty, threatening America's future and endangering our posterity. Increasing sums of money for public health services, corrections and education is not going to help if it doesn't also come with meaningful policy reform.
While State spending can help stimulate stagnant economies, it is not clear that the programs funded by property taxes and provided through the county are the ideal places to stimulate economic growth. While property taxes are generally considered good taxes in that they are broad based and assessed at equal percentages across income levels, small % increases amount to sizeable dollar amounts that can prompt home sales, which drive down housing prices, causing equity accessible for business purposes or home improvements to evaporate. Extended tenures resulting from Prop 13 have helped guide parents to avoid moving, keeping children in school districts is beneficial for those children's development. Closing deficits or increased state spending has to be balanced against its effect on the economy and the affordability of those taxes for the citizenry. Our state cannot afford to keep throwing money at sink holes, it needs to see meaningful reforms exemplifying responsibility and competency before it can justify increasing tax burdens. The better hope is for improved economic performance to result in higher tax revenues, as increased tax rates can have the adverse effect of recessing economic growth. Improved educational policy and practice, shifting policing policies and drug laws, need to come first as a hard look is taken at what changes need to be made to ensure that California is the first choice for any inspiring entrepreneur to incorporate a business. Labor law and tax policy are very influential factors as sunshine and palm trees can only carry us so far. I'd argue that the prioritized benefactor of any increases in spending should be our university and college system, a place where California continues to lead America and America continues to lead the world.
Balanced by Christianity, Capitalism is considered a just system because it rewards industriousness and enterprise, while punishing slothfulness, irresponsibility and incompetence. It is considered an efficient system because it moves wealth from irresponsible hands to responsible hands. Capitalism is a driver of wealth that can then be irrigated through markets and orderly democratic government to continue growing our country's wealth and achieving organizational goals. While the influence of money on our political system is often depicted as corruption by the Marxist influenced occupy movement, it is in fact better understood as a means of protecting our democracy from ochlocracy, our aristocracy from oligarchy and the monarchy from tyranny. The Democratic Party's continued dominance rests in our ability to create separation from both Communist movements and National Socialist movements, to continue to exemplify a better understanding of science and application of empirical findings, creating policies that take the lessons of history and scripture into account, while winning out in both markets and other measures of performance such as elections. The Democratic Party cannot be a party of anti-capitalist pacifists; rather it has to be the party of responsible policy and administration, realism and fiscal competence.
[1] www.closetheloophole.com “Close the Loophole.” Close the Loophole. Close the Prop 13 Loophole, n.d. Web. 20 Oct 2014.
[2] Stephen Moore, “Proposition 13 Then, Now and Forever” The Cato Institute (1998).
[3] Michael J. New, “Proposition 13 and State Budget Limitations: Past Successes and Future Options” The Cato Institute (2003).
[4] Margaret Anne Barnes, The Tragedy and Triumph of Phenix City, Alabama (Mercer, 2012)
[5] Margaret Anne Barnes, The Tragedy and Triumph of Phenix City, Alabama (Mercer, 2012)
[6] Prof. Jack McGrory, lecture in PA 640 at SDSU
[7] Findings in Federal Prosecutor Michael Wheat's HSEC 604, Homeland Security, Law and Society Course at San Diego State University
[8] http://withalliamgod.
[10] “The Naked Communist” W Cleon Skousen. Salt Lake City Ensign Pub. Co, 1962
[11] Alloy,L.B., Abramson,L.Y. (1988). Depressive realism: four theoretical perspectives.
The above was written for PA 640 course at SDSU taught by Prof. Jack McGory
posted by Mi vida en libros @ 1:30 PM
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