It’s Not about Taxes

I live in California, and you may have heard that we’re having a bit of an argle-bargle about a budget in this state.

The history, for those who’d like it: Back in the 1970s, enough Californians felt their taxes were too high to limit property taxes by law. The limit is low, (1.5%, I thought, but wikipedia says 1%) and — this is the biggest deal — the assessed value of the property can’t increase more than 2% a year until it’s sold. The new assessed value is then based on that sale price. You’ve probably heard about property values in California. A house worth $60,000 in 1978 is worth $600,000 now, but it’s taxed at around $100,000. There’s something to be said for this in the case of retirees on fixed incomes, for instance. However, they forgot to limit it to people of limited means. It applies equally to movie stars. And to commercial real estate which can stay in the same hands forever, even when it’s sold, through the magic of shell corporations. That turns out to be a loophole big enough for the whole state to fall through. . . . Proposition 13, as it’s known, also said that any tax increase had to pass with a two-thirds supermajority. We have two, count ’em, two, Republicans more than a one third minority. So that voting bloc, in its infinite intransigence, can stop any budget from passing. The situation is not helped by a Gropinator who vetoes legislation just to show off, as far as I can tell.

(Update: I should mention that the up-to-the-minute blog for all things to do with politics in California is calitics.com.)

On to the gnarly present. As Krugman wrote, California may once again be ahead of the curve in showing what happens when a bunch of Republicans decide to play politics with the future. This is not, at this point a faults-on-both-sides situation. This is a bunch of Republicans playing politics with the future. They have made the (apparently accurate) judgment that repeating NO NEW TAXES on an infinite loop will keep getting them re-elected till hell takes over.