April 7, 2019 – By Jon Coupal, President Howard Jarvis Taxpayer’s Association –
The phenomenon of “taxuration” occurs when taxpayers are so saturated with new tax-hike proposals that they start to rebel. According to a new poll, taxuration may have finally arrived in California, if hasn’t been here already.
Last week, the Public Policy Institute of California released the findings of a survey showing that a majority of likely voters in the state aren’t very happy with the tax burdens they are forced to pay. Most Californians say the state’s tax system is unfair, which is a reversal from the same question asked in March 2017. More importantly, a solid majority of likely voters in California think they pay more taxes to state and local governments than they should.
While perception is often not correlated with reality, it appears that Californians have a fairly realistic understanding of the tax burden in the state relative to other states. According to the report, “The public’s perceptions are somewhat in line with fiscal facts: California’s state and local tax collections per capita in 2015 were 10th-highest in the nation,” citing the left leaning Tax Policy Center. Note that another think tank, the Tax Foundation, ranks California even higher in tax burden.
It shouldn’t be surprising to anyone paying attention that citizens are reaching the breaking point on tax hikes. Every day seems to bring a new big tax-hike proposal emanating from the state Capitol. Just one example that popped up this week was a proposal to bring back California’s estate tax, which was repealed by voters in 1982. Other tax-hike proposals in the mix include higher income tax rates, a water tax, a soda tax, sales tax on services and a so-called “carbon intensity” tax. (Don’t ask.)
Moreover, when the California Legislature doesn’t want to do the dirty work of raising taxes directly, it is adept at enacting statutes authorizing local governments to raise taxes. The legislature has engaged in this practice for decades since the passage of Proposition 13, starting with the infamous Mello-Roos taxes on new developments. The most recent – and dangerous – example of this is Assembly Constitutional Amendment No. 1 – which would lower the vote needed to pass a range of bonds and special taxes, including parcel taxes, from two-thirds down to just 55 percent. If approved by voters (constitutional amendments must be approved by a simple majority of the statewide electorate) ACA 1 will leave the door open to billions in new local taxes and bond debt.
And let’s not forget the tax hikes put on the ballot by progressives who never met a tax they didn’t like. Chief among these is the notorious “split roll” proposal, which has already qualified for the 2020 ballot. It would strip Proposition 13’s protection against higher property taxes from owners of business properties.
The tax-and-spend lobby will argue that Californians actually like higher taxes as evidenced by the failure to repeal the big increases in the gas and car tax passed in 2017. But the failure of Proposition 6 last November was the result of a deceptive ballot label courtesy of our Attorney General, who doesn’t hesitate to put his thumb on the scales of justice to benefit his political backers.
The reality is that Californians have likely had enough. Even PPIC president Mark Baldassare interpreted the poll results as troubled water for the tax raisers, noting, “The trends say to me that the governor and Legislature should proceed with caution when it comes to raising revenues or restructuring taxes in light of the perceived tax burden.”
That may be the understatement of the year.