Tax Revolt Is Ending Where It All Began
California’s demographic trends provide a first glimpse of what all of America will look like in the future, including the country's new attitude toward finding the revenue to pay for a more activist government. The passage of several ballot propositions last November, coupled with the increases in income tax rates just passed in Congress to avoid the “fiscal cliff, ” suggest that the anti-tax revolt, which was born in California, is now coming to an end to be replaced by a more civic-oriented attitude on the part of voters.
In 1978, Proposition 13 was passed by the voters of California who were fed up with inflation-driven, double digit, increases in property taxes, sparking a nation-wide tax revolt that Ronald Reagan rode all the way to the White House. At that time, Jerry Brown was in his first incarnation as governor of California and the Democrats controlled a two-thirds majority in the State Assembly. Proposition 13 was not only designed to limit future property tax increases for existing home owners but to limit the ability of Democratic legislators to continue to raise taxes. It did so by imposing a new constitutional requirement that a two-thirds vote in both houses of the legislature would be needed for lawmakers to pass any type of tax increase in the future.
Now, fast forward to November 6, 2012 when Democratic Governor Jerry Brown bet the fate of his return engagement as California’s governor on the passage of a ballot proposition designed to balance the state’s chronic budget shortfall by raising an additional $6 billion through temporary increases in the state sales tax (by one-quarter of a percent) and the state income taxes on high income earners. The measure, Proposition 30, passed easily, (by a 54% to 46% margin).
A ballot proposal to raise a billion dollars by closing a loophole in the way the tax liabilities of out-of-state corporations were calculated passed by an even wider, twenty point, margin. And over 80% of the 140 local school bond proposals on ballots across the state that day also were approved by voters. Not only that, but when all the votes in California were finally counted, the Democrats had won two-thirds majorities in both houses of the legislature, not just in the Assembly, but, for the first time since 1883, in the State Senate as well.
As Tony Quinn, a California Republican political analyst put it, “the anti-tax zealots who for years have been tail-wagging the old flea-bitten Republican dog. Well, now, there is no dog. Only fleas.” By the time of the 2012 election, Republican registration in California had slipped to less than 30%, from 35% just eight years ago. The state adopted an online registration system this year, adding over one million new people to the voter rolls. Only 20% of those registered as Republicans, reflecting the high proportion of young people who not only availed themselves of the opportunity to register to vote easily, but also rejected the GOP.
According to CNN exit polls, 27% of California voters this year were under thirty, up from 20% in the Obama-mania year of 2008. They voted for Proposition 30 by a 2:1 margin.
Latinos made up 23% of this year’s California voters, compared to only 18% in 2008. The Republican Party and its positions have continued to lose support among this rapidly growing segment of the electorate ever since Governor Pete Wilson used his support of Proposition 187, which was designed to deny all public services for undocumented immigrants, to ride to re-election in 1994. Fifty-eight percent of Latinos voted in favor of Proposition 30.
Right now, the state’s demographic makeup is more diverse than the rest of the country. Only 55% of the California electorate in 2012 was white compared to 72% nationally. But with the country becoming less and less white each year, it is likely that the anti-tax revolt that started in California will begin to die out across the rest of the country as these demographic trends accelerate almost everywhere in America.
The state’s election results signal the arrival of a new demographic alignment, one whose civic ethos will call for a stronger role for government and for the taxes to pay for it. If California lives up to its reputation as a national trend setter, this will soon become the majority viewpoint in the entire United States, not just in its most populous state.