CA Tax & Spend Issues Reflect National Debate

Yesterday, two articles appeared that took note of circumstances surrounding California’s taxing and spending. As the most populated state in the union that is not too surprising. However, is the national attention a reflection of how the press sees some of the coming debates in next year’s presidential contest?

On the surface, the news report in the Washington Times and the editorial in the Wall Street Journal seem centered on local California matters. But each has strains that echo in the national debate.

The Washington Times focused on the effort to change Proposition 13 by creating a “split roll” to tax business property differently than residential property. The article talked about the difficulty in amending Prop 13 in the past but suggested a change in Californians’ voting habits might make the property tax reform more vulnerable.

Others don’t see it that way. Claremont McKenna College professor John Pitney was quoted in the article. “A lot of Democrats would like to see it pass, but their messaging tends to work against it. Gov. Brown and other top Democrats have been touting robust revenues in recent months. But if government coffers are so flush, why raise taxes?”

The issue of those robust revenues was the subject of the Wall Street Journal editorial. The message from the Journal editors was to remember when past California legislatures splurged with surplus dollars only to face a day of reckoning when the economy hit a downturn.

The Journal complained that while much of the new spending is aimed at the poor, the spending programs instituted for the poor seemed to do little to relieve the problem of poverty with California maintaining the nation’s highest poverty rate. The Journal suggested the tax system was to blame for chasing middle class manufacturing jobs away.

The financial equality issue will certainly be a focus of the presidential debates. California’s experiments in searching for a solution to aid the poor through expanded spending programs will be fodder for that debate.

Meanwhile, the campaign to undo a portion of Proposition 13 is another “tax-the-rich” effort. The Washington Times observed the campaign to change the measure is focused on “giant corporations” and “America’s wealthiest commercial property owners.” This approach falls neatly into the anti-Wall Street rhetoric on the national level.

Of course, the split roll is not the same thing as attacking Wall Street. A split roll would affect all of California businesses.

The national media is interested in the themes presented by the California taxing and spending discussion. Will they sway potential voters? After all, Proposition 13 itself was the catalyst for changing the conversation about taxes in the 1980s. Those who desire to change that conversation would start with changing Prop 13.

California has often been called the bellwether for what will happen next in American political circles. How the California campaigns on taxes and spending progress (or do not progress) may once again serve that bellwether role.

Originally published by Fox and Hounds Daily

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