Despite the “worse than usual malevolent morons” in state government, Steve Hayward remains in “Krazifornia” because of natural “attractions” and something called Proposition 13. For many Californians and people across the country, that may require explanation.
Back in the 1970s some Californians, primarily seniors, were literally being taxed out of their homes. Hereditary Gov. Jerry Brown and the legislature did nothing to address this problem, but a response came in the form of the “People’s Initiative to Limit Property Taxation,” Proposition 13 on the June 1978 ballot.
This measure required that properties be taxed at no more than 1 percent of full cash value as of 1974, with increases limited to the inflation rate or 2 percent, whichever was less. Proposition 13 also prohibited the state from enacting new taxes on the value or sale of properties, and required a two-thirds vote of the legislature to increases non-property taxes. Jerry Brown denounced it as the end of the world, but the people didn’t think so.
Californians passed Proposition 13 by a landslide margin of 64.79 to 35.21. Brown then postured as though he had authored the measure and proclaimed himself a “born-again tax cutter.” Like most of what he said, that was not true.
Proposition 13 required no new state spending and no new state hires, but the ruling class has blamed it for any budgetary problems, which was also untrue. In California, taxpayer dollars must trickle down through bureaucratic sediment such as the Coastal Commission, the county offices of education, the multiple licensing agencies and so forth.
Limits on their ability to increase taxes only ramped up the rapacity of the state’s ruling class. Consider the case of Gilbert Hyatt, inventor of the first single-chip microprocessor back in 1990. Hyatt decamped to Nevada, which does not levy income tax. California’s Franchise Tax Board claimed the inventor lied about his residency and socked him with a bill of $13.3 million in back taxes and penalties.
Hyatt sued the FTB for harassment, fraud, and invasion of privacy. The battle continued until 2019, when a court ruling left Hyatt with a 1991 tax bill of $1.9 million, including interest. The ruling failed to send any new tax revenue to California and revealed that over 26 years the FTB spent $25 million in pursuit of the inventor. That was pure waste, and had nothing to do with Proposition 13.
By 2019, people were leaving California in droves. Consider the response of Assemblyman Rob Bonta, Bay Area Democrat and prime mover of Assembly Bill 2088, the California Wealth Tax.
This measure slapped a 0.4 percent tax on the portion of a taxpayer’s net worth that exceeds $30 million, and Bonta wanted the new tax to keep on taking after Californians left the state. AB-2088 would have taxed former Californians 90 percent of their in-state levy in the first year after they left the state and 80 percent in the second year, phasing out over a decade.
“For 10 years, the wealth was accumulated during their time in California [so]we believe we can do that,” contended Bonta, a Yale law alum and now California’s attorney general. Behold the benefits of an Ivy League education.
In high-tax, high-regulation California, government greed is truly fathomless and “malevolent morons” is too kind for the pillage people who run the place. As Katy Grimes of the California Globe observes, California now beats every other state for residents moving out. Were it not for a pleasant climate, Proposition 13, and family ties, many more would doubtless join them.
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