Wednesday, May 24, 2017

"A Cautionary Analogy, Although It's Kind Of Too Late, Though Hopefully Not For the Next Time"

It happened in 1979.

And again in 2016.

I think.  I could be mistakenly “off-base” with that comparison; let’s see how this turns out.  At the very least, I’ll have some needed practice writing directly to the point, as I am susceptible to extended side trips and literary extraneities, using words like “extraneities” which a red underline reports is not an actual word.  Though it should be.  And there’s my first side trip.  Which I am committed to making my last, an added incentive to keep reading:  It might be fun watching me struggle.

Now…

No, wait.

You have caught me not entirely prepared.  Please excuse me while I do some last-minute research. 

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Okay, I’m back.  And I already found a mistake.

Turns out, it did not happen in 1979.

It happened in 1978. 

Thank you Wikipedia, for allowing me to nitpick myself.

Okay, here’s the story.  During the 1970’s, the country experienced massive inflation, most noteworthily in California, and most noteworthily in California in real estate, wherein property values skyrocketed.

Based on the then-in-place California assessment formula, property taxes inevitably skyrocketed commensurately.   

And some people, particularly Senior Citizens on fixed incomes, got very angry.  (Imagine:  The irate, torch-carrying townspeople in the Frankenstein movies, but the whole country is old.)  Legitimately angry, they believed, because their property taxes had gone through the roof.  Albeit a roof that had become considerably more valuable.

But here’s the thing.  When a stock that you own goes up, you do not pay capital gains taxes on the accrued profits from that stock until it’s sold.  With property taxes, by contrast, you are required to pay on the increased assessed value of your property now. 

That’s the “Wimpy” arrangement backwards.  “I will gladly pay you today from the profits I will receive when I sell my house some time in the future.”  Minus the “gladly.”

And by the way, what if the value of your property subsequently recedes?  In that case, you paid property taxes on a house whose current value is now lower than it was previously assessed. 

It’s a legitimate problem, don’t you think? 

The California legislature seems not to have agreed, the state government doing ostensibly nothing in response to the jacked-up property tax burden generated by skyrocketing inflation.  Indisputably, some homeowners – not an ignorable amount of them though they were ignored nonetheless – were legitimately hurting.

So, along comes “Proposition 13” – “responsively” to its proponents, “cynically self-servingly” to its detractors – branded “The People’s Initiative To Limit Property Taxation” providing a revised formula for property tax assessment that was more “sensibly reasonable” – Read: slashingly lower.  And wouldn’t you know it?

It passed.

With more than 60% of the vote.

And why not?  In the stroke of a ballot initiative, homeowners’ property taxes declined, on average, an estimated 57 per cent.

“Hooray!”

Yeah, but wait.

As of 2009, primarily due to the passage of “Proposition 13”, the amount of tax revenues received by the State of California has been reduced, in aggregate, by five hundred and twenty-eight billion dollars.

So what, you say.  The government wastes money anyway.  They’ll just have to tighten their belts, assiduously cutting their budgetary allotments.

Swellerino.  Except that one of the traditional responsibilities bankrolled by property taxes is schools.  Over night, my five minutes of research reveals, “Proposition 13” cut the allotment received by the California public school system by a third. 

That’s a lot.  Now there was thirty-three percent less funding available for schools.  Think there were possible consequences?

Nope.  There were actual consequences. 

As a result of the slashed budgetary allotment engendered by ”Proposition 13” the California public school system, which in the 60’s ranked as one of the best in the country, plummeted to forty-eighth in the country.  Which, may I remind you, means forty-eighth out of fifty.  Meaning those backwater states in the South? 

A lot of them were better.

There were other collateral damages beyond the funding of public schools – libraries and public parks, for example…

AN AVIARY REPRESENTATIVE:  “Great!  We can’t read and we can’t perch.”

Still, the irate torch-carriers got what they wanted.  To an answerable degree, I believe, because the government closed their eyes and ears to a legitimate concern.

CUT TO:

2016.

The same thing…. argues this chronicler, hopefully persuasively.

Resulting, though admittedly not exclusively, from international trade policies, a substantial constituency is hurting financially.  The government ignores their struggling predicament.  One candidate (at least pretends) he sympathetically “gets it”,

And “Boom!” – he is elected president.

AN AVIARY REPRESENTATIVE:  “Okay.  Now it is more than ‘Just birds’.”

Summing Up Analogically:  There is a legitimate situation.  The elected government sits on it legislative hands.  A colorful “grievance exploiter” jumps into the vacuum… 

And teachers are buying their own chalk. 

And undocumented immigrants wait for a knock on the door.

There are lots of reasons a thing happens.  The rarely mentioned “governmental inaction” deserves prominent placement on the list.

Says I.

What say the assembled readership?

“Right, or stupid?”
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Oh, my God!  It's Queen Victoria's birthday.  And I forgot to get her a present.  

1 comment:

Unknown said...

Right on, Earlo. And the same thing applies to mainstream European political parties who are in denial about the changes being wrought to European societies by massive immigration, leaving the field wide open for marginal parties preaching simplistic solutions.