Paul Krugman actually understands the nature of the crisis here in California, and he writes about it today.
Despite the economic slump, despite irresponsible policies that have doubled the state’s debt burden since Arnold Schwarzenegger became governor, California has immense human and financial resources. It should not be in fiscal crisis; it should not be on the verge of cutting essential public services and denying health coverage to almost a million children. But it is – and you have to wonder if California’s political paralysis foreshadows the future of the nation as a whole.
It’s a key point. Without the insanity of Prop. 13, making revenue so unstable and volatile from year to year, and completely inequitable, locking in older homeowners while increasing the tax burden on younger ones, the crisis would be as manageable as other states. Without the Trojan horse of the 2/3 rule for taxation snuck in through Prop. 13, the tax structure would not become the hideous, mangled beast we see today, where the effective tax rate is higher for the lowest-income Californians than for those with the highest income. And without the growing extremism of the Yacht Party, where anyone who breaks Grover Norquist’s pledge draws an effort to drum them out of the party, perhaps Sacramento would be populated with public servants who want to fix the problem instead of break it.
Krugman’s point is to sound a warning bell for the nation at large, to view the problems of obstruction and dysfunction at the state level with a wider lens. He explains that Republicans have “been driven mad by lack of power,” with the extremist rump faction predominant. But even then, he gets that California’s problems are unique.
So will America follow California into ungovernability? Well, California has some special weaknesses that aren’t shared by the federal government. In particular, tax increases at the federal level don’t require a two-thirds majority, and can in some cases bypass the filibuster. So acting responsibly should be easier in Washington than in Sacramento.
But the California precedent still has me rattled. Who would have thought that America’s largest state, a state whose economy is larger than that of all but a few nations, could so easily become a banana republic?
It’s a sad commentary, when the finest liberal columnist in America basically reassures his readers that no government could possibly be as ridiculously constructed as California’s.
was in banana republic territory by listening to our Democratic leaders, who continue to act like the system is functioning acceptably.
The state will run out of money by mid-July. Why are continuing to pound their heads against the wall trying the same ‘bipartisan’ approach that didn’t yield any results last time around.
If I’d have to guess, I’d say that Bass and Steinberg will end up pushing on the caucus a “deal” which closes the gap with Cuts (80%), Property Tax “Forced Borrowing” from Local Governments (15%), token revenue increases (5%).
…while it is true that the 2/3s requirement must go so that needed changes can be made why it must go is never really discussed.
And while it is true that some property owners are getting a break on Prop 13 they are not that numerous and the break not as important as this:
U.S. Corporations in 2004 paid 11.4% of all taxes collected. Yep, only a little over 10%. Many pay zero taxes. Do you think things have become more equitable since then?
I don’t.
And let’s not forget the other side of the equation. Who uses more state services. Granma and Grandpa in their 1960s rancher or Standard Oil’s facility at Richmond?
What do you think?
Corporate Slave State America is riveting the collars around your necks as we bloviate about the nasty old folks who get a pass on property taxes. Is that right?
I really don’t think so.
I really think there is plenty of tax revenue out there….
…if the people realized what is really going on.