…a fact reported today in Paul Krugman’s NYTimes column. The so-called “third rail” of U.S. politics today …raising taxes. Krugman:
“The seeds of California’s current crisis were planted more than 30 years ago, when voters overwhelmingly passed Proposition 13, a ballot measure that placed the state’s budget in a straitjacket. Property tax rates were capped, and homeowners were shielded from increases in their tax assessments even as the value of their homes rose.
“The result was a tax system that is both inequitable and unstable. It’s inequitable because older homeowners often pay far less property tax than their younger neighbors. It’s unstable because limits on property taxation have forced California to rely more heavily than other states on income taxes, which fall steeply during recessions.
“Even more important, however, Proposition 13 made it extremely hard to raise taxes, even in emergencies: no state tax rate may be increased without a two-thirds majority in both houses of the State Legislature. And this provision has interacted disastrously with state political trends.”
I lived in California over 20 years, and benefited from Prop. 13. But this is one dubious trend California started that has to be reversed. It’s crazy.
As late ABC anchor Peter Jennings (A Canadian) once told me:
“Americans want all kinds of governmenyt services. But they don’t want to pay for them. Canadians are mature enough to know they don’t get something for free.”
It’s time for many U.S. taxpayers to grow up.
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