To understand today’s tax politics, we must first take a step back. Beginning with the Tax Revolt of the 1970s, taxes have become core of modern Republican identity. California’s Proposition 13, the famed 1978 ballot initiative that locked in permanently low property taxes, was the first and most prominent victory in an anti-tax movement that became permanent doctrine for conservatives. Critics have pointed out the problems with Proposition 13, including the racialized effects of a policy that secured benefits in perpetuity for primarily older white homeowners at a time when the state was becoming more diverse. The result was cuts in schooling, public safety, and other spending, falling disproportionately on younger black, Latino, and Asian families. The tax cuts also led to the fall of California’s once-famed school system from near-top in the nation to near-bottom in spending, drastic cuts in social services, massively overpriced housing in some markets, a labor market marred by a lack of mobility, radically unequal economic growth, and dysfunction, in the words of the state’s own nonpartisan legislative analyst, across the whole fiscal system.
But Proposition 13’s ballot box success signaled to politicians everywhere that cutting taxes was popular. Ronald Reagan ran for president on a platform of tax cuts, and in 1981 made one of the biggest across the board tax cuts in history his signature accomplishment. Never mind that in 1982 and again in 1984, Reagan, pressured by resultant deficits, signed significant revenue increasing measures. Today the Reagan legacy is “tax relief,” and the politics and the ostensible policy benefits of tax cutting have become internalized on both sides of the aisle. Democrats may be less reflexively dogmatic than Republicans on taxes, but even California’s current Democratic Governor Jerry Brown, once a Prop. 13 foe, noted a few years ago that “Proposition 13 is sacred doctrine that must never be questioned.”
Democrats have long been on the defensive on the issue of taxes. But taxation is at the heart of any serious economic growth policy, and Democrats who want to win again must be ready to argue in favor of taxes.