Jon Coupal- Columnist
is an attorney and president of the Howard Jarvis Taxpayers
Association -- California's largest taxpayer organization with
offices in Los Angeles and Sacramento. [go to website] [go
to Coupal index]
Tax Ratchet Effect
Taxes never seem to go away...
[Jon Coupal] 10/22/04
Those who are handy with tools will know that a ratchet is a
notched, mechanical device that allows motion in one direction
only. The phenomenon that taxes only move in one direction --
up -- is amply demonstrated throughout California on a continual
In 1996, Californians enacted Proposition 218, sponsored by
the Howard Jarvis Taxpayers Association, which required that
new or increased local taxes be approved by voters. Shortly thereafter,
Los Angeles County Supervisors placed a fire suppression tax
on the ballot in unincorporated areas of the county and in the
48 communities that contract with the county for service. The
measure, which cost the average homeowner about $50 a year, passed
with over 80 percent of the vote.
The voters believed the officials who told them the levy was
necessary to provide a high level of fire protection and they
overwhelmingly supported the new tax.
Turn the clock forward to 2004. A few weeks ago, an odd thing
happened. County Fire Chief P. Michael Freeman approached supervisors
suggesting they lower the fire tax. Because of a 10 percent increase
in property tax revenues, his department was running a surplus
and the chief wanted to cut the tax burden on each homeowner
Now, it has been said that taking a dollar from a bureaucrat
is like trying to take a piece of raw meat from a hyena, but
the fire chief has proven to be the exception to this rule. The
supervisors are another matter, and it is not surprising that
they decided to keep the money.
Here we see the tax ratchet effect at work. The voters had shown
good faith when they responded to the county's request by agreeing
to raise their taxes. Now that the county no longer needs the
entire amount, the supervisors are determined to keep the money.
This is the same board that is now promoting a half cent sales
tax increase, Measure A on the November ballot, for law enforcement.
Measure A contains a provision that would allow the supervisors
to lower the tax after seven years. Can anyone actually say they
believe this to be a realistic possibility while keeping a straight
In 1991, then-Governor
Pete Wilson tried to solve state budget crises through a number
of tax increases including a 1.25 percent
boost in the sales tax. To make the sales tax hike slightly more
palatable, a half cent was to be "temporary." Of course,
that meant that the rest was permanent. No matter, because as
soon as the half cent was ready to be phased out, politicians
came back with a ballot measure, Prop. 172, to make the half
cent tax permanent for "public safety." An expensive
campaign, which instilled fear by showing the impact of recent
wildfires, persuaded voters to approve the tax.
So a penny-and-a-quarter sales tax increase became permanent,
proving once again that over time, taxes go up, not down.
Now, Sacramento County has its own Measure A, a sales tax increase
for transportation. However, it has been argued that this is
not a new levy, but the extension of a voter approved tax that
has come to the end of its authorized term. The fact the county
residents have been paying this tax for a while may make some
complacent. If Measure A passes, it will demonstrate once again
that a tax -- once approved -- rarely, if ever, sunsets. Once
a temporary tax is in place, it may as well be considered permanent.
If anyone still has doubts about the permanency of temporary
taxes, they should take a look at their phone bill. The federal
excise tax on phone service was imposed to defray the expenses
of the Spanish American War. Unless we're mistaken, the Spanish-American
war ended a while back. But the tax still remains.
Before approving any new tax, voters would do well to remember
that the tax ratchet, in the hands of politicians and bureaucrats,
moves in only one direction. CRO
2004 Howard Jarvis Taxpayers association