Letter From America from the August 1978 issue of the Socialist Standard
The state of California has long been known as a hatchery of unusual religious and political movements. The list is a long one even in the lifetime of the average senior citizen today. Now, lightning strikes at the California ballot boxes in the form of a tax revolt, dubbed by its instigators a modern version of the Boston Tea Party, directed against property tax rates and Government spending, and ordaining limits on such rates so low as to shake the political structure of the State to its roots and put fear into public employees from coast to coast. The thunder from that first bolt, and others to come, will reverberate long before subsiding. It represents a cry from the hearts of masses of workers who have not yet learned the real cause of their misery and who are bringing joy to a section of the capitalist class — big property owners — providing them with windfall profits such as they have not seen in many a moon.
The effect in California was quick: noticeable numbers of state, county and municipal workers received immediate “pink slips” (dismissal — Ed. Comm.) and most other public employees are on an unofficial “red alert”; summer classes in schools have been cancelled along with other, social, programmes; some localities have even lost their fire stations, which now sport posters advising: "If your house is on fire call Jarvis” (leader of the movement and co-sponsor of the so-called Jarvis-Gann Amendment). The extent of the cutbacks may have been exaggerated since the State politicians are sitting on a huge tax surplus which will be parcelled out in relief to the communities. But the message, nevertheless, seems clear. There is widespread disapproval among employed workers of the “fat” in State services, generally, and welfare programmes in particular. The crux of the problem, according to popular misconception, is Government mismanagement of the monies milked from long-suffering tax-payers with whom the working class strongly identifies. Does the working class really pay taxes, if not directly on a home then indirectly through higher rents, not to mention everything else they buy and through the withholding on their pay? Before discussing this question a brief explanation of the American elections system may be in order.
Presidential elections are four years apart but one-third of the US Senate, 100 per cent, of the House of Representatives, a percentage of state Governors, and other political state officers are up for grabs every two years. Besides the regular elections in November, however, many of the states have primary elections earlier in the year in which the voters have an opportunity to determine the candidates the contesting parties will field in November. Along with the political hopefuls there is usually a list of propositions (proposed amendments to the state constitution) that appear on the ballot. In the case of California, the ballot in June, 1978, carried the proposition that now limits the property tax to 1 per cent, of assessment and confronts the State apparatus with a loss of about 50 percent. of its annual revenue (some $7 billion, it is claimed). Mr. Jarvis, incidentally, is director of the California Apartment Association. He and Paul Gann, another big real estate operator, lobbied unsuccessfully in Sacramento for years for legislative action to reduce the property tax. They finally must have realised that it is easier to bamboozle the working class — a majority of the voters — than the politicians and so crusaded for the petitions needed to put the proposition on the ballot. If the politicians won’t curb their outrageous spending let us, the taxpayers, cut the spendable monies — show them who is the boss. This was the message sold to the working class of California. They bought it with gusto.
Now what about the obsession the working class has with taxes? A large number of wage and salaried workers do “own” some real estate in the form of generally heavily mortgaged homes. By far the majority of city dwellers, however, are rent-paying tenants. Do landlords really charge off their property taxes, or even most of them, in the rents? If this were true they would have little, indeed, to complain about. The fact is that landlords confront tenants in the same relationship as merchant to customer. They have a commodity for sale (the use of an apartment for a limited period) which the tenant buys. They will then get as much for their commodity as the market will bear, regardless of the bite of the tax assessors. What the market will bear is determined by the demand and the supply in the particular area. There are areas, even in California .where rents are relatively cheap because those who can afford better prefer not to live in them.
As for working-class home owners who do have to send revenues to City Hall: in the final analysis their income derives entirely, or almost so, from wages or salaries — just as is the case with tenants. As Engels puts it, concisely, in The Housing Question: “‘Taxes’! A matter that interests the bourgeoisie very much but the worker only very little. What the worker pays in taxes goes in the long run into the cost of production of labour power and must therefore be compensated for by the capitalist”. This terse statement sums it all up. Property taxes, gasoline taxes, withholding taxes? The assumption is that without them real wages would be greater.
Is the so-called modern Tea Party a harbinger of a return, nation-wide, to conditions of the Thirties? We are not prophets, or gamblers, but a safe bet would be that the monies needed to maintain some sort of adequate social services, including Welfare, will continue to be raised in one way or another for the foreseeable future. But whether more of the tax burden will be levied by the Federal Government or not, the various sections of the capitalist class will go on trying to shift the burden from one set of shoulders to another. And the workers will go on allowing themselves to be kidded into supporting one group or other of their exploiters — until they get the message that the enemy is not taxes but the wages system itself.
Harry Morrison
WSP (Boston)
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