How the anti-tax movement went from fringe to mainstream

Published March 6, 2024 at 5:00 AM EST

The GOP prides itself on being the anti-tax party. But it wasn’t always that way.

In Michael Graetz’s book “The Power to Destroy,” he describes how the anti-tax movement became one of the most powerful forces reshaping American politics and society in the past 50 years.

Today, On Point: How the anti-tax movement went from fringe to mainstream.

Guest

Michael Graetz, leading expert on national and international tax law. Professor emeritus at Columbia and Yale Law Schools. He’s also the author of “The Power to Destroy: How the Antitax Movement Hijacked America.”

Transcript

Part I

HOWARD BEALE: I don’t want you to protest. I don’t want you to write. I don’t want you to write to your congressman because I wouldn’t know what to tell you to write I don’t know what to do about the depression and the inflation and the Russians and the crime in the street. All I know is that first you’ve got to get mad. You’ve got to say I’m a human being. Goddamn it! My life has value!

MEGHNA CHAKRABARTI: In 1976, actor Peter Finch played the Oscar winning role of Howard Beale in the movie Network, where he let loose one of the iconic rants in Hollywood history.

BEALE: Then we’ll figure out what to do about the depression and the inflation and the oil crisis.

(EXPLOSION) But first get up out of your chair, open the window, go and say I’m as mad as hell and I’m not going to take this anymore!

CHAKRABARTI: That same year, a man named Howard Jarvis also watched the fictional Howard Beale scream out, I’m as mad as hell at a movie camera. And Howard Jarvis knew he’d found the title of his autobiography, which he’d published three years later.

In fact, he’d found more than a book title. The California businessman and activist had found the phrase he’d transform into a national movement.

HOWARD JARVIS: After all the basis of a free country is that government must be limited. And now we’ve got unlimited government. We got, that brings unlimited taxation that either brings you into bankruptcy or dictatorship.

CHAKRABARTI: Howard Jarvis spent his entire life advocating against taxation of all kinds. And in 1978, he won his greatest victory with a California voter referendum that fundamentally shifted the way most Americans viewed government. It didn’t come without reason. In the 1960s, California was a fast-growing state.

Residents accepted higher taxes in exchange for world class services, education, and jobs. But as the 1970s wore on, inflation, oil prices, and increasing distrust of government soured voters’ moods. Rapidly rising housing prices produced a legitimate fear in many Californians that they risked losing their homes.

And that’s when Jarvis and his taxpayer revolt took aim at property taxes. The cantankerous, charismatic, anti-tax crusader appeared regularly on a Los Angeles television station in a series of debates where he lambasted critics who said reducing property taxes would devastate California. And it rocketed him to fame.

MAN #1: Is using this taxpayer revolt, homeowner revolt to really help not the homeowner really?

JARVIS: That’s phony.

MAN #1: It’s, can I finish Mr Jarvis? It’s to help the big industrial property.

JARVIS: That is the biggest phony deal!

CHAKRABARTI: In June of 1978, California voters agreed with Jarvis, by an overwhelming margin. They passed Proposition 13.

A 10-line law that limited property taxes to 1% of the initial purchase price, capped annual increases to 2% per year, and required that future tax increases could only pass with a two thirds majority in the state legislature.

We have a new revolution against the arrogant politicians and insensitive bureaucrats whose philosophy of tax, tax, tax spend, spend, spend, elect and elect and elect is bankrupt. We, the American people and the time has come to put a stop.

CHAKRABARTI: The fallout was immediate.

JERRY BROWN: We have only three weeks to act three weeks to decide multibillion dollars of fiscal questions.

CHAKRABARTI: That was then California Governor Jerry Brown announcing radical changes that state and local government would have to make. The first big hit came to the state’s system of public education.

Hank Springer, teachers’ union leader in Los Angeles foretold disaster.

HANK SPRINGER: We’re looking at laying off two thirds of the teachers in the city. We’ve lost all of our money, more than half of our money. I think it’s as serious a thing as ever in the history of this country. I think that we’re seeing the absolute collapse of our school system in Los Angeles.

CHAKRABARTI: To that, Howard Jarvis scoffed.

HOWARD JARVIS: This country is not the school system, nor the Police Department nor the Fire Department, the right to preserve the right to have property in this country. The right, the right to have a home in this country that’s important.

CHAKRABARTI: He also once remarked on NBC’s Meet the Press that, quote, the people who wrote the Constitution didn’t say life, liberty, and welfare, or life, liberty, and food stamps, end quote.

Our guest today says that is the real reason for the half century success of the anti-tax movement, which quickly spread from California to states across the country. It’s not just a fiscal movement, he says, but a social one. And one so powerful, it’s not only become sacrosanct policy in the Republican Party, but political kryptonite for Democrats, too.

Which is why, since 1978, every single president has made similar promises to most of the American people.

RONALD REAGAN: We can either declare April 15th the day of national mourning (LAUGHTER) or we can change the system.

GEORGE BUSH: And they’ll push again, and I’ll say, read my lips. (CHEERS) No. New. Taxes.

BILL CLINTON: The era of big government is over.

GEORGE W. BUSH: We must give overcharged taxpayers some of their own money back.

BARACK OBAMA: If you are a family making less than $250,000 a year, you will not see your taxes go up.

DONALD TRUMP: We want to give you the American people a giant tax cut for Christmas. And when I say giant, I mean giant. (APPLAUSE)

JOE BIDEN: Under my plans, as long as I’m president, nobody earning less than $400,000 will pay an additional penny in taxes. Nobody, not one penny. (APPLAUSE)

CHAKRABARTI: Michael Graetz joins us. He’s a leading expert on taxation law. Also, professor emeritus at Columbia and Yale University Law Schools, and he has a new book. It’s called “ThePower to Destroy: How the Antitax Movement Hijacked America.” Professor Graetz, welcome to On Point.

MICHAEL GRAETZ: Thank you, Meghna. Pleasure to be here.

CHAKRABARTI: First of all, let’s stick with California. And tell us what exactly did Howard Jarvis latch onto in California in the late 1970s that made him so effective and got Proposition 13 passed?

GRAETZ: The first thing, of course, was that housing prices were going up in California, particularly in Southern California, and then in the Bay Area around San Francisco.

And as housing prices went up, property taxes went up, and people’s income was not keeping up with it, especially among the elderly, and that may have been enough by itself to have gotten Proposition 13 over the finish line, but there were other important things going on in California.

California’s legislature had a surplus and it couldn’t decide what to do with it. And so it was sitting on a lot of money and the taxpayers thought that money should go back to them. There was a huge issue of racial transformation going on in California at the time. Many of the white students had left the schools, Latinos from the Southern border had come into California in great numbers.

And the schools had become African American and Latino, and the California Supreme Court said basically that those people in rich districts were not able to have schools that spent a lot more money than those people who could not impose property taxes. Because their properties were not valuable. And no matter how high a tax rate they had, they couldn’t match the expenditures of the rich schools.

And the California Supreme Court basically said that there had to be a very small difference. They said about $100 per pupil, between the expenditures of the rich districts and the poor districts. Which meant that people’s property taxes were paying for somebody else’s schooling. Was the view that they had.

And then of course the Supreme Court was considering the Bakke case at the time and Alan Bakke was a white applicant to the University of California. Davis medical school, and he had been denied admission and he sued. In a case that went to the Supreme Court, in which the Supreme Court said that he had to be admitted to the University of California, Davis Medical Center.

CHAKRABARTI: If I could just jump in here.

GRAETZ: Affirmative action was not permissible. You couldn’t have a quota, which the school had for minority students.

CHAKRABARTI: Yeah, so this is all the important, the critical background about the voters and particularly white affluent voters in California at the time.

But I’m curious, did Jarvis ever overtly link his anti-tax crusade or tax revolt to these social changes in California or did he not need to?

GRAETZ: I think it’s fair to say that he often used coded racial language. He always talked about us paying for them. We are paying the taxes, and they are getting the benefits.

He talked about welfare endlessly, food stamps, the undeserving poor as he kept referring to them. So he was not explicitly racist in his language. But he made it clear that who he was talking about, and he often talked about the immigrants coming into California, as well. So I don’t think there was much ambiguity about who he was, who they were.

And he also viewed, it sounds like he also viewed government as separate from the people, right? This, as you make clear in the book, this isn’t just an anti-taxation movement. This is what gives, helps give rise to a profound antigovernment sentiment amongst many Americans.

GRAETZ: That’s right. And Howard Jarvis himself had during World War II, a plant that was making mattresses. This government commandeered his latex for the war effort. It never used the latex in the war effort, and it took a long time to compensate him for the loss of the latex and really put him out of business.

And that made Howard Jarvis an anti-government zealot throughout his life. And so he was antigovernment as much as he was anti-tax.

This article was originally published on WBUR.org.