WASHINGTON REPORT:Unlucky Number:Proposition 13

...What about the same sentiment elsewhere in the country...

...California taxes are ordered to revert and have reverted to one percent of the March, 1975 assessments...

...For one thing, a number of responsible black leaders, not given to knee-jerk reactions, have seriously accused the J'arvis-Gann movement of catering to racism, l~'s hard to refute the charge...

...WASHINGTON REPORT I I UNLUCKY NUMBER: PROPOSITION 13 It is a Capitol Hill commonplace that any attempt at tax reform, especially any well-announced effort to close the famed "loopholes" through which the rich slip, wealth untaxed and intact, will ineluctably result in larger loopholes for richer slippers or slipperier richies...

...In actuality the new law doesn't quite work that way...

...If residential properties have a high turnover, however, there are other properties that have a low rate of changing hands and here comes the hand-off...

...that ain't no bleep, it's an abrupt and largely permanent slide down...

...Popular and to some extent justified home-owner resentment from that situation explains a lot of the support for Jarvis-Gann in California and makes easily predictable an even deeper homeowner resentment as it is discovered that, amazingly, the realtor and businessman behind the initiative have turned out to he benefiting realty and other business a lot more than they have those distraught home-owners...

...Closer at hand, even as you read this, the television spectacular of the moment is the Proposition 13 Show, starring the proposition's progenitor, Howard Jarvis...

...What all the tumult and the shouting adds up to, therefore, is a one-time only tax windfall for homeowners...

...At any rate, if the tax-cutting fever, when it reaches Washington, had any prayer of focusing in on the biggest government cause of inflation, namely arms spending, the whole thing would be worthwhile...

...Right, it's business property that tends to stay put in the hands of the owners and at the address originally chosen...

...Clearly, a cross section of some of the most avaricious minds in the country believed immediately they could make money out of 29 September 1978:612 Jarvis, at least maintain, possibly increase, their numbers, and at the same time take credit for a public service...

...In reality, the situation more usually is one of an understaffed, underpaid guardian of the public interest surrounded and assaulted by the monster law-and-politics apparatus of a monster multinational disguising itself as the neighborhood dell Meanwhile, there had indeed been some unfairness in the growth of real pr0~rty taxes in California in recent years...

...FRANK GETLEIN...

...Governmental economy is always attractive and to some degree always possible, but if I could figure out a way to buy shares in waste and ineffciency, I'd do it like a shot, convinced the investment would be better than gold or Washington real estate, proof against any and all influences on other markets, a winner forever...

...Incidentally, one of the smartest conservative economists on the House staff says that Carter's veto of the Defense bill is the administration's most effective antiinflation move to date, although obviously that was not what was in mind...

...Moreover, the initiative also ordains that annual increases in the assessed value of real property are limited to two percent and here comes the escape clause: until properties are sold...

...Granted the turnover pattern that has developed in American housing in recent years, perhaps a little more pronounced in California than in most other places, the tax easement is not going to last long nor be of anything like permanent significance for most homeowners, present or future...

...Thus it is reasonable to anticipate that in the municipal tax history of California in the last quarter of this century, the effecfs of Jarvis-Gann on tax receipts from residential property will appear as a bleep, admittedly a somewhat drawn-out one, but one strictly programmed to get taxes back to the status quo ante after the one big break...

...The point is that Jarvis's people were able to put together an ad hoc, coast-to-coast network for their show in very short order...

...Proposition 13, or the Jarvis-Gann Initiative, is widely believed to cut back the taxes on real property and to keep them cut back...

...Granted the interest, what a pity it got and is getting fobbed off with Proposition 13...

...At that point, the assessment can and will equal the real market value newly established by the sale...

...From another point of view, it is the exhilarating liberation of corporations from their previously crimping and cramping obligations to support their municipal governments, to pay for the services they receive, just like everybody else...

...The they in that formula are largely blacks...

...The interest is out there, all fight...

...And as the federal version emerges in the new Congress next January, it is a very safe bet that the same thing will be true...

...In view of what has happened to land values in the last three years, that's a sizable cut...

...Moreover, within business, it is easier and more common for small, retail businesses to move than it is for large retail, manufacturing or financial firms to arise and go...

...The growth took place more or less in the style of the growth of the water supply of the Sorcerer's Apprentice: an automaton system set in motion impossible to stop or even modify as it chugged along handling steeply increased values unthought of when the system started...

...Even for money, television license-holders are very loath to program anything they think will drive the suckers to the nearest game show...

...Beyond marginal chipping away at good old waste and inefficiency, any real savings in government expenditures can only come from one of two places, health, education and welfare spending and armament spending...

...As it is, the real targets, nationally as locally, will unquestionably be those most in need of help, the poor, downtrodden and oppressed...

...It 'does indeed cut back property taxes levied by towns and cities for, in probably the overwhelming majority of cases, the overwhelming majority of their municipal income...

...The importance of that is unaffected by whether the show turns out to be a boom or a bomb...

...It is no coincidence that Representative Jack Kemp, one of the two sponsors of the first federal version of Commonweal: 613 Proposition 13, was also one of the impassioned advocates of overriding Carter's veto of the Defense authorization bill and of building the new nuclear carrier...

...What about the federal level...

...Especially future...

...Even by that standard, however, there has rarely been a tax reform as blatantly dishonest as California's celebrated Proposition 13...

...cut their services...

...When any regulation or taxation of the most far-flung, elaborate industrial 'empire is being considered by legislative bodies, regulatory commissions, or courts, t.he corporate argument is always couched in terms of the tiny, struggling Mom 'n' Pop corner grocery store entangled in the toils of the monster bureaucracy...

...That this permanent windfall for business has been presented and passed in the name of the small homeowner is par for the course in ehese things...

...The basic Jarvis-Gann attitude has been characterized as "Cut my taxes...

...In business and industry, quite the other way...

...It is both easier and more common for an employee to be transferred or to get a job someplace else and hence to sell one house and buy another than it is for a business of any size to move to another location, buying and selling property in the process...

...Needless to say, as social observers as various as W. C. Fields and H. L. Mencken noted years ago, neither the dishonesty nor the suicidal stupidity of Proposition 13 has prevented its passage in California, its emulation in a number of other states for the November ballot, and the appearance of federal analogues in several forms which almost certainly will take up a lot of time in the next Congress and may not inconceivably become law...

...What a further pity the defenders of fiscal sanity in California, when they finally got around to taking Jarvis-Gann seriously, counter-attacked essentially on grounds of principle and practicafity rather than on the obvious grounds that the initiative promised a lot more than it would really deliver and that most of its deliveries would be to business and industry...