Abstract: Take the Rich off Welfare: Rising Taxes, Glaring Loopholes, and the Temporary Triumph of Left-Leaning Tax Populism

Josh Mound

Abstract

This paper traces the origins of the well-known late-1970s' "tax revolt" to public frustrations over rising and inequitable taxes in the 1960s and early 1970s. Most accounts of California's Proposition 13 (1978) and similar property tax-slashing initiatives portray this "revolt" as a new and surprising triumph for conservatism, fueled by a resurgent business-funded right and an anti-liberal "backlash" of middle-class whites. In contrast, my research finds that public discontent over taxes cut across lines of race, class, gender, and party affiliation; began decades earlier than is commonly believed; and was first harnessed successfully by activists on the left, rather than the right. By the mid-1970s, the left seemed ascendant and the right seemed defeated on tax issues. Grassroots groups associated with Ralph Nader and Saul Alinsky, among others, scored notable victories on state and local levels; President Richard Nixon shifted to the left on taxes in an attempt to capture the public mood; and conservatives like Ronald Reagan saw their measures defeated by voters, despite overwhelming business support. The passage of Prop 13 just a few years later, however, did not mark the triumph of conservatism. Rather, it reflected both stagflation's increasing pocketbook squeeze and the failure of both parties to enact policies that effectively addressed the public's concerns.