To most, tax policy is boring—somewhere between the weather and cryptocurrencies. I study, teach, and write about taxes, mostly because I believe they are the price we pay for civilized society. But for decades, economists and analysts have ignored the racial effects of how the government raises revenue. And it looks as if the introduction of race into the tax equation seems to have blown things up just a bit. That’s a good thing.

This month marks the 45th anniversary of the most significant piece of tax policy in California history. Proposition 13, passed in 1978, did a number of things to keep all taxes, and especially property taxes, low across the state. It was the start of what would be called the Great Tax Revolt, which libertarians and conservatives would celebrate as a critical step to limiting the size of government. At last count, 45 states followed suit in some form—but California’s version, arguably, is the most restrictive.

Although the impact of Prop. 13 on the state’s public finance landscape is far-reaching and mostly negative, the capping of property tax assessments is its signature element. It essentially creates a property tax subsidy that increases the longer you own your home. I will spare you the math and just have you contemplate this idea: As long as the value of your home grows faster than 2% a year, you come out ahead. As a result, homeowners living in the same neighborhood, owning very similar properties, can pay vastly different amounts each year in property taxes.

Let me offer an example drawn from the real estate website Zillow. In San Rafael (Marin County), I can find a pair of three-bedroom/two-bath houses that were part of a 1960s development. They list at an identical 1,416 square feet and are about one block apart. One homeowner, who just moved into the neighborhood, paid $14,500 in taxes their first year (2021). The other owner—whose family bought the house in 1985— paid a whopping $9,000 less, with a property tax bill of $5,500. Both houses get the same level of public services—streets, roads, public safety—but one pays 2.5 times more in taxes.

That difference—the amount of tax a homeowner pays compared to the amount they would have paid if the property had been assessed at anything near market value—is what people like me call a subsidy. It is a benefit that one homeowner receives on a yearly basis simply because they have owned their home longer than their neighbor. Meanwhile, other Californians pay more in taxes to offset that difference.

Now, just comparing tax bills off the internet isn’t very comprehensive nor systematic. Which is why colleagues of mine at the Opportunity Institute and Pivot Learning collaborated on a report, “Unjust Legacy,” that examines Prop. 13 and its impact across racial and ethnic groups. They used data from the U.S. Census’ American Community Survey to compare property taxes and home values in an effort to estimate how the Prop. 13 subsidy is distributed. Their investigation found that the subsidy that Prop. 13 creates is larger for whiter, older, wealthier Californians.

The finding, when you think about it, isn’t very surprising. California is a very different place than it was in 1978. Its population is larger and much more diverse. And the Prop. 13 subsidy grows the longer you own a home–a benefit that you can pass on to your children.

Nonetheless, the reaction to the report has been swift and hot. Jon Coupal, longtime head of the Howard Jarvis Taxpayers Association—the multi-million organization that exists to defend Prop. 13—responded by offering up the argument that was the rationale for the ballot initiative in the first place: The cap on property taxes enables low-income homeowners to stay in their homes. His evidence? A woman in Texas who was forced out of her home because of high taxes. As evidence goes, it is pretty thin. In fact, in the 45 years since Prop. 13 passed, we still haven’t seen a systematic analysis to support this contention.

Dan Walters, a fixture of Sacramento politics who now writes for CalMatters, also rejected the findings of the report by arguing that income and wealth disparities among Californians “stem from multiple reasons that have nothing to do with Proposition 13.” He goes on: “White homeowners benefitted heavily from property tax limits because they were more likely to be homeowners in the first place.”

It is a position that feels a lot like the country club president who defends a lack of diversity among the membership by arguing that people of color don’t really like to play golf and tennis in the first place.

What is notable about the responses is the sense of attack embedded in their rush to defend the status quo. “The policy wasn’t designed to be racist” isn’t an acceptable rebuttal, particularly in a state such as California, where “colorblind” policies and analyses do not align with our laws and values and will continue to exacerbate inequities.

The findings of the “Unjust Legacy” report were one of a recent string of analyses on the intersection of race and taxes. A group at Stanford, working with IRS researchers, found that the IRS audited Black taxpayers at 2.9 to 4.7 times the rate of non-Black taxpayers. And, folks at the Tax Policy Center calculated that Black couples pay more in individual income taxes if they are married and white couples pay less—an annual advantage of $662 for white married couples relative to Black married couples.

We can argue all day about legislative intent, but the fact that a tax system systematically benefits one race or ethnic group over another is, at best, problematic. What could be done to change that in the case of Prop. 13? An obvious place to start is with commercial real estate. Assessing commercial properties at market rate is something that every other state does. Other options include limiting the subsidy created by Prop. 13 to a person’s first home or assessing vacant lots and homes owned by investment funds at the market rate. One more option would be to eliminate the assessment cap while expanding the state’s homeowners’ exemption—a tax break for first homes—but shielding the first, say, $250,000 in home value from taxes, making the whole property tax system much more progressive.

At any rate, I think many Californians can agree that reexamining how the government collects revenue through an equity lens is long overdue.

The post Yes, Prop. 13 Is Racist appeared first on Zócalo Public Square.

A half-century later, this Gallic version of the traffic roundabout has come to represent a grayer and grimmer France. Instead of lending carnival-like éclat to Tati’s circling vehicles, the rond-point now symbolizes the slow spiral of diminishing means and decaying hopes for Mr. Hulot’s everyman descendants. Since early November, many of these middle-class men and women, hailing mostly from the provinces, have formed a massive protest movement known as the gilets jaunes, or yellow vests, in reaction to President Emmanuel Macron’s economic policies, including increased taxes on gasoline and diesel. Wearing the bright yellow safety vests that French drivers must don when they are outside their cars on a public thoroughfare, these citizens of modest means have taken to the streets and boulevards—and particularly, the ronds-points—to protest their increasingly desperate social and economic conditions.

In fact, the rond-point has taken on both a symbolic and strategic role in these protests—one that Tati would have appreciated. Were he alive today, Tati’s Mr. Hulot might well be wearing a yellow vest, protesting the plight of the everyman amidst the circling cars of modern France.

To understand the sudden appearance of the gilets jaunes, it helps to consider the history of the rond-point itself. A familiar feature of France’s cityscapes, the rond-point has long been a source of awe and anguish to foreign visitors, particularly when, behind the wheel of a rental car, they must face the raging rapids that roar around the Place de l’Étoile and its monumental Arc de Triomphe. In fact, this particular rond-point, the brainchild of the unjustly forgotten urban planner Eugène Hénard, was the very first to be built in France. When he unveiled it in 1906, Hénard expected it would reduce the number of car and pedestrian accidents that occurred at the intersections for the dozen boulevards leading to the arch.

Hénard was proved right: ronds-points are, on average, twice as safe for pedestrians and drivers than traditional intersections. What Hénard perhaps did not anticipate was how popular his invention would prove. There are now more ronds-points than different kinds of cheese in France; for that matter, there are more ronds-points in France than in any other country. More than 30,000 pockmark the French landscape, with 500 more added every year.

But traffic safety alone does not explain the recent rash of ronds-points. City councils and mayors frequently spend significant sums of money—between 200,000 and 1 million euros—to transform the space within a traffic circle into publicity for their towns. Like three-dimensional billboards, the erection of statues or landscapes highlights local traits or wares. For example, the rond-point outside Bondy showcases a statue of black, brown, and white children, thus celebrating the Paris suburb’s ethnic diversity, while at the town of Tinchebray, the rond-point serves as pedestal for an immense rake and pail—not coincidentally, the products of the town’s single factory.

But paradoxically, the blossoming of ronds-points also measures the blight of the French middle-class dream. Since the 1960s, the rise of ronds-points has accompanied the multiplication of housing developments located outside the country’s cities. Between 1968 and 2011, the exurban population in France has grown from 9.4 million to 15.3 million, with the vast majority settling in single residence homes. This demographic bulge represents the so-called rêvepavillon, or suburban dream. Like the dream itself, the pavillon is modest: a small dwelling that is indistinguishable from hundreds of neighboring houses, built on land that once was pasture or farmland.

It is in the spaces between these exurban ronds-points where the dream has become an ordeal. As housing tracts have stretched ever further away from the cities, they have made residents increasingly reliant on their cars. The national rail company, the SNCF, has reinforced this trend by suppressing local rail lines in favor of high-speed lines between major cities. As a result, the government’s plan to increase taxes on gasoline and diesel fuel strikes a nerve already made raw by the declining purchasing power of, and rising tax burden on, what one government minister dismissively referred to as “those French who puff on cigarettes and drive on diesel.”

These are the very same French now wearing the gilets jaunes. The massive protest movement—an estimated 75,000 people blocked 580 roadways over one recent weekend—represents a dramatic shifting of the fault line between what the French sociologist Christophe Guilluy calls the métropole and périphérie. While the former is home to a highly trained and educated elite allergic to smoke and diesel, the latter is home to a struggling middle class alienated from these urban centers. This peripheral France—a socioeconomic as well as a geographic state—is, in effect, la France des ronds-points. In fact, the rond-point has now become a rampart for the yellow vests, who are underscoring that France remains a société bloquée—one dominated by the state, even as they challenge that power. By occupying hundreds of these traffic circles, they have turned them into impasses not just for cars, but also for the government as it seeks an exit from a deepening crisis.

Inevitably, the recent scenes of pitched battles between black-helmeted vandals and shield-wielding police along the Champs Élysées, amidst flaming tires and thudding tear gas canisters, claimed the world’s attention. By the early morning of December 1, the historic boulevard, covered in a wintry mist, had again become the stage for social and political upheaval. For some commentators, it is yet another reminder that the French are better at making revolutions than reforms.

But such claims simplify, if not falsify, a more complex reality. A closer look reveals that the vast majority of French have carried on the protests peacefully, at times joyously, at countless ronds-points across the country. They see them less as places of confrontation than reconciliation between those who use diesel and those who tax it. At a critical rond-point outside Gustave Flaubert’s native city of Rouen, the gilets jaunes, whose ranks are weighted towards women, have transformed the space into a camp site. Singing and chatting around a fire, the protestors are given food and support by the very commuters they are blocking.

To the north, in the Flemish town of Hazebrouck, a few dozen gilets jaunes transformed their rond-point into an open grill. Protestors chipped in to buy an entire pig, which they roasted over a fire and invited everyone, including car drivers, to share.

The post How Traffic Circles Became Ground Zero for the French Middle Class appeared first on Zócalo Public Square.

But the way that we organize our scientific research is bafflingly tribal. As a practicing scientist who has moved through large-scale industrial projects at IBM and Hitachi, as well as small-scale spin-outs, before shifting back into academia in the late 1990s, I have long been puzzled myself.

From outside the world of science, the public might imagine a system in which someone directs this enterprise, suggests what science is most important for society, and outlines what ought to get done. After all, the public pays for it, whether through our purchases, our taxes, or our charity. But this is not what happens. And ultimately, the public understands very little of the process.

A clearer sense of the greater science ecosystem is required to figure out what role science should play and how society can best make that happen. Who gets to do research in the 21st century, and why? How has it changed over time? Is science in good shape, and how can we know? When I started asking these questions I realized there’s a lot that even scientists still don’t know about themselves.

Amazingly, science is still generally “bottom-up.” We choose what research to do by encouraging scientists at universities to suggest ideas. They share these confidentially with a number of colleagues who rank them formally and select a few to fund. Much of the funding comes from taxes, and governments pass the responsibility back to the panels of scientist to decide which of their colleagues to invest these public monies in.

Scientists have long emphasized that freedom to decide what science they do is much more likely to give long-term rewards for the society that funds them. “Choose outstanding people and give them intellectual freedom” emphasized Nobel Prize winner Max Perutz as his key principle in running the enormously successful and vital Lab of Molecular Biology in Cambridge. Yet, non-anecdotal evidence supporting this argument can be hard to pin down.

A review of Nobel Prize winners in the last half-century does reveal that most had no idea what they would accomplish, and could only articulate the path that their achievements had taken many years later, in hindsight. The molecular-based light emitters that now give sparkling mobile phone screens were undreamt of by Alan Heeger, who attempted to make unpromising plastic films conduct electricity in the late 1970s. Similarly, DNA pioneers Crick and Watson just wanted to understand the structure of DNA, not to use that knowledge to fix genetic diseases or do mass screenings of cancers.

In many countries, science is strongly believed to be directly useful to society. But once again, clear economic benefit is hard to assess. Science research comes from different locations, from the industry-dominated United States (80 percent of scientists in industry) to university-dominated Spain (less than 30 percent). A common saying is that “the best form of technology transfer is the moving van that transports the Ph.D. from his or her university laboratory to a new job in industry.” In reality, the United States is littered with university technology-transfer offices built on the dream of San Francisco’s Silicon Valley—or in the U.K., Silicon Fen around Cambridge. They are now waking up to portfolios of undramatic patents no one wants.

There is a great deal we simply don’t know about the scientific ecosystem today. Even counting how big the herd of scientists actually is and whether it is growing or shrinking, has been surprisingly difficult. While we collect simple data through yearly Organisation for Economic Co-operation and Development (OECD) government surveys, this hides the complexity of who is a scientist and what they really do.

Trying to square my personal experience of the intense world of science with these answers led me to the concept of an ecosystem of science. I realized that although there were myriad discussions between scientists on specific topics, there was no overarching description of how the whole system works and what the implications are. On the whole, collectively, science is useful, but how does that square with the parts?

In the ecosystem of science there are individuals and teams, but the ideas they build, and the bridges they build between ideas, can last much longer than either the individuals or the teams. Together this produces robust and persistent scientific knowledge, an interconnected library bequeathed to future generations. But the disjointed ways this library is added to, and how much as a society we are paying for each new idea, is hardly discussed. So, for the past few years, I have been investigating the idea of the “science ecosystem” and how all the actors within it create a meshed web of constraints and networks that are making change increasingly difficult.

I’ve found that the metaphor of the ecosystem can explain not just obvious outputs like delivering technology, but also the beauty of mathematical frameworks and the pleasure in understanding black holes. Such concepts correspond to “ecosystem services,” which are the non-tangible benefits freely emerging from a properly-functioning ecosystem. As a simple example, take a forest which gives us both trees for building houses (“ecosystem goods”) but also places to walk in peace and serenity (an “ecosystem service”). This perspective makes sense of important parts of the science ecosystem that have been harder to defend from a purely economic perspective.

Understanding ecosystem effects in science makes it easier to make sense of some conundrums. For example, it seems like globalization should be a good thing for science. It ought to lead to sharing information around the planet, pushing diverse teams to collaborate, and ensuring science spending is efficiently distributed to where it is done best. But that’s not exactly what has happened.

In the science ecosystem, powerful competitors rule, so organizations ranging from topical conferences to magazines never-endingly compete to maximize their impact and evolve. This pressure has unforeseen consequences.

Globalization has now racked up the competition among scientists, among disciplines, among funders, among universities, among research journals, and among every other species in this landscape. As scientists bring up increasing numbers of their intellectual children who want to find their own niches, the esteem that each gains from their research results necessarily declines. They all strive to publish more research papers, to be noticed in the crowd, making it more difficult to discern intellectual wheat from chaff and ever harder to keep up with what is being done.

Furthermore, doubling the number of scientists (which currently happens every 20 years) does not double the number of new research fields. Researchers instead concentrate where the trendy, most-publicized ideas are emerging. These bandwagon areas become so deluged that scientists lose track of competitors’ work, and research gets duplicated, ignored, or muddled. At present, this kind of frenzy surrounds areas ranging from the stacking of atom-thick materials, to finding uses for quantum effects in IT, and other topics. This explains why dropping extra money into a hot research field is no recipe for breakthroughs.

A second unforeseen consequence of globalization is how copying “best practices” in organizing science reduces the ecosystem’s diversity, ensuring the selection of similar projects everywhere. Applying for research funding involves a panel of scientists ranking proposals sent in to them based on scores returned by a set of external reviewers fed criteria about “utility for society” and “excellence.” More and more, they choose the same things.

I have become more and more convinced of the need for continual creative anarchy, for developing new ways of encouraging science, scientists, and ideas, and for new types of institutions and research centers. One current idea is to fund a new type of scientist, more akin to curators of the web of knowledge, who trawl and correlate existing studies to identify chasms in understanding and new opportunities. Future grants requests might have to have approval from such curator teams, aided by deep AI-based reviews of our current tree of knowledge to support claims for funding. Diversity is a crucial part of a healthy ecosystem, and the resilience of science depends on finding ways to encourage it.

When I started this project, my aim was simply to map what I found. But whenever I chatted with other scientists about it, apart from their fascination at their own lack of knowledge, they demanded suggestions for changes, directions for where we should go next. But we can’t instantly solve these global systemic problems. There remains the question of who is even free enough of the constraints on the ecosystem to help drive the necessary changes, let alone what those changes should be. But finding a way to understand the system as a whole—to comprehend where we stand at present—is a good first step.

The post Why Scientific Discovery Thrives on ‘Creative Anarchy’ appeared first on Zócalo Public Square.

Barring some wild technological advance, all Californians eventually will die.

But why can’t our property tax discounts live forever?

That’s the question raised by your glorious new idea: a ballot initiative to make our state’s famously generous Proposition 13 property tax savings even more generous—and portable.

Your “People’s Initiative to Protect Prop 13 Savings” is a proposal as perfectly Californian as the Golden Gate Bridge. It provides a concrete symbol of an undeniable reality: Limiting property taxes is the fundamental organizing principle of postmodern California.

Under our Prop 13 regime, the taxable value of every California home was frozen to its value as of March 1, 1975 (when Olivia Newton-John won the Record of the Year Grammy for “I Honestly Love You”)—or whatever subsequent date Californians first bought their houses. From that original base, the assessed value of a home cannot increase by more than two percent annually—no matter how much its actual value goes up.

In this way, Prop 13 provided homeowners an ever-escalating discount on property taxes as the value of their homes rose—in effect, it created a guaranteed subsidy for homeowners. And groups like yours have made this subsidy the most heavily protected part of our state’s finances. Californians will cut public school funding, or local government services, and they will raise the state income tax or sales tax, but property tax savings are untouchable. Over time, the imperative to protect those savings has shaped the state’s overall tax and budget systems—and how Californians think about state government itself.

But is Prop 13 sheltered enough? Something so fundamental to our state can always use more protection. So your new initiative shores up a fundamental weakness in the current regime: Homeowners don’t get to keep their low property taxes forever. Tragically, they lose the human right to that discounted tax assessment once they sell their property and move on to a new home.

What an outrage! If Californians want to move to a more expensive home (the American Dream!), or relocate for a job, or switch to a condo that allows for assisted living, they have to give up the tax savings they accumulated over many years and pay property taxes at—gasp—the market rate.

Fortunately, this is an outrage your initiative would end.

Your proposal would allow anyone over 55 to sell their California house and carry those same low property taxes to their next home, no matter the new home’s market value, or its location in the state, or the number of moves they make. Your tax savings follow you, and not just your house, as long as you live in California.

This historic change would represent, to borrow a line from the Great Emancipator, President Lincoln, a new birth of freedom. Prop 13 offered limited liberty; it only protected older homeowners from being forced out of their homes by rising property taxes. Your Son-of-Prop-13 also defends the very opposite freedom; it mercifully frees older homeowners who might feel trapped in their homes by their unwillingness to surrender those property tax savings.

If your initiative passes, longtime homeowners will finally be free—to sell their homes at the huge profit they’ve run up over the years, without losing their property tax discount in the process

Your own reasons for this policy are beyond noble. By allowing people to keep their property tax savings, you’d enable more elderly people to sell their homes at a steep profit and bring those few young people who can afford to buy into the market. Yes, this would also create more sales and commissions for realtors, but I’m sure that’s just a coincidence.

No Californian, in touch with the established values of our state, could oppose such a proposal. But—forgive me—I must admit to one concern: Your plan doesn’t go far enough

So here I propose—very modestly—an amendment: Please don’t limit these property tax protections just to those who are old and alive. To express the central importance of property tax discounts in our state, every California homeowner must receive a property tax savings that is immortal.

I propose that every California homeowner be entitled to property tax savings until the apocalypse. It would be up to you—and your estate—how to exercise it. You could transfer the property tax savings—as a whole, or divided up into pieces—to whomever you want, for as long as you want.

I, for one, think of the children—especially children of longtime homeowners burdened with all that housing equity. My proposal aligns with the new federal tax bill, which limits the estate tax, thus boosting the real lifeblood of this country—inherited wealth.

Now, I recognize that not everyone in California will see the genius of my plan, or yours. For one thing, your proposal would cost the schools $1 billion, and mine would starve the educational beats of billions more. For another, critics have argued that Prop 13 is generational theft. That, in providing tax rebates to older, wealthier homeowners, it shifting more of the costs of government onto younger taxpayers. That Prop 13’s property tax limits are one reason why the state’s taxes on income and sales are so punishing. That Prop 13 does little to encourage the building of new housing the state needs. That it effectively reserves for older homeowners moneys that would be better spent on improving education and building housing and infrastructure so that California—with some of the nation’s highest rates of poverty and inequality—could create a better future.

And since your plan and mine would expand Prop 13’s tax protections, the critics say, you and I would just be making all the above problems worse.

Of course, such critics mean well, but they don’t recognize what our state has become. Don’t they know that old Californians are the future? The old represent the fastest growing demographic in our state (the proportion of Californians 65 and older should double by 2030)—while the population of children is declining. Why prioritize the education of the next generation, when so few of them will ever be able to afford to buy a home here?

Now, no plan rolls out perfectly, and mine might need a few brakes. For example, if new technologies allow Californians to live much longer, people could start hanging onto their subsidies past age 100, instead of dying and passing them on. But we could speed that transfer of property tax savings by amending the state’s aid-in-dying law to allow not only a doctor but a licensed realtor to oversee an assisted suicide. This would not damage the deceased homeowners, at least tax-wise, since under my plan their discounts would be immortal.

Sure, some people would call this extreme. Some people might even suggest that my whole plan prioritizes property tax savings over all other concerns, including life itself.

Which is to say: Some people just don’t understand what California is all about.

The post My Modest Proposal to Make Property Tax Breaks Live Forever appeared first on Zócalo Public Square.

The Collier-Burns Act of 1947 created the California freeway system by substantially raising the gasoline and other motor vehicle taxes and earmarking the resulting revenues for highway construction. If you drive on freeways, you are utilizing a legacy of Collier-Burns.

State Senator Randolph Collier and Assemblyman Michael Burns both played a part in enacting the law and received the titular credit for it. But the Act would never have been passed without the leadership of then-Governor Earl Warren.

Warren is well remembered, but not as the Father of the California Freeways. His career as a California state politician is largely eclipsed by his national service as Chief Justice of the U.S. Supreme Court and the landmark decisions of the “Warren Court” in desegregation, criminal justice, and political reform. To the extent that any governor is given credit for the California freeways nowadays, it is likely to be Pat Brown, our current governor’s dad.

But the true origins of Collier-Burns are worth knowing, as they bear on today’s difficulties with building and maintaining essential infrastructure.

The story of Collier-Burns takes us to the period immediately after World War II. California’s population had grown at a rapid pace in the 1940s, from 6.9 million in the 1940 census to 10.6 million in 1950. The state’s roads hadn’t kept up with growth, given the scarce tax receipts during the Great Depression and the diversion of public resources to the war effort.

Southern California in particular already had a reputation for heavy reliance on the automobile before World War II, but neither the north nor the south had a road system that matched their car-oriented reputation. The absence of modern roads in California in the 1940s wasn’t due to lack of planning. There were plans gathering dust in drawers for a system of limited access highways with maps that look similar to what we have today. The problem in implementing these grand plans was the cost of building roads. You could float bonds to stretch out the expense. But eventually, the bonds had to be paid off. And apart from debt service, roads, once built, needed continuous funding for maintenance and repair.

The state financed major roads as one-off ventures; the Arroyo Seco Parkway, now known as the Pasadena Freeway, was partly financed by the federal government as a Depression-era jobs creation project and completed in 1940. But such financing was not enough to develop a system of roads.

Governor Warren ran for re-election to a second term in 1946. Under the state’s then-existing cross-filing system, he won the nominations of both the Republican and Democratic parties in the primary, although he was a Republican. As the nominee of the two major parties, he had only token opposition in the general election. Armed with an overwhelming victory and evident popularity, he proposed a hike in the gas tax and other vehicle fees, with the money to be placed in a trust fund and earmarked for modern road construction.

Gov. Warren faced strong opposition to his highway plan. Trucking companies wanted the revenue to come mainly from the gasoline tax, not a tax on the diesel fuel that trucks used. Utility companies wanted reimbursement for the cost of shifting the wires that were in the paths of the new roads. There was a north vs. south political split in the legislature and regional suspicion over how the proposed revenue bounty for roads would be divided. And there was a similar urban vs. rural divide.

These legislative frictions were important barriers to getting a bill passed. But the chief opposition was from oil companies that didn’t want a gasoline tax hike to be the major funding source. There were various communications from Warren supporters to oil executives trying to explain that more roads would mean more driving, more cars, and therefore more gasoline sales. But this simple and obvious proposition was strongly resisted by the oil lobby.

The result was months of conflict and jockeying in the legislature and a near-death experience for the Collier-Burns Act. Warren, rather than play a defensive game, went on the radio denouncing the oil companies as ruthless special interests. One particularly damning charge made by Warren was that California’s obsolete roads caused accidents and that those resisting passage of Collier-Burns would therefore have blood on their hands if their efforts succeeded in killing the bill.

Compromises reshaped the bill as it moved through the legislature. Warren’s proposed two-cent tax hike was reduced to 1.5 cents. One reluctant legislator was persuaded to vote for the bill in exchange for a deal on pet food labeling. In the end, Collier-Burns was enacted in late June 1947. Gov. Warren proclaimed that the new law would keep California “among the most progressive and forward-looking states in the Union.”

However, the influence of Collier-Burns ultimately extended beyond California to other states. When the Eisenhower administration took office in 1953, it envisioned a new federal road system. Originally, the administration favored toll roads as the basis of the proposed interstate system. But the California model was already influential. By the 1950s, California was the second most-populous state (behind only New York) and had a large and powerful congressional delegation. Vice President Richard Nixon was a Californian, as was William Knowland, the Republican minority leader in the U.S. Senate. As House and Senate committees considered the Eisenhower proposal, experts from California were brought in to testify.

Eventually, the toll road idea was dropped, although a provision accommodated those Eastern states that already had built toll roads. The federal bill became a larger projection of the California approach, i.e., gas tax and trust fund, and was enacted by Congress in 1956. For California, the federal bill became a matching source of money that accelerated and expanded what the state was already building or planned to build. Pat Brown was elected governor in 1958, just in time to inherit Earl Warren’s legacy in highway construction.

Of course, the same California freeways that were seen 70 years ago as a model for the nation are now heavily congested and in need of repair. Critics say the freeways encourage urban sprawl, displace public transit, and cause environmental damage. Nonetheless, Gov. Jerry Brown recently pushed a bill through the legislature to raise the gas tax and other vehicle fees for road repair and other transportation purposes. Along the way, he used some tactics to obtain the necessary votes that Earl Warren would have found familiar.

From an historical perspective, Collier-Burns was more than a state highway bill. It marked California’s entrance as a major influence in the American polity. California became seen as a model of public policy and planning. It is only natural that, after 70 years, our views regarding the freeway system that resulted from Collier-Burns would have changed. But at a time when California’s politics seem to be moving in the opposite direction from much of the rest of the country, it’s nice to look back to an era when what California was doing was what the other states hoped to emulate.

*An earlier version incorrectly referred to California State Senator Randolph Collier as Raymond Collier.

The post How California Created a Road Map for America’s Interstate System appeared first on Zócalo Public Square.

Which is why it boggles the mind that experts in Washington D.C., including the President’s senior economic advisor Peter Navarro, fail to understand this fundamental principle as it applies to tariffs and border taxes. Perhaps these experts think manna will fall when we execute trade policies that purport to close the trade deficit. But what they advocate—tariffs, currency adjustments, and other protectionist measures—is no different from Sisyphus pushing a rock up the hill only to have it roll back on top of him.

If you take Navarro’s argument at face value (and not as a populist diversion), Trump’s protectionists believe that by closing the trade gap and bringing manufacturing back to the U.S., we will grow and become wealthier and more prosperous. Navarro’s argument was presented in a Trump policy white paper written with Secretary of Commerce nominee Wilbur Ross, entitled “Scoring The Trump Economic Plan.”

In it they explain their position:

“Suppose the U.S. had been able to completely eliminate its roughly $500 billion 2015 trade deficit through a combination of increased exports and decreased imports rather than simply closing its borders to trade. This would have resulted in a one-time gain of 3.38 real GDP points and a real GDP growth rate that year of 5.97 percent.”

This is so far off the mark that it begs a little work explaining why. So let’s consider how (and if) one can close the trade gap with China and what the consequences would be were policy to be successful in accomplishing this.

In December, Trump tweeted: “Did China ask us if it was OK to devalue their currency (making it hard for our companies to compete), heavily tax our products going into their country?… I don’t think so!”

He also has repeatedly claimed that China is a currency manipulator. So, let’s suppose he convinces China to increase the value of the yuan. (Important note: China would have to be a manipulator to do this, as most people who follow foreign exchange rates think the yuan is overvalued rather than undervalued).

Presumably a yuan of higher value would make American goods less expensive for Chinese and Chinese goods more expensive for Americans. Similarly, a tariff on Chinese goods would presumably make them more expensive, discouraging imports. But the realities of trade would complicate those plans.

China’s purchases of American goods and services are mostly airplanes, machinery, earth-moving equipment, food, scrap, and education. Will the Chinese buy more airplanes if they are less expensive? Perhaps they will buy one or two, but not much more. It is not easy to integrate new airplanes into an airline. And earth-moving equipment? That depends much more on China’s infrastructure needs—and not all that much on the price offered by Caterpillar.

Food? Yes, the Chinese will buy more food, but that in turn will drive up the price of food for Americans. And education? It’s hard to say if that would have any effect, given the scarcity of higher education here. Are there really extra spaces in U.S. colleges and universities for more Chinese students?

The point of considering all these examples is this: Chinese demand is not very sensitive to price for the goods the Chinese purchase. So it would take a very large increase in prices to bring trade back in balance from the Chinese side.

But, you might counter, couldn’t we sell consumer goods to Chinese households that they do not as yet buy? Aren’t there 1.4 billion Chinese who might like a whole host of consumer goods America could produce?

Yes, but in practice, it’s hard to get people to change their behavior. For Chinese households to buy more goods, they would have to reduce their savings. And that won’t be easy. Yes, there is room for more consumption—at present Chinese saving rates are above 30 percent, which is very high. But the ruling Communist Party has found it difficult—as demonstrated by its own failed efforts to create demand for domestic consumer goods—to get Chinese families to stop saving so much.

Why? China does not have the social safety net of the United States. So Chinese families are saving to take care of their parents, to have a decent retirement, and to pay for their child’s education—and marriage. Marriage is a critically important expenditure for many Chinese families, as the one-child policy has resulted in a shortage of women for marriage. Chinese families raising a son are saving huge amounts of money to educate their child and purchase a home for him, increasing his marriage prospects. No matter how cheap North Carolina furniture is in Shanghai, Trump is trumped by the prospect of a grandchild.

Okay, so if the Chinese are not going to buy much more even if the yuan strengthens or if prices drop, then what about the U.S. purchases of Chinese goods? Wal-Mart shelves in the U.S. are full of inexpensive goods from China that Americans purchase. And yes, were the yuan to appreciate, these goods would become more expensive and we would purchase less. But a rise in the yuan would also make textiles, toys, and electronics from Malaysia, Vietnam, Indonesia, and Bangladesh—all countries with a significantly lower cost of labor than China—more attractive. As a result, we would still not close the trade deficit—we would just make U.S. consumers pay more, to cover the costs of moving the factories out of the Pearl River Delta and into Southeast Asia.

The same effect would be produced if prices were raised on more expensive goods such as iPhones and steel. India, which could produce such items at a lower cost than China, would benefit, and China (losing factories) and the United States (paying more) would be hurt, but not much else would change.

Simply put, tariffs or currency changes are only going to produce marginal changes to the trade deficit because you cannot tweet away the fundamental problem: Americans do not save enough to pay for their expenditures.

U.S. households on average save a bit over 5.5 percent of their disposable income. Take that percentage of the economy, and add corporate savings and the amount collected in taxes, and you have approximately 18 percent of GDP that is available for investment and government spending, as opposed to consumption. Investment accounts for the bulk of that 18 percent—approximately $3.1 trillion. That leaves the rest for government.

And the rest is not nearly enough to pay for all federal purchases and transfers. In fact, the U.S. is short of the money it needs for federal spending by upwards of $400 billion a year. So where do we get that money? It comes from people who sell more than they consume—like the Chinese.

So if we didn’t have a trade deficit, we couldn’t cover our spending. We would either have to increase taxes (the Republicans who control Washington want to cut taxes), save a lot more (and how could we motivate Americans to do that?), or cut government expenditures (politically impossible).

In fact, our need for people who sell more than they consume is increasing. The federal deficit is projected to grow to $1 trillion by 2023. Someone has to cover that with saving. If not the Chinese, then who? The Russians? The Japanese? The Indians?

Remember Peter Navarro’s argument. He says that economic growth will solve our problems—and cover the deficit. So let’s do a little arithmetic to check this out. Don’t worry about the math—it’s simple.

A $1 trillion deficit is about 5.3 percent of GDP. If Trump and Navarro are going to deliver the rapid economic growth they promise, corporations will be investing their additional saving to drive that growth. So if the money to cover the trade and fiscal deficits is not going to come from foreigners it must come from household saving. And to achieve an increase of private saving of $1 trillion by 2023, GDP would need to double. That would require a sustained growth rate of 10.2 percent. Historical growth has been at 3 percent, and recent growth at 2.5 percent. It’s ludicrous to believe we will grow out of the savings gap.

Is there another way? The answer is yes. But it wouldn’t be pleasant. You could, like Argentina, raise tariffs (also called import taxes) to such an extent that imports become prohibitively expensive. Doing so would completely disrupt the globally dependent automobile, construction, computer and electronics, telecommunications, retail, and manufacturing sectors and send the economy into a tailspin.

The low savings rate on falling incomes and higher unemployment would mean the federal government would have to tighten its belt. And, as we saw in the Great Depression, households—freaked-out by the potential for horrible economic outcomes—would dramatically boost savings rates (Remember your Depression-era grandmother washing Saran Wrap so as to reuse it?). Eventually, the economy would recover, but at a very high price and at a lower level of income and wealth than would otherwise have been the case.

If we consider the trade deficit a problem (and at current levels it may well be one), then appropriate economic policy is to institute long-term reforms that boost domestic saving and reduce the federal deficit without crashing the economy. Bellicosity and tariff mongering do not constitute long-term reform. And they are an exercise in futility anyway.

Perhaps the 20th century American postmodernist John Barth said it best in his novel The Floating Opera: “The enemy you flee is not exterior to yourself.”

The post Bad Math Can’t Close the U.S. Tr­­­ade Deficit appeared first on Zócalo Public Square.

The big story of the poisonous 2016 elections was how new digital media tools ended up crowding out two big topics from our conversation: the present and the future.

This phenomenon went way beyond the controversy about “fake news” on Facebook; the problem wasn’t just media quality—but excessive quantity. California and the entire country were deluged by digital tidal waves of data and information from months, years, and decades ago.

Many of these were dredged-up video clips or photos or records of the candidates and their families and associates. There were endless emails from old hacks and investigations, followed by all the historical echoes, endlessly debated and rehashed, which kept us refighting the Cold War, J. Edgar Hoover’s FBI, McCarthyism, the Clinton impeachment, 1980s New York real estate, and all 17 waves of feminism. And, poisonously, Donald Trump and his acolytes kept offering bogus ideas that refuse to go away—that President Obama is a secret Muslim who wasn’t born here, that vaccines cause autism, that immigrants add to crime and violence in the United States.

Because these waves never stop, those who have some interest in the truth are left to explain—over and over again—easily verifiable truths and old history. All this record-correcting leaves no time or bandwidth for conversations about the present (What to do about the wars that have been wound down but aren’t over? How to take advantage of this moment of rising employment and wages to invest more intelligently in infrastructure and reckon with national debt?) much less the future (How is this aging country going to make itself healthier, better educated, and more economically competitive?).

With all the past crowding out any conversation about today or tomorrow, the stakes of the election were never made clear—especially about how the result might affect our role in the world.

All of this is bad—but that’s not the bad news. The bad news is that, in four years, we’re likely to look back again at the historically overloaded 2016—and see this awful political year as the good old days.

Smart people in Silicon Valley say the digital media world is growing so fast, that future ill-conceived regurgitations from the past could be even more destructive to our democracy. Yes, there are more than 3.3 billion people online today—but that’s only about half of the world’s adult population. The rest are coming online, bringing more tweets and posts and misinformation to overload us and obscure what’s most important.

The election of 2020 promises even more hacks, more personal attacks, more shrinking into caves of the like-minded, and more of the extremism that media outlets cheaply produce to get attention. With every passing second, we create more of this “online” past, including politically irrelevant pasts that can drown our democratic debate.

This is a public health problem, as surely as an epidemic of opioid overdoses. The more political noise, the less political understanding. The more data, the less coherence. Digital media posts break information into such small pieces that they frustrate the creation of the kinds of coherent tales human beings need in order to follow and understand complicated subjects. The digital age is not just the “post-fact” era; more dangerously, as Politico recently warned, it’s the “post-narrative” age of democracy. If you can’t follow the story, it’s because there isn’t one.

If Google Home or Amazon Echo robots haven’t destroyed the human race by the next election cycle, new advances in media technologies could. Silicon Valley is producing new and more immersive technologies—augmented reality, virtual reality—that will allow us to invent out of whole cloth whatever past serves our purposes, and make it impossible for our brains to separate fact from fiction. For example, anyone with a modicum of knowhow will be able to create digital experiences of candidates saying or doing things they never said or did.

There is not nearly enough talk about how manufactured truths imperil democracy. Much commentary offers the false hope that the deluge of the digital past is somehow self-correcting, that the media culture has finally hit bottom and will reform itself. (That’s an argument I’ve been hearing since I was a cub reporter 20 years ago in Baltimore, and it’s not come true yet; this media pit feels bottomless.) Others suggest we’ll somehow educate the people away from the path of tidal waves. The free speech folks say you can fix nasty and inaccurate speech with more speech—but more speech actually makes the problem worse. And there’s always some journalist saying that if we all just subscribed to our local newspaper, we’d restore a media equilibrium. If only.

The more serious, but rare conversation, involves giving people more tools to stop the flow. We’re too quick to discount any potential remedies as unworkable, or as threats to our (self-destructive, apparently) “freedom.” Should we allow people to litigate and recover damages more easily for sins visited upon them on the web? Do we want to regulate social media platforms more extensively?

I find the most intriguing approaches economic. Is it possible to create financial consequences for mindless coverage, constant past-sharing, and social media tweets and posts that pollute our political and civic culture?

Sam Lessin, a former Facebook vice president writing at The Information, suggested that, “to deal with the race to the bottom of instant free communication,” there should be a tax on political coverage. If CNN, for example, wants to spend 50 percent of its time on election coverage, it should give 50 percent of its revenue to the government. “That would basically say that you can’t profit off the public discourse at all,” wrote Lessin. “We the people own it.”

A different approach involves trying to create incentives for media and technology companies to change their designs to reduce the pollution around elections. Could our smartphones be designed in ways that keep us from constantly picking them up? Could social media sites be reshaped to slow people down, and require them to consider or verify posts before hitting send? Silicon Valley companies and nonprofits suggest certifications for companies that agree to certain standards that encourage more limited, healthier media usage.

I’m intrigued by some combination of carrot and stick. Why not a tiny tax on every tweet or post that involves politics, to reduce their numbers? The financial transaction tax, a popular idea around the world, does the same thing—to reduce the hyper-trading that swamps markets and their regulators. The money from my tweet tax would go to fund media and civic institutions that agree to cover elections according to certain standards of accuracy, inclusion, and fair play.

Such a tax may sound oppressive, and contrary to our Constitution, but so is the world that our current media environment is producing. Somehow, and soon, we need new ideas that raise the costs of deluging us with the past—if the present and the future are ever again to have a fighting chance.

The post Can a Sin Tax on Mindless Media Save Journalism? appeared first on Zócalo Public Square.

Those reasons—economic anxiety, budget surpluses, tax schemes, housing prices, prison reform, health care expansion, urban wealth, and political opportunism have combined to create today’s “homeless moment” in California.

For decades, combating homelessness has been a civic obsession in the San Francisco Bay Area, with its long tradition of progressive politics and generous homeless services. Now that homeless hubbub has spread statewide. To the surprise of many at the State Capitol, a $2 billion bond to pay for housing for the mentally ill homeless—previously a backburner issue in tax-and-education-obsessed Sacramento—became a central focus of this month’s budget negotiations. And around the state, local law enforcement officials have stirred the pot by claiming that recent measures to reduce the California prison population have exacerbated the homeless problem.

In Los Angeles, which has the nation’s second largest homeless population according to federal figures, homelessness has become the dominant political debate. Mayor Eric Garcetti has talked big about addressing the problem—declaring an emergency, promising that no military veterans will be living on the street—and now faces criticism for weak follow-up. L.A.’s city and county governments are now ensnared in huge debates about how to pay for additional public housing.

A similar pattern—of big plans to end homelessness followed by conflict about how to do it—has emerged in cities from Redding to Riverside. In San Diego, with America’s fourth largest homeless population, a leading city councilman called for ending all homelessness by the end of this year. (He’s since backed off). In Orange County, there have been calls for a “homeless czar” to speed up the building of shelters and housing. In Fresno, Mayor Ashley Swearengin just held a press conference at the city’s baseball stadium to tout a plan to end homelessness in the next three years. In Sacramento, homelessness was a leading issue in the just-concluded mayoral election, with the victor pledging to build more housing for the homeless.

Given all this drama, you might expect that the number of homeless people is rapidly rising. To the contrary, homeless counts (the accuracy of which is another big debate) show relatively flat or even declining homeless populations in most of these cities. So why the sudden urgency? The short answer: the homeless are now more visible to the rich people who drive civic conversation. Fancy restaurants and new high-end housing have brought wealthy folks into urban neighborhoods and old industrial areas that once were havens for the homeless. Downtown L.A., home to a large population of unsheltered homeless for decades, has rapidly been transformed from one of the most affordable to one of the most expensive places to live in the city.

At the same time, anxiety about housing has never run deeper. The housing crisis of the previous decade cost many Californians their homes. California’s total failure to build housing—we’ve produced just one new unit for every eight new Californians in this decade—has led to sky-high prices. Many Californians are forced to spend more than half of their incomes on housing, and the prospect of sleeping on the street no longer seems so unlikely.

Politicians, who read polls showing this growing fear, have seized on the opening. Homelessness has become an almost perfect issue for politicians. Expectations of success are low (homelessness is persistent) so any progress can be spun as heroic. Few homeless people vote, so democratic accountability is close to nothing. And the issue doesn’t have a strong partisan profile, so there is room for political horse-trading and risk-taking.

Downtown Los Angeles’ Skid Row.

In an extraordinary public letter late last year, Santa Cruz Mayor Don Lane urged experiments with different approaches to the problem—and took himself to task for not having done so previously. “I am as responsible as anyone in this community for our failure to address our lack of shelter and our over-reliance on law enforcement and the criminal justice system to manage homelessness,” he wrote. “I have been a direct participant in many of my city’s decisions on homelessness. I have failed to adequately answer many of the questions I am posing.”

Such self-criticism is easier for politicians when money is on the way. The federal government has stepped up funding for housing the homeless—especially for veterans. The state is running a surplus, and a state fund for mental health services, funded by the Proposition 63 tax on millionaires, is so full of extra dollars that even Gov. Brown, a notorious tightwad, agreed to borrow $2 billion from it to fund housing and other services for the homeless. He and the legislature also threw another $400 million in affordable housing dollars into the budget.

In some places, the notion of a homelessness emergency is seen as a justification for a money grab. L.A. County supervisors want the state—which famously limits local taxation—to permit them to impose their own millionaire’s tax to pay for more homeless programs. That money, of course, could free up other funds for other purposes—which is all the more reason to decree a homelessness emergency.

To be fair, much of this money will be spent on a strategy that has shown some success—providing permanent supportive housing for the homeless. This housing-oriented approach is a welcome departure from decades of efforts to fix the ills of the homeless—be they substance abuse or trauma or mental illness—before getting them housing.

But the focus on housing is narrow for a problem this complex. And today’s windfall for homeless services is unlikely, in California’s volatile budget system, to last. Even if it did, the disparate nature of the funding—a bundle of incentives and grants—isn’t efficient enough to create the capacity to cover the fluid and shifting homeless populations in California cities.

In his acclaimed new book, Evicted, Harvard professor Matthew Desmond argues that ending homelessness would require greater ambition than anything on the table in California, or anywhere else in the U.S. He advocates “universal housing” as a clear right, like the well-established right to public education.

Under Desmond’s proposal, the government would issue housing vouchers to families below a certain income threshold so that they pay no more than 30 percent of their income on housing. The vouchers could be used to live anywhere they wanted—just as families use food stamps to buy groceries almost anywhere.

Such rental assistance is common in other developed countries like Britain and the Netherlands, which don’t suffer from American-style homelessness. In the U.S., universal housing via vouchers would cost $60 billion, Desmond estimates—real money, but a mere fraction of the hundreds of billions spent subsidizing the housing of wealthier people via the mortgage-interest tax deduction.

Universal housing wouldn’t have much chance of passage in Washington. But universal housing is just the sort of idea that California should try—if this homeless moment is really about ending homelessness.

The post What’s Behind California’s Sudden Urge to Help the Homeless? appeared first on Zócalo Public Square.

How did a man who described himself as having “a face like a mudslide” get a role in a movie? One answer is that the men who made Airplane!—David and Jerry Zucker and Jim Abrahams—made bold casting choices part of their comedy to a degree seldom seen in films, before or since. Real characters from Los Angeles and Hollywood showed up as characters in their movie, and actors were cast against type. Before they were in Airplane!, Leslie Nielsen, Peter Graves, Lloyd Bridges, and Robert Stack were not considered comedians.

As for Jarvis, the movie’s producer, Howard W. Koch, invited him to be in the picture. Jarvis told me the story when I worked for him back when the movie came out in 1980. “I told Koch, ‘I’m no actor.’ Koch says, ‘Well, you don’t have to know anything to be an actor.’ Which I guess is true, so I agreed. It took them eight hours to film my two or three minutes.”

Why did they bother to put him in the movie? Jarvis was a hot property, then. Proposition 13 had won by a landslide, and the tax-cutting mantra reverberated throughout the political world and became a major part of the 1980 presidential campaign. Jarvis was on the cover of Time magazine (a big deal in the pre-digital age) and a national figure. And his politics might have fit well with some members of the filmmaking team. Years later, David Zucker directed An American Carol, which lampooned contemporary American culture from a conservative perspective.

Airplane! debuted in the summer of 1980, a turbulent time in America. The presidential race between incumbent Jimmy Carter and challenger Ronald Reagan was about dead even in the summer polls. People talked about how the Misery Index, which measured unemployment and inflation, was at a staggering high. The country also faced high interest rates and skyrocketing gas prices.

Americans needed a laugh and a release from difficult times, and Airplane! supplied those things. The movie was silly—yet it was a hit with critics and audiences alike. Roger Ebert of the Chicago Sun-Times wrote: “Airplane! is sophomoric, obvious, predictable, corny, and quite often very funny. And the reason it’s funny is frequently because it’s sophomoric, predictable, corny, etc.”

For these reasons, and because it came to represent a certain time and place, Airplane! has endured. The film was the fourth highest grossing film of 1980 and made more than 23 times what it cost to create. In 2000, the American Film Institute ranked Airplane! number 10 on its list of the 100 funniest American films. In 2010, the Library of Congress selected Airplane! for preservation in the National Film Registry.

The movie had been out awhile when, on a slow weekday afternoon, Jarvis decided it was a good time to see the film. He did not attend a premiere. I don’t know if he was invited or if travel schedules got in the way, but the movie was nearing the end of its theatrical run. So Jarvis, his secretary Peggy, and I closed the taxpayer association office on Wilshire Boulevard and drove up to Mann’s Chinese Theater in Hollywood to catch a late afternoon show.

The movie was playing in one of the newly added theaters, not the main cinema palace built in 1927 and featured in many films. In the lobby, a theater manager recognized Jarvis and retrieved an autograph book used when movie actors came to the theater. Jarvis signed, not as a political figure, but as an actor. The end of the theatrical run on a weekday afternoon did not draw a crowd. As I recall, there were only five people in the theater, including our party of three.

Howard was entertained, although I don’t remember now any belly laughs coming from him. I’m sure there will be more at the Zócalo/KCRW screening. But that was a long time ago. So long ago that LAX had just one level, not the dual levels it has now for departures and arrivals. So long ago that the names of the airlines that can be seen on the terminal in the opening shots of the movie—Hughes Airwest, Trans World Airlines, Eastern, and Continental—no longer exist.

Some of the film’s jokes may feel dated, too. Ethel Merman plays a male soldier who thinks he’s … Ethel Merman. Barbara Billingsley, best known as the mother June Cleaver in TV’s Leave it to Beaver, appears as a woman who can speak jive and translates for two African-Americans on the plane.

One familiar face from the film is Kareem Abdul-Jabbar, who was already a legendary Los Angeles Lakers basketball star. In Airplane!, Abdul-Jabbar plays Kareem Abdul-Jabbar pretending to be co-pilot Roger Murdock, a slight twist on his acting career. Today Abdul-Jabbar has over two dozen movie and television credits, most often playing himself.

Jarvis played against type, too. He calls for a taxi in an early scene and hops in while the cab driver, played by Robert Hays, runs into the terminal chasing his girlfriend—after turning on the cab’s meter. Jarvis is still in the cab as the plane takes off to Chicago with the taxi driver aboard.

In fact, Jarvis has the last line in the movie but you’ll have to wait for it—his closing line comes after the credits. The scene was filmed after midnight when the airport was asleep, not a shooting schedule that pleased Jarvis. However his line gets one last laugh from the film and continues the motif of actors playing against type. With a nearly empty airport except for cleanup crews, Jarvis checks his watch and says of the cabbie: “Well, I’ll give him another 20 minutes but that’s it!”

The joke was that Jarvis would never have stood for paying the charge run up on the meter, and everyone knew it.

By the way, Jarvis didn’t get rich off the film. His residuals came in for years afterward, with no check being more than $5.

The greatest enduring value of his appearance in Airplane! may lie in this trivia question: What was Howard Jarvis’ only movie, Ethel Merman’s last, and Mayor Garcetti’s favorite?

Enjoy Airplane!

The post The Funniest Part of California’s 1978 Tax Revolt appeared first on Zócalo Public Square.

No, I am not talking here about national security or counter-terrorism policy, but rather the telling issue of how governments think about money–specifically the money they are entitled to, as established by their tax policies.

The president and Jack Lew, his treasury secretary, have labeled companies that relocate overseas “unpatriotic.” Last week, the administration announced a series of executive actions meant to crack down on such relocations–legally known as “inversions”–when they entail folding a U.S. entity into an overseas holding company, often for tax purposes. Walgreens, the drugstore chain, recently backed down from a plan to pull off an inversion given the firestorm around the issue.

The political fight around these inversions has pitted profitable corporations (mostly pharmaceuticals) and their lobbyists against politicians and pundits lamenting the fact that some folks refuse to pay their “fair share” or to appreciate the benefits bestowed upon us all by our American citizenship. And we all know which side of that fight we’re supposed to be on.

But hold on. The political debate around this issue is–and I know this will come as a shock!–divorced from the real underlying problem. The inversions debate is less about greedy companies wanting to lower their taxes and more about the fact that ours is a country with an outdated tax code: one that reflects the worst go-it-alone, imperialistic, America-first impulses.

Most of the arguments around inversions, and most of the media coverage, are purely focused on tax rates. And that’s understandable. We’re used to squabbling about rates and, at 35 percent, America’s corporate income tax is among the highest in the world. So this story of unpatriotic companies is almost entirely told as a quest for lower rates elsewhere.

But the far more significant problem is old-fashioned Yankee imperialism. The United States persists in imposing its “worldwide taxation” system, rather than the “territorial” model embraced by most of the rest of the world.

Under a “territorial” tax system, the sovereign with jurisdiction over the economic activity is entitled to tax it. If you profit from doing business in France, you owe the French treasury taxes, regardless of whether you are a French, American, or Japanese multinational. Even the United States, conveniently, subscribes to this logical approach when it comes to foreign companies doing business here: Foreign companies pay Washington corporate taxes on the income made by their U.S. operations.

But under our worldwide tax system, Uncle Sam also taxes your income as an American citizen (or Apple’s or Coca-Cola’s) anywhere in the world. What confers jurisdiction in this case is not the location of the economic activity but your home base or residency, as a company or individual. So $100 made by Apple selling a device in Shanghai or Paris is the same to Uncle Sam as $100 made in Los Angeles.

Well, almost the same. The one difference is that the $100 profit Apple makes in another country is first taxed by that country, and only taxed by Washington when it is literally brought back home (“repatriated,” in tax lingo). At that time, Apple receives a credit for the taxes paid elsewhere (just like you get to deduct your state income taxes from your federal tax bill).

So, let’s assume Apple makes $100 in a country with a 15 percent corporate tax. Apple pays that country’s tax authority $15. Then, Apple must decide whether or not to keep the rest of its money overseas. Bringing that $85 back to the United States to invest in business here or return to shareholders would require Apple to pay an extra $20 tax to Uncle Sam. (Apple would owe $35 in U.S. taxes minus the $15 credit it would receive for taxes paid elsewhere on that income.)

This deferral in imposing a tax that shouldn’t be imposed in the first place gives us the worst of all possible worlds: in complexity, inefficiency, and disincentives to investing in America and its future. Defenders of the status quo and corporate critics like to point out that companies often don’t pay a full 35 percent rate on their global income because a hefty portion of their overseas profits remains trapped overseas. So they shouldn’t whine about the rate, the argument goes, as if companies relish these artificial hurdles to allocating resources where they are most needed.

Imagine you are a California-based widget manufacturer competing around the world against a Dutch widget manufacturer. You both do very well and compete aggressively in Latin America, and pay taxes on your income there. Trouble is, your Dutch competitor can reinvest those profits back in its home country without paying additional taxes, but you can’t. Alibaba, the Chinese online retailer that just floated its massive IPO in New York, may face a lot of challenges expanding beyond its Chinese market, but taxes certainly won’t be one of them. USA Today reported that the company’s effective tax rate is 11.9 percent, compared to more than 30 percent for Amazon. And, the Chinese company won’t be hounded by its Communist regime to pay taxes on money it makes outside China.

The big underlying conceptual problem is that our worldwide approach to taxation, dating back to the 1920s, is the tax code equivalent of gunboat diplomacy. It presupposes that America has jurisdiction over anything Americans do elsewhere, and that other countries don’t really matter. It presupposes that it is our government, and no other, that is responsible for creating the conditions for business to take place. This approach dates back to a time when it would have been unimaginable to think that iconic American multinationals could one day do more business in foreign lands than at home, or that they might face formidable foreign competitors (even within the U.S. market!).

A number of companies have moved their headquarters outside the United States because our tax code makes it so difficult to run a global business. But it was emblematic of our nationalistic hubris that Burger King was also denounced as “unpatriotic” recently when its merger with Canada’s Tim Horton’s was announced. The company’s relocation to Canada (hardly a dodgy, tax-evasion haven) makes sense given where the combined companies’ operations are, but in Washington this was just seen as another treason by inversion, because in our myopic worldview, other countries don’t matter.

Instead of attacking companies struggling to compete in the global marketplace, the Obama administration should work with Republicans to move to a territorial tax system. That’s even more important than fiddling with the actual rates, because it is what will level the playing field between U.S. companies and their foreign competitors. Both would pay the U.S. rate here, but not elsewhere.

If we modernize our tax system to reflect the realities of the global economy, we won’t just stop more American companies from leaving. We’d also be encouraging plenty of foreign companies to pull off inversions of their own, to America. We may not be the only country that matters (sorry, D.C.), but if we fix the tax code, we’d be about as good a place to do business as anywhere else on earth.

The post Why Do Burger King and Walgreens Want to Flee the U.S.? appeared first on Zócalo Public Square.