Howard Jarvis: Mad As Hell at 76, An LR Interview

In rallying that constituency to a 2 to 1 victory at the polls in June 1978, Jarvis also lit a fire under a national phenomenon which came, in the weeks following the passage of Proposition 13, to be called the Tax Revolt. Prop 13 clones began turning up on the ballot in the 25 states whose constitutions permitted the use of the initiative process. Ambitious tax revolters began thinking bigger than state and local taxes and began talking about finding a way to force the federal government to give up some of its income and trim some of the unsightly fat off its mammoth bureaucracy. And Howard Jarvis was right there in the front lines, making every effort to extend the Prop 13 idea to every level of government in every corner of the land. By the fall of 1978 he had filmed a 30 minute TV special on the tax revolt, arranged for prime time broadcast of the special on major stations in America’s largest cities, and brought in about $1-​million in contributions to start up a national tax revolt organization called the American Tax Reduction Movement. By early 1979 he had contracted to write a book on the tax revolt called Mad as Hell (it’s scheduled to be published this fall), was involved in negotiations to add a nationally syndicated radio commentary to his already nationally syndicated newspaper column and his almost astonishingly heavy schedule of public appearances, and was working within California to preserve the gains voters thought they had won by passing Proposition 13.

Within weeks of 13’s passage, the politicians and bureaucrats in California had begun working to circumvent the new law. If they were now required to cut certain government programs which had been funded by property tax revenues, they apparently reasoned, they’d just cut services like police and fire protection and garbage pickup and sewer maintenance—services which they could feel confident most citizens would prefer not to do without. Then they’d publicly announce that there were no longer sufficient property tax revenues to fund these services at their usual levels, and it would be necessary to charge fees to keep them going. The amounts of the new fees, needless to say, were strikingly reminiscent of the amounts many homeowners had saved by voting for Prop 13. As of early 1979, when LR editors Jeff Riggenbach and Roy A. Childs, Jr. sat down with Howard Jarvis for some candid conversation about how the tax revolt was doing one year later, these efforts at circumvention were still going on, though many had been stopped and other were tied up in court challenges. We decided to begin our discussion by finding out how the elder statesman of the fledgling tax revolt felt about the success of his first legislative triumph.

LR: It’s been almost a year since Proposition 13 was passed by the people of the State of California. Do you feel it’s been implemented? Has government been cut back to adjust to the decreased amount of property tax revenue?

Jarvis: No. Or only to a very small extent. The State of California had 880,000 employees; it still has 876,000. There’s been a lot of effort on the part of elected officials to circumvent 13 in a number of ways and they’ve been successful in most of them up to now. On the other hand, the real purpose of Proposition 13 was to protect the right of people to own homes and property in California, and to that extent it’s been absolutely, miraculously successful. I think 13 stopped four million elderly couples from having their homes placed in jeopardy, along with maybe two million middle class people, and it’s opening the door somewhat so young people can once again buy homes in California. In addition to that, according to the latest release of the United States Department of Commerce, 13 has created an economy in California that’s about twice as healthy as any of the rest of the states have. It’s added 91,000 jobs in California and is rapidly increasing the personal income of the people of California. So, overall, it’s an overwhelming success. I think we can establish that by the fact that although it passed 2 to 1 on June 6,1978, a recent statewide poll asked the question, “If 13 were on the ballot today, how would you vote ?” and discovered that today it would pass 3 to 1.

LR: Officials in Oakland, one of California’s medium-​sized cities, recently announced that Proposition 13 would necessitate cuts in the number of beat cops working the downtown area at night, along with other cuts in the fire department and the parks and recreation department.

Jarvis: I can’t speak for the parks and recreation department, but there’s more than enough money in the one percent property tax to pay full police costs, full fire costs, full street lights costs, full sewer and garbage collection costs, and if they say they’re going to have to cut back on the police department they’re giving the public a snow job. In Los Angeles we wouldn’t stand for that. The Mayor made an announcement one morning that they were going to take a thousand people off the police force. I got him on the phone; I got on the air; and they didn’t take anybody off the police department. These generally are scare tactics used by opportunistic politicians to punish the people for voting for 13. Parks and recreation I don’t know too much about. It hasn’t been affected in Southern California. I don’t see why it should be affected much in Northern California. However, I don’t think we should sell peoples’ homes out for taxes for parks and recreation.

LR: You’ve now proposed that we follow up Proposition 13 with a 50% cut in the state income tax and the business inventory tax. Why abolish the business inventory tax instead of the state sales tax, which would probably make for a much more dramatic cutback in the taxes that citizens have to pay?

“The public school system is second to none in waste, incompetence, and zero results. It’s a cancer on this society.”

Jarvis: Well, we have to have some taxes in California, and the state tax is very productive and it’s a pretty fair tax.. As long as food and medicine are eliminated from the sales tax it’s a pretty progressive tax. One feature it has that I like very much is that it gives the taxpayer control over how much of it he’s going to pay. If he doesn’t want to buy a Cadillac, buys a Ford. If he doesn’t want to buy a $10 shirt, he buys a $3.50 shirt. We can’t take all the money away from government. We have to leave government the amount of money it needs for essential public services. The income tax in California has gone up even faster than the property tax. And the income tax plus the sales tax, after having produced a $6½-​billion surplus last year when all the public officials ran around the state lying about it and said it was only $1½-​billion, will produce an $8-​billion surplus this year. So what we want to do is to take is about $2½-​billion more dollars out of that $8-​billion surplus because the state will have ample tax revenues without it.

The business inventory tax is a very serious drag on the economy of California. In the first place it creates big industries in other states. On March 1st of each year, the inventory you have in stock is assessed for the inventory tax. Big merchandisers like Sears & Roebuck and J.C. Penney always warehouse their incoming merchandise in Nevada or Arizona until March 1st. A lot of inventory, especially in the motion picture business where they can move $50-​million worth of stuff in one Fruehauf trailer, leaves California about 5 days before March 1st, goes over the Arizona or Nevada, and comes back about 5 days after March 1st. The inventory tax simply raises the consumer 24 price and keeps California business in tougher competition with other states. And it doesn’t produce enough money to justify being such a drag on our economy. That’s why I’m in favor of eliminating the inventory tax. A guy buys a pair of shoes in a shoe store and doesn’t sell them for a year, and he has to pay inventory tax twice on it. That adds to the price and it’s bad for consumers. We want to keep the sales tax, but freeze it at its present level.

“The people of this country are saying to the bureaucrats and politicians: ‘I’m more important to me than you are!’”

LR: Ultimately, in order to keep cutting taxes, we will have to cut back on government services and functions. Which should be cut back?

Jarvis: All of them.

LR: Where do you feel the most money is wasted by government today?

Jarvis: The public school system is second to none in waste, incompetence, and zero results. I think the public school system is a cancer on this society. The only difference between the public schools and the Mafia is that the public schools steal more money.

LR: The Libertarian Party has proposed a ballot initiative granting a state income tax credit of up to $1200 for any individual or corporation that pays the private school tuition of a child in the state of California. What do you think of that idea?

Jarvis: I have to agree with it. Private schools are far superior to the public schools. A grand jury investigation in Los Angeles County last year turned up the sad fact that 63 percent of the students at affluent schools—not ghetto schools, but affluent schools—were functionally illiterate. Instead of providing education, the public schools are a manufacturing establishment for permanent welfare recipients.

“A strong third party would be a great help, and the Libertarian Party has the best set of principles I’ve seen.”

LR: Another area of government expenditure which some critics feel could be trimmed down or even eliminated is funds earmarked for enforcing morals laws. It’s been estimated that as much as 80 percent of the money spend on police work in our society is spent on victimless crimes. In San Francisco, an initiative is being prepared for the local ballot which would abolish the vice squad. Do you applaud that idea as a good way to cut back on government?

Jarvis: I do not. I think the people that proposed that have rocks in their heads. I think we have to have some standards. What is vice? Vice is gambling and prostitution and drugs and pornography. I’m not in favor of any of them. I’m not so concerned about pornography except that it gets into the hands of children. I happen to think that pornography is going to rapidly die out. I think it’s run it’s course. I hope so. As for prostitution, I hate the profession. I think it’s a degrading thing. But because it’s probably the oldest profession in the world, we can probably never do anything about it. I think there is some argument whether it should be legalized or not. But I guess I’m kind of a blue nose. With my vote I wouldn’t do it. I’m more opposed to gambling than I am to most things. I don’t like horse race tracks. I don’t like legalized gambling because legalized gambling destroys the poor. They are the victims. And the drug culture in the United States cost us $42-​billion last year. But maybe my judgment on some of these is a little bit biased. I happened to grow up in the state of the Mormon Church and though I’m not a very good Mormon, I believe the standards and values that the Church instilled into the people of Utah have made it a great state, a highly educated state, a most progressive state, and a most desirable state. Maybe I’m influenced by that. I don’t quarrel with anyone who has a different view. But those are my views.

“I liked a great many of the things Ed Clark said in his race for Governor of California. I think he ran a terrific campaign.”

LR: You’ve now begun calling for national tax cuts in addition to local ones. Your American Tax Reduction Movement is demanding a pretty dramatic decrease in the federal income tax.

Jarvis: I disagree with the word “dramatic.” The bill we’re backing calls for a $ 100-​billion cut in federal spending in 4 years. That’s $25-​billion a year. But that’s only five percent of the more than $500-​billion the government now spends every year. I can’t find a congressman or senator who says that we can’t cut five percent of our spending somewhere. I think I’ve talked to maybe 80 senators, and 300 congressmen. That is not a dramatic cut, but it is about a 25 percent cut for everybody in the country.

The people of this country want a tax cut. I’ve been in 48 states. I know what they want. They want a tax cut. And they don’t care particularly what the government thinks about it. They want a tax cut. They want a tax cut because they know now that every dime they earn in January, February, March, April, May and June until June 10th goes for taxes. And they think they are being robbed and they are. The average fellow now sees that he can’t even take his wife out to dinner once a week; he can’t get his kid’s teeth fixed; because the government is stealing his money. So he wants a tax cut. He wants fewer governmental employees. He knows that if there is a tax cut he has to have fewer governmental employees and that’s satisfactory with him. He isn’t worried about losing services. The people who are paying the taxes aren’t getting any services. They want to keep the money they earn. They’re saying to the politicians and bureaucrats, “I’m more important to me than you are!” That’s what it’s all about.

LR: Do the people have any ideas on where they’d like national government cut back?

Jarvis: It really doesn’t make any difference, and the people don’t really give a damn, except for perhaps one thing. There’s one thing they don’t want. They don’t want the defense department decreased. They want it increased.

LR: Why? It there no fat, no unnecessary bureaucracy, in the defense department?

Jarvis: There’s a lot of fat; there’s a lot of unnecessary bureaucracy in the defense department. But we ought to run it the best we can. It’s the one major expense that we can’t take many chances with. We can risk major cuts in the $268-​billion in HEW, but we can’t risk them in the $118-​billion in national defense. The thing is, the people that determine our defense requirements are the Russians, not us. I got into an argument with a Ph.D. over that, and I said, “you want to cut the defense, and I want to raise it. Let’s assume that I’m wrong; we’re out $50-​billion dollars a year. Let’s assume that you’re wrong; we’re out the country. Now, what do you want?” And he couldn’t answer the question.

LR: Some people, including many libertarians, have argued that since most of the U.S. defense budget goes to defend other countries, if we moved toward a noninterventionist foreigh policy we could still more than adequately defend the United States, and yet have massive reductions in the defense budget.

Jarvis: I disagree.

LR : How do you feel about the move to pass a constitutional amendment to balance the federal budget?

Jarvis: I think it’s crazy. A balanced budget doesn’t necessarily mean any cut in taxes. If they’re spending $ 100-​billion this year, they can balance the budget by collecting new taxes and bringing in $ 100-​billion. Next year they can decide to spend $200-​billion and raise the taxes again so they can collect $200-​billion. The people in this country want a tax cut.

In the second place, I think it would be ten years at least before you could get any federal constitutional amendment into effect in the United States, and we can’t wait that long. We’ve got to do something sooner. Only in the event that we can’t force the Congress to do what it ought to do should we go for a federal constitutional amendment.

LR: Some of the organizations which have sprung up in the wake of the tax revolt seem to see the situation as you do. The National Taxpayers Union, for example, throws its weight behind any plan which would result in reduction of taxes.

Jarvis: I’m for the National Taxpayers Union. The only disagreement I have with them in on the question of a constitutional convention for a balanced budget.

LR: How about the National Tax Limitation Committee, which takes a strikingly different approach? They aren’t really calling for sharp tax reductions at all, but are trying instead to limit government spending to its current percentage of personal income.

Jarvis: I’m not interested in the National Tax Limitation Committee. I’m not interested in them at all. What they want to do is keep you and I working every January, February, March, April and June ‘til the 10th in order to pay taxes. This country cannot survive free under that condition. Tax cuts are what we have to have.

LR : Do you think our best hope of winning those tax cuts lies with the Republican party or the Democratic party?

Jarvis: There’s really no such thing as a Democratic or Republican party any longer in the United States. Only one-​half of one percent of the Republicans participate in politics. Less than one percent of the Democrats participate. And the elections are a contest between the National Federation of Republican Women and the AFL-CIO. I think a strong third party would be a great help to the country.

LR:Do you think the Libertarian Party has the potential to become such a strong party?

Jarvis: Yes. I think they have the best set of principles I’ve seen in a long time. I think they’re very nicely in line with the Constitution of the United States. I’ve just read Murray Rothbard’s For a New Liberty, and I agree with a great deal of it.

LR : Ed Clark’s race as the Libertarian Party candidate for the governorship of California last fall won him almost 400,000 votes and was the most successful third party race for that office in more than a generation.

Jarvis: I thought Ed Clark ran a terrific campaign, especially when you consider the mountain he was up against. When you think of the entrenchment of the people in public office, both Democrats and Republicans, when you think of the enormous advantages they have over any outsider, when you think of the pork barrels and the tax money that they can use to improperly affect their elections, Clark ran a fantastic race. I like many of the things he said.

LR: Do you think that either the Democratic or Republican nominees for the Presidency of the United States in 1980 are going to endorse the American Tax Reduction Movement?

Jarvis: Well, it’s generally a bit stupid to try to predict a political scenario, but I think that the nominees for the Democrats are going to be Carter and Brown. I think that the nominees for the Republicans are going to be Reagan and Connolly. I think we’d have a chance to get more help from Reagan and Connolly than from Carter and Brown.

LR : If you got no support from the Democrats and only wishy-​washy support from the Republicans, as you did in California during the Proposition 13 campaign, and firm, all-​out support from the Libertarian candidates, would that have an effect on the American Tax Reduction Movement’s favorite for the Presidency?

Jarvis: It’s a tough question, but yes, because I’m a maverick.