Sunday, April 24, 2011

Annals of Direct Democracy, Budget Edition

The Economist has a pretty good report detailing the madness that is California’s direct democracy system, and it’s good on the theory. But what about the practice? It turns out Jerry Brown, like all good California politicians, is struggling to put his budget together. Unlike all good California politicians, he wants to raise taxes. Oddly enough, Californians appear to be in favor of such tax raises. Unfortunately, both Brown and Californians want to vote on those tax increases.

If there’s anything we know about taxes, it’s that they’re unknowable—they’re just too complicated. Given the complication, the result of a budget is likely further complication that all Californians who aren’t accountants, tax lawyers, businessmen and economists will not have much of a clue how to evaluate. The preceding groups, of course, will have a clue on how to evaluate said tax increases but their own interests will invariably color their evaluations (do you think an accountant would advocate a radically simplified tax system? Does a turkey vote for Thanksgiving?) The third option, a radically simplified tax system, disturbs the status quo too much and therefore will be rejected.

And, of course, it’s not clear California has even a basic grasp of the relevant factual issues:
Although the budget crisis has dominated the news for years, the survey found that few people have as firm a grasp on the details as they believe. Some 75% of respondents said they were following the budget debate, yet only 16% were aware that state spending has shrunk by billions of dollars over the last three years.

Nearly half thought the budget had grown in that period, with more than 1 in 4 saying it was "much bigger." In fact, general fund spending went from $103 billion in the 2007-08 budget year to $92.2 billion in the current year.

Note that this is before the inevitable confusion of an inevitably angry and raucous campaign. This is just one reason why you shouldn’t let direct democracy happen to you.

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