California Can’t Be a 21st Century Superpower Acting Like a 19th Century Rebel

When California entered the Union in 1850 Independence, Missouri, marked the western edge of American civilization.

From Independence to Sutter’s Fort on the Sacramento River there was no United States — just a vast and often forbidding wilderness and towering mountains that must be crossed.

To get to California across that wilderness, travelers attempted a 2000 mile journey by wagon, horseback or on foot.

The journey consumed many months and many early settlers died in the attempt

The entire population of the United States was just over 23 million people – of which approximately 19 million were non-Hispanic whites — immigrants from Europe and their descendants. Congress would not grant birth right citizenship to Native Americans for another 75 years.

Mail between the new state government and the national government was mainly carried from Washington to Panama by steamship, trekked on foot or by donkey overland across the Isthmus of Panama and then carried from Panama to Sacramento by a second steamship – a journey measured in months not days. Mail (and gold bullion) from Sacramento made the same journey — in reverse. Construction on Panama Canal would not begin for another half century.

As an experiment in accelerated communication – President Buchannan’s second annual message to Congress was carried overland on horseback to Sacramento in just 17 days.

Geography Determined the Distribution of Power

California’s distance from the national capital – in the middle of the 19th century — best illustrates the jurisdictional ambiguity – the push and pull between state sovereignty and federalism — the point where the power of a state government ends and the national government begins.

Awash in gold and fortune seekers, and with only sporadic communication and instruction from Congress or the President, Californians took it upon themselves to form a state government capable of maintaining law and order, adjudicating land claims and establishing regulations to control the actions of private actors – banks, land agents, merchants – and ordinary citizens.

The federal government’s presence was limited – principally – to small US Army (Cavalry) and US Navy outposts established following the end of the Mexican War in 1848.

Congressional action in 1862 authorized the sale of federal bonds to underwrite the construction of the first transcontinental railroad (system) and a parallel telegraph line linking California to the established rail lines east of the Missouri River.

Land grants along the railway right of way helped to hasten settlement of some of the more fertile areas along the right-of-way – reducing but not ending California’s isolation — while making the early investors the wealthiest men in California.

California in the 21st century is no different from California in the 1850s and 1860s. Whether immigration, addressing climate change, and defining the government’s role in health care – California wants to ignore the rules but refuses to give up the money that come with those rules.

How the 16th Amendment Intruded on California’s Independence

By ratifying the Sixteenth Amendment in 1913, the states agreed to allow the Congress to directly tax citizens, equally, in every state for purely “national” purposes.

Direct taxation combined with the concept of the guarantee of the “full faith and credit of the United States” changed everything.

From 1914 forward — slowly, steadily in small steps and big leaps the power of the federal purse has fallen more directly on the shoulders of every American citizen – who, now pay — on average — about one-third of their gross income on federal payroll and state and federal income taxes.

Over time those “national purposes” have intruded into traditional areas of state government responsibility as basic as the social safety net, highway construction, healthcare, public education, and emergency preparedness – “bribed” with bushels of federal dollars generated through higher and higher federal taxes and more and more federal borrowing.

Each intrusion had an early and specific purpose that benefited citizens but money is seductive – and “free money” more seductive.

“Free money” stimulates legislative creative thinking about how more “free money” could do much more good with “no new taxes”.

For example, it is worth asking ourselves if California would allocated $600 million in gasoline and general sales taxes to build a 1.75 mile subway connecting San Francisco’s financial district with the developing (but earthquake sensitive) “south-of-market” unless they were assured of a “matching” federal grant of $983 million from the Interstate Highway Trust Fund?

“Free Money”

When payroll and income taxes no longer yielded enough revenue for the various and sundry purposes – Congress thought up new “indirect” taxes embedded in the point-of-sale purchase price of the product.

For example, President Eisenhower advocated the building of an integrated interstate highway system as a matter of national security.

Congress agreed, imposing a federal gasoline tax through the Federal Highway Act of 1956. The Act was a 10 year program with only one purpose — to build an Interstate Highway System: For example, Interstate 80 from San Francisco to Washington D.C. and Interstate 5 from the Mexican Border to the Canadian border.

President Eisenhower believed it was the states’ responsibility to build off-ramps from the interstate highways onto their state highways.

Fast-forward to today, Congress is debating yet another increase in the federal gasoline tax to help big coastal cities build transit systems, local expressways etc… paid for big city commuters but, also, by citizens from Nevada, Wyoming, Nebraska, West Virginia etc.– who depend on cars and trucks for all their transportation needs!

Ending the Jurisdictional Ambiguity

In both the 19th and 20th century, Congress’ used the lure of “free money” to link California more closely to Washington. In the 19th century the bribe was plentiful public land used to stimulate investment in the transcontinental railroad and in the 20 century it was the bounty of federal tax dollars.

In the 21st century — in the shadow of some 30 laws suits against the federal government — Sacramento and Washington must finally settle the issue: Is California one of 50 federated states or the Republic of California.

If “California Values” are the political rejection of the traditional values of the majority of Americans in the other 49 – then California must take financial responsibility for living with those values.

If California wants to have an “open border policy” – citizens of the other 49 states shouldn’t be expected to share in paying the resulting security, social welfare, and education costs. “California Values” should be paid for by Californians.

If California wants to battle climate change by enforcing stricter car emission limits and gasoline mileage requirements — California should be able to enforce those stricter measurements.

But California’s stricter emission standards will increase the cost of a new automobile by a few thousand dollars. Will consumers be willing to pay more for smaller, lighter imports that meet the higher California standards?  Will USA car manufacturers step up and compete  – let the market place decide.

If California believes a single payer health care system that dictates access and provides the same level of free health care to anyone in the state – citizens, residents, and continuously arriving undocumented migrants alike — then California tax payers have to agree to pay for that program without additional federal dollars.

If California wants to build a “high speed railroad” to link San Francisco and Los Angeles good, but just as a few wealthy Californians were the prime movers behind the first transcontinental railroad – the legislature should persuade the billionaires at Facebook, Google, Apple, Paypal etc. to pay for the railway they expect to benefit from.

When faced with the responsibility to pay for their choices, I am willing to bet real money California tax payers and consumers will choose linkage to “free money” and start expecting their elected officials to follow the rules.

Graphic Courtesy of Snopes.Com

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