A Popular Tax Revolt

  • Public-Policy Reform
  • 1978

In a 1978 referendum, nearly two thirds of California voters approved Proposition 13, which lowered and capped the state’s property taxes and heralded the coming of a nationwide “tax revolt” that helped sweep Ronald Reagan into office in 1980. Behind the success of Proposition 13 stood thousands of grassroots philanthropists. The sponsor organization, the United Organization of Taxpayers, relied on 50,000 small donors who offered up $440,000 and an estimated one million hours of volunteer time to get the measure on the ballot.

The New York Times described the measure’s passage as “the beginning of a tax revolt—a modern Boston Tea Party.” During the two years following, California property and sales taxes were cut by more than $4 billion. In 1980 the tax revolt moved to Washington. Reagan cut tax rates sharply during his first year in office, and chopped the top income tax rate down to 28 percent in 1986.

  • Alvin Rabushka and Pauline Ryan, The Tax Revolt (Hoover Institution, 1982)