Fiscal Federalism In Stress

Abstract

On the morning of June 7, 1978, the U.S. awoke to discover that they were in the midst of a “revolution.” No, men and women were not called to arms. Cannons were not primed to be fired. Nor were ships, airplanes, or missiles prepared to be launched. This was not a bloody revolution. This was a “Tax Revolution.” Proposition 13 had passed in California. With this news, voters across American were called upon to follow California’s lead. They were called upon to “pull in their belts,” to get the “fat out of the government,” and to demand a “smaller,” more efficient public sector which would “not compete with the interests of the private sector.”