Commentary

Secretary of State Shirley Weber recently spoke at California State University–Sacramento on reparations for black Californians for slavery and other harms. While in the Assembly, she authored Assembly Bill 3121, which authorized the state reparations task force. She said it’s moving toward issuing a report in July:

Since California is now moving toward being the fourth largest economy in the world, and we can do everything else, we can talk about reparations. Apologies without action means very little.

And she told KCRA 3:

There have been reparations given to all kinds of other individuals, but there’s been no serious effort to repair the damage done to African Americans in this country. Whether it’s been financial, legislative, educational, all those kinds of things, and it’s unquestionable that the damage has been done and that we must do something, otherwise we can’t really move forward because that legacy is there.

KCRA 3 also summarized some of her comments: “She said those who are descendants of people who were enslaved, or descendants of Black people who lived during the time of slavery but were free, would be the focus of the reparations program.”

The question is: What to do? As I have written in The Epoch Times here and here and here, it’s impossible to figure out how to compensate for something—slavery—that ended in America in 1865 and never existed in the state of California; all groups and many people today have claims about abuses by the government or other Americans; and task forces like this one are almost guaranteed to cause even more divisions in our heavily conflicted country.

A Great Idea

However, when the task force last met, on Jan. 27 at San Diego State University, a decent idea actually was presented. Wealth Insider reported:

The California reparations task force listened to testimony from experts who suggested possible sources for compensation, after previous meetings had touched on the potential for hundreds of thousands in monetary reparations for specific harms. The experts’ suggestions included taxing the rich, such as through a state estate tax or a “mansion tax;” incentivizing the wealthy to help fund reparations by providing tax breaks, akin to how charitable giving minimizes one’s tax burden; or helping all taxpayers with below-median wealth by means of a tax credit, which would in turn help Black households.

That last one is the key: Tax credits for those with poverty-level incomes. Then you don’t have to worry about DNA tests to prove one’s ancestry, combing through housing records for unjust uses of eminent domain against ancestors, and any other complicated way to figure things out.

The Franchise Tax Board—or the IRS at the federal level—could be tasked, by law, to implement such a benefit to the poor.

More Reforms

But here are some more ideas along those lines:

1. Increase the state renters’ credit, currently $60 for a single person and $120 for those married. But income has to be below $49,220 for a single person and $98,440 for those married. That’s so low it’s almost not worth applying.

How about making it $500 and $1,000, and double the thresholds? (Full disclosure: I’m a renter.)

2. Cut the state sales tax by 1 percentage point, to an average of 7 percent from 8 percent. The sales tax is regressive, meaning the less you make, the higher percentage of your income you pay. According to Accurate Tax:

[P]eople in the lowest bracket pay more than DOUBLE what the top 1% pay. Because everyone in a given area pays the same percentage of tax, it works out to be a larger portion of the overall income for people who earn less.

According to Gov. Gavin Newsom’s Jan. 10 budget proposal (pdf) for fiscal year 2023-24, which begins in July 1, sales tax revenues in that period are expected to be $33.6 billion. If the sales tax were cut by 1 percentage point (of 8 points), those revenues would decline by one-eighth, or $4.2 billion. Certainly, in a budget pegged to spend $208.9 billion for the general fund, cuts of that amount could be made. (It’s too bad this change wasn’t made last year when the state surplus was $100 billion.)

Alas, the temptation would be to “make up” for the lost sales tax revenues by raising other taxes, in particular income taxes. That ought to be avoided because California’s taxes are so high overall they need to come down.

3. Cut regulations on everything: for example, the California Environmental Quality Act, which especially hampers low-income housing construction; and Project Labor Agreements, which mandate high union wages for private-sector building projects, such as on housing.

4. End occupational licensing requirements for most jobs. A November 2022 report by the Institute for Justice described how these unneeded requirements kill jobs, especially for the poor. In its California section, the report scored the state third-worst in requiring unneeded licenses for the poor, with 75 licenses required for 102 lower-income occupations. Average fees are $517 per license, compared to the national average of $284. What a burden on someone just starting out.

Conclusion

It’s a hopeful sign California’s reparations task force is considering at least one sensible remedy to the lingering effects of slavery and segregation. But the risk remains that the project as a whole will be counter-productive and just create more divisions, instead of bringing us together.