By Wayne Lusvardi

California Gov. Jerry Brown often portrays himself as the modern version of an ancient Greek or Roman philosopher king.  A majority of the voters on Nov. 6 approved Brown’s  “millionaire’s tax” on people making more than $250,000 a year, Proposition 30.  But Brown could learn something from Roman Emperor Augustus about how to sustain a tax on the rich without a tax flight and business disinvestment.

Around the year 6 A.D., Augustus resolved a simmering financial crisis to the empire by reforming the military pension system. Augustus changed the pension system from receiving farmland to payment in cash.  Because this overtaxed the treasury, Augustus made a large contribution from his private resources as well as contributions from others. An inheritance tax of 5 percent on wealthy citizens and a tax of 1 percent on auction sales were enacted.  In return, the length of military service was extended from 16 to 20 years.  According to historian Klaus Bringmann, Augustus’ historic tax reform eliminated the twin dangers of confiscating wealth and the erosion of the rule of law.

Bringmann says Augustus’ tax was successful because he returned to a public order based on “law and justice” and the protection of private property rights.  Augustus’ cash pension system no longer threatened Roman elite property owners that their farmland would have to be confiscated to provide pension farms for military veterans.

Additionally, the old senatorial rule by propertied elites was restored after it had been lost under the rule of the Roman version of the modern Democratic Party — called the Gracchi after plebian nobles Tiberius and Gaius.  This resulted in the public perceiving taxes as legitimate and restoring unity instead of political dysfunction.

Looming Eclipse of the “Consent of the Taxed”

Augustus’ tax regime sounds very similar to the superficial pension reforms recently passed by Brown and the Democratic Party-controlled state Legislature.  And Brown’s millionaire’s tax seems structured along the lines of Augustus’ tax: an income tax increase of up to 3 percentage points on those making $250,000 or more, plus a 0.25 percentage point increase in the state sales tax rate.

Unfortunately for Brown, the control of the Legislature is about to turn into a supermajority by his Democratic Party.  Brown and the legislature will have no way to obtain the “consent of the taxed” because wealthy Republican legislators effectively will be disenfranchised.  The recent political reforms of redistricting and majority vote to pass taxes in the Legislature will only aggravate the destructive struggle for power in the state.  The wealthy will likely take actions to protect their property and their wealth.

Californians have already had the state threaten to impose a tax on all the property owners in San Bernardino County to undertake a wealth transfer by using eminent domain.  In San Diego County, the wealthy Poway School District has already imposed a “capital appreciation bond” — equivalent to a negative amortizing mortgage — on property owners.  This deferred payment bond is likely to sink home values when it comes due in 2032.  Property values are under threat by government confiscation and taxation in both poor and wealthy counties in California.

Fortunately, California voters rejected Proposition 31. It would have ended up creating new regional government councils to take taxes from wealthy suburbs and share them with big cities and school districts that have overspent their budgets.

Brown will need to create a new political legitimacy to maintain unity and sustain “taxation without representation” on the wealthy.  However, he has shown little inclination to create such a new political legitimacy other than by rule of labor unions and elites who benefit from political patronage.

Augustus said, “After this time I surpassed all others in authority, but I had no more power than others who were also my colleagues in office” and warned to “make haste (change) slowly.”

In a recent interview in Esquire magazine, Brown seemed to echo Augustus.

 “I’ve been reviewing the history of the late Roman republic, and I found that the struggles between the senators — or what were called the optimates versus the populares — were endless and often violent. Some senators lined up with the masses. Others were more conservative and upheld the traditions of the elite and the old families. These struggles got more and more violent, and ultimately it all broke down. It seems like the nature of a republic is that there is a lot of struggle. That’s just the way it is…. Looking back, what I appreciate is the stability of these larger institutions, or their inertia–they move very slowly. Whether you’re trying to change a school system or a political party or some bureaucratic aspect of government, things just move relatively slowly. Absent a crisis, you can only nudge them. The people elected for four years or eight years are bit players.”

Brown can’t restore Republicans to the state Senate like Augustus could to establish political legitimacy with the wealthy and the propertied.  This has resulted in a legitimacy crisis for Brown and the California Republic.

Crossing the Rubicon River

Paraphrasing Augustus, Brown says that that he is just a “bit player” who can only “nudge” rather than lead or use his executive powers. The fate of California’s republic depends more on governor Brown now that the Democratic Party has crossed the proverbial Rubicon River of total one-party rule and disenfranchisement of the business class.  In 49 B.C. the Roman Army under Julius Caesar crossed the Rubicon River into the sovereign territory of the Roman Senate.  The result was political instability and civil war, leading to the decline of the Roman Republic and the rise of the Roman Empire.

Has California reached a similar point of no return? Or can Brown exercise leadership to bring about political legitimacy for a new nearly unlimited tax and spending regime?  Or will Augustus Brown be content to just be a philosopher king?

The U.S. Supreme Court did Cal State Christian students a favor by turning down their lawsuit to get school money. This was sparked by Cal State’s “refusal to provide funding and other campus  benefits to student groups that exclude members of other religions,” according to the Chronicle, which continued:

“CSU denies official recognition and funding to student organizations that  discriminate on the basis of race, religion, gender, national origin and sexual  orientation.

“The Christian groups at San Diego State argued that the policy itself was  discriminatory for two reasons: The ban on gender-based admissions doesn’t apply  to sororities and fraternities, and secular organizations are allowed to make  viewpoint-based distinctions – an immigrants’-rights group, for example, can  exclude opponents of immigrants’ rights and still receive funding.

“‘The university did not tell the Democratic club it must be led by a  Republican, or the vegetarian club it must be led by a meat-eater, but it did  tell Christian groups that they must allow themselves to be led by atheists,’  David Cortman of the Alliance Defense Fund, a lawyer for the religious groups,  said Monday.

“As a result of the court ruling, he said, ‘the supposed marketplace of ideas  at San Diego State University will remain a stronghold for censorship.'”

Book of Acts

I suggest that these young Christians re-read the Book of Acts. The Apostles and their followers never applied to Caesar for a grant of the Roman taxpayers’ money.

By losing this case, two good things have happened: First, the kids are going to learn how to organize on their own and raise money voluntarily, not grabbing it from taxpayers.

Second, the Christian youngsters have gotten a good lesson on the way Church-State relations are going to be for them the rest of their lives. Ever since the Emperor Constantine made Christianity the official religion of the Roman Empire 1,700 years ago, Christians have debated whether they should work to control governments, which resulted in what was called Christendom — or disdain governments, including those in majority Christian countries.

It’s an old debate with reasonable arguments to both sides. It’s also not pertinent to today’s politics. Likely for the lives of anyone reading this, including the college kids, the U.S. and most other governments are going to be hostile to Christianity. Better get used to it.

The Catholic bishops in America long have received tax money for their hospitals and other charities. But they recently were shocked to learn that President Obama was forcing them, under his ObamaCare scheme, to offer medical insurance that included coverage of contraception and abortions. Did Obama promise he wouldn’t do it? Caesar lied. What about the First Amendment guarantee of freedom of religion? Caesar isn’t James Madison.

Then there’s Jesus saying, “Render therefore unto Caesar the things which are Caesar’s; and unto God the things that are God’s.”

Let Caesar have Cal State and the rest of the anti-Christian college systems, and K-12 school systems as well. Start your own clubs, your own colleges, your own K-12 schools.

Kids, you’re going to have to. So you might as well start now. It will be the only way to survive Caesar’s persecutions.

March 20, 2012