Welfare for golfers

David Leonhardt Op-Ed Columnist The mortgage-interest deduction. The carried-interest loophole. The tax break that applies only to people who get health insurance through their job. The tax break for elite colleges that enroll overwhelmingly affluent students. There is a long list of tax provisions that increase economic inequality. They are especially damaging after four decades in which pretax inequality has grown sharply. But these provisions aren’t always well understood: Many Americans don’t realize the ways in which the government exacerbates inequality, instead of moderating it. I’m one of those Americans. In the debut episode of his podcast’s second season, Malcolm Gladwell uncovered an inequality-increasing policy that was new to me. It applies to California law, rather than federal law, and centers on the way that the state’s golf courses avoid paying taxes, legally. Essentially, golf courses have persuaded the state to treat their enormously valuable land as almost valueless. As a result, the taxpayers of California are subsidizing the golf games of the state’s wealthiest residents. Part of the explanation involves an obscure state tax ruling, but part of it involves the well-known Proposition 13, which froze many properties’ assessed values at their 1976 level. (The freeze is a huge benefit for anyone who owned property before the late 1970s and, as a result, worsens inequality in all kinds of ways.) In the episode, which I recommend, Gladwell sneaks in a neat little lesson on Greek philosophy and the ship of Theseus. If you listen and enjoy it, he also addressed inequality in a series of three previous episodes of the podcast, called “Revisionist History,” about higher education. Those episodes drew in part on my work on economic diversity. On a related subject: Ross Douthat’s latest column examines the Democrats’ continuing failure to win elections, despite the country’s increasing liberalism and the Republican Party’s unpopularity. The implication of his argument, in my view, is a more flexible but more populist Democratic Party. It’s a Democratic Party that would do more to attack inequality-enhancing tax provisions. Ross writes: “As the country has moved left, the Democratic Party’s base has consolidated even farther left, and in the process the party has lost the ability to speak to persuadable voters who disagree with the liberal consensus on a few crucial issues.”