Taxation is, almost by definition, an arbitrary and wholly political act. Politicians decide what's to be taxed and what's not and much of tax policy is, therefore, nonsensical -- such as the disparate sales tax treatment of hot and cold foods.

In that vein, it's irrational to levy property taxes on cars in the form of vehicular license fees -- treating them like land and houses -- while exempting other tools and pieces of personal property, such as computers or lawn mowers, or even other forms of wealth, such as shares of stock or jewelry.

That said, it's perfectly logical, and even morally correct, for California's vehicle license fee (VLF), which was slashed by two-thirds in a series of actions by the Legislature and two governors, to be fully reinstated now that the state is experiencing its worst-ever budget crisis. The history of the VLF tax cut explains why.

A half-decade ago, with the state experiencing an uptick in revenues as it emerged from recession, Republican lawmakers began agitating for a reduction in what they called the "car tax," knowing that it would be a popular move. The VLF, several hundred dollars a year on late-model cars (2 percent of value), is one of the few taxes that Californians pay directly by writing lump sum checks, rather than being withheld from their paychecks, like the income tax, or collected pennies at a time, like the sales tax.

Pete Wilson, a Republican governor in his last year, wanted tax cuts to erase from the popular memory his advocacy of what had been the largest state tax increase in U.S. history early in his governorship.

Democrats didn't particularly care for the car tax cut, and local government officials were worried because VLF proceeds -- billions of dollars each year -- went directly into their coffers as one of their very few unrestricted revenue sources. Although advocates of the VLF cut were promising that the state would "backfill" the lost revenues from a bulging state treasury, the local officials, having been burned by state politicians' promises in the past, worried that if the state's fiscal situation tightened up, the backfill could be reduced or eliminated.

Thus was born the "trigger." Democrats and local officials insisted that if there was to be a car tax reduction, it would have to include provisions to reinstate it automatically if the state lacked enough money for the backfill. Wilson and Republican lawmakers agreed, and the tax was reduced.

It was, as Republicans had hoped, a popular move and in the ensuing two years, with Democrat Gray Davis in the governor's chair, the car tax was slashed some more, until the total cut reached almost two-thirds of the original tax. But shortly after the last cut was enacted, the state's income tax revenues plunged, thanks to the meltdown of the high-tech industry.

Although the state was running multibillion-dollar annual deficits in 2001 and 2002, the car tax cut and the backfill remained intact, and Davis and lawmakers covered them, like other state obligations, with billions of dollars in direct and indirect loans. It was bad fiscal policy but with the polls showing the VLF to be the most unpopular form of new taxation, politicians were reluctant to touch it.

Finally, this year, with deficits soaring to unimaginable levels, Democrats clamored for restoration of the full car tax and the Davis administration, after much political maneuvering over responsibility, pulled the trigger. Republicans and anti-tax activists fumed, and on Tuesday, the Howard Jarvis Taxpayers Association and Republican lawmakers filed suit, contending that the action is void because the state constitution says taxes can be raised only with a two-thirds vote of the Legislature.

They may be legally correct; the courts ultimately will make that decision. But fiscally and morally, pulling the trigger was the right thing to do.

The VLF reduction was predicated on the erroneous notion that the state's spike in dot-com revenues would last forever and the trigger was written precisely to guard against the eventuality of a fiscal meltdown. Republicans, moreover, accepted the trigger as an integral part of the tax-cut legislation. Without it, the reduction would never have been enacted in the first place, so questioning it now is a breach of political contract.