Americans Pragmatic on Taxes

Americans Pragmatic on Taxes

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Anger at Washington – symbolized by the Tea Party movement, the political problems of congressional incumbents, and polls showing trust in the federal government at historic lows – explains why voters are in no mood to pay more taxes in order to help Washington balance its books or finance new spending programs.

What’s receiving less attention, however, is a far different story that’s emerging in the states, where policymakers face the real-time challenge of meeting their balanced-budget requirements amid soaring state budget deficits. From Albany to Sacramento, Austin to Augusta, state lawmakers and voters in recent months have raised taxes and rejected proposals to impose annual tax and spending limitations.

The record suggests that, rather than being fire-breathing anti-government zealots, Americans are thoughtful and pragmatic. When faced with the choice of cuts in programs that will threaten their quality of life and their children’s future on the one hand or tax increases to finance those programs on the other, they will choose the latter far more often than conventional wisdom would suggest.

The record also suggests, as a corollary, that anger at “government” is more Washington-centric than broad-scale. What Americans seem to be saying, as they bump incumbents from office and rally behind insurgents, is that it is our national leaders who are not doing their jobs – whether that involves reducing red ink, securing the borders, or simply setting aside their differences to make things happen.


Last Tuesday, voters in Arizona approved a three-year, one-cent increase in sales taxes, one promoted by Republican Gov. Jan Brewer (better known for her tough stance on immigration) to prevent sharp cuts in education and other services. Moreover, the vote wasn’t even close. With 88 percent of precincts counted, the New York Times reported that the proposal had won the support of 64 percent of voters.

That’s no isolated case. In January, voters in Oregon rejected proposals to roll back increases in state personal and corporate taxes.

State lawmakers are acting similarly. More than 30 states have raised taxes since the recession began in late 2007 in order to prevent deeper cuts that would be needed in health, education, and law enforcement programs to balance state budgets, the Center on Budget and Policy Priorities reports.

Meanwhile, voters have consistently rejected the seemingly appealing notion of limiting annual state-wide tax and spending increases. Many of these have come in the form of so-called “Taxpayer Bill of Rights” (TABOR) measures.

Most recently, voters in Maine and Washington rejected TABOR proposals in November. But the longer term record is far more striking. Anti-government forces have launched TABOR efforts in 20 states since 2004 and, despite the obvious political appeal of a tax or spending limit, voters have rejected every single one of them.

What are we to make of all this?

Yes, voters are skeptical about government. Given a choice between large or small government in the abstract, they will probably opt for the latter. Nor have voters, even at the state level, become happy tax raisers.

But, given a choice between (1) public services that boost living standards and the quality of life both now and in the future and the taxes to finance them, and (2) a smaller public sector and lower taxes, Americans are likely to bite the tax-hike bullet.

Apparently, anti-government fever only goes so far. It often stops at the point where voters begin to understand what’s at stake.

Related Links:
Arizona Backs Sales Tax Increase - New York Times
Oregon Tax Vote Shows State's Revenue Conflict - Wall Street Journal
Recession Continues to Batter State Budgets - Center on Budget and Policy Priorities

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Lawrence J. Haas is former Communications Director to Vice President Gore and, before that, to the White House Office of Management and Budget. He's now a public affairs consultant who writes widely about foreign and domestic affairs, including fiscal policy.

Lawrence Haas
is former senior White House official and award-winning journalist, writes widely on foreign and domestic affairs. His articles have appeared in The New York Times, USA Today, Los Angeles Times, Baltimore Sun, Miami Herald, San Diego Union-Tribune