Taxes & Spending

Even ‘Blue’ States Oppose Tax Increases

Despite all of the post-election punditry about a divided America, there’s one issue that almost everyone agrees on: no new taxes.

While the chattering class is busy carving up our nation into liberal blue and conservative red states, they’re missing an important story. There is consensus against higher taxes, and the national tax revolt continues as tax measures go down to defeat in state after state.

A great example occurred this election in Washington state, where John Kerry handily won 53-46. But the Presidential race wasn’t the only important choice on the ballot; there was also Initiative 884, or I-884, a voter question that would raise state taxes by a billion dollars a year.

It seemed like a winner. I-884 would hike the Washington state sales tax rate by “just” 1 percent, a “penny on the dollar.” The new funding was dedicated to education, perhaps the most popular function of government in a state that prides itself on its public schools and technical prowess. In fact, seventy percent of Washington voters told pollsters in March that education was their top priority.

Additionally, I-884 had substantial financial support, including backing by Microsoft, Starbucks, the teachers’ unions, and Governor Gary Locke. In addition to the usual election year union muscle, proponents of the tax increase raised $3.4 million to spend paid advertising and get-out-the-vote organizing. And I-884 was polling well: in January, the measure had a support level of 57 percent.

Not so fast. “Hard work beats daddy’s money” is an Armey Axiom, and it neatly applies to the fight over I-884. In fact, the band of hard-working volunteers who opposed I-884 — led by former U.S. House Majority Leader Dick Armey and FreedomWorks– adopted this phrase as their battle slogan. Despite daunting odds, Armey’s merry band of anti-tax activists marshaled the facts against I-884. And the facts were powerful. The measure would have given Washington the highest sales taxes in the nation. The Seattle-area sales tax rate would have hit nearly ten percent. The hike would have cost the Evergreen State an estimated 10,000 jobs, and each person would have paid an average of $115 in extra taxes a year. Even worse, the brunt of the increase would have been borne by the state’s poorest citizens, as the sales tax is inherently regressive. Indeed, even the ballot title was misleading– confusing the tax rate with the actual percentage size of the increase. The ballot title read that tax would only be raised by one percent instead of the true figure of 15.4 percent.

Because the measure seemed a sure thing, the Washington business community largely sat out of the I-884 fight, or even supported the measure. As a result, the League of Freedom Voters PAC only raised $42,000 to fight I-884. Faced with a 70-1 spending disadvantage but armed with the facts, a web site, a terrific grassroots network, and experienced organizing by Washington FreedomWorks director Jamie Daniels and former state House Speaker Clyde Ballard, our anti-tax volunteers went to work. Hard work beats Daddy’s Money: Ms. Daniels made dozens of editorial board visits, and it paid off. Surprisingly, local newspapers began to agree that I-884 would be bad for Washington’s economy. As the truth campaign rolled on, the Vancouver Columbian summed up the sense of things, writing that, “I-884 is gathering more warts than a barehanded boy with the pocketful of frogs.”

By the time the votes were counted, Jamie Daniels, Clyde Ballard, Dick Armey, and the great team of volunteers had dealt tax hikers a resounding defeat: the measure was crushed by a vote of 60 to 40 percent. In fact, the initiative lost in every single county–even in the liberal western part of the state. Elway Polling put I-884 up by four points just before Election Day, which meant that virtually every undecided voter was convinced by FreedomWorks’s anti-tax message and voted ‘No.’ Washington may have voted for John Kerry, the liberal Senator Patty Murray, and a Democratic state legislature, but they also resoundingly told their government that they do not want higher taxes.

The citizen activists in this blue state were able to overcome a high-dollar media “air war” using good old-fashioned shoe leather politics. Thousands of dedicated volunteers waged an effective grassroots campaign by working phones, going door-to-door, hosting anti-tax house parties, and speaking at community events. Armed with the truth, FreedomWorks members worked tirelessly to counter the liberal spin machine and the big money backing the tax increase.

In fact, I-884 was the third major statewide tax initiative defeated by FreedomWorks in the past eighteen months. The first was in September 2003, in Alabama. Battling Governor Bob Riley, FreedomWorks/CSE activists helped voters reject the largest tax increase in state history by 68-32 percent statewide vote. And in Oregon in February of this year, FreedomWorks/CSE collected nearly 150,000 signatures to put a huge state tax hike to a special election vote, and voters trounced this increase by a 19 point margin.

The latest win in Washington makes it clear that across the nation, taxpayers are consistently refusing to foot the bill for government waste and excessive spending. Alabama and Oregon have already streamlined government in response to this reality–and Washington State will hopefully do the same. Whether voters in states chose George Bush or John Kerry, there is widespread agreement that taxes are too high and that government should live within its means.

Many Americans were jubilant on November 3rd, and many others were sullen. However, the defeat of I-884 is something that taxpayers in every state can cheer about.


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