Conventional wisdom holds that by putting Republicans in charge of government, voters insulate themselves from tax hikes. The record since 1994, however, when the GOP swept to power both in Congress and in many state capitals, provides a sobering correction.
While Republicans over all have a better record on taxes, GOP fingerprints can be found on many of the state tax hikes in recent years. At the federal level, there is a rising chance that a Republican Congress may allow some of the recently enacted tax cuts to expire, raising taxes. The past decade has taught a hard lesson to believers in limited government: Electing Republicans is simply not enough.
At the state level, what else should taxpayers be fighting for to help stop tax hikes?
Powerful structural limitations on government clearly help. Just look at Colorado’s Taxpayer’s Bill of Rights (TABOR). Adopted by Colorado voters in 1992, TABOR:
- Requires voter approval before higher state or local taxes or debts may be enacted.
- Bans local income taxes and state property taxes.
- Creates a flat-rate income tax, emergency reserves, and comprehensive state and local spending limits tied to inflation increases and population growth.
Requires that any surplus revenues must be returned to taxpayers.
Michael New, an academic who has studied state tax limits (and occasionally writes for Human Events), summarizes: “Colorado’s Taxpayer Bill of Rights has quietly become America’s most effective limitation on government. It has kept spending in check, provided tax relief to Colorado residents, and deserves a great deal of credit for Colorado’s strong fiscal position.”
TABOR has been key in restraining state government growth in Colorado and thus has helped to spur strong economic growth. [See “Look at the Difference it Makes to Have a Conservative Governor,” Human Events, March 4, 2002.] Between 1995 and 2000, Colorado was first in the nation in the growth of gross state product, and second in the growth of personal income. Because of its success in limiting government, TABOR is now under attack by public employee unions and other pro-spending advocates who will pour millions of dollars this fall into a ballot measure aimed at gutting it.
Term limits also help protect taxpayers. In Washington, D.C., it is unquestionable that the longer someone serves in Congress, the more he will spend. The evidence points in a similar direction in the states.
First, there are the governors. Republican Gov. George Pataki of New York was terrific in his first couple of years, but has gone downhill since, supporting tax hikes. The same thing happened to former Gov. John Rowland (R.) of Connecticut (now serving a prison sentence for corruption) and former Gov. Bill Weld (R.) in Massachusetts, among others.
Longer-serving members of state legislatures are also disproportionately the voices of big government, as was demonstrated in 2004 when the Virginia Legislature voted to raise taxes by $1.6 billion.
While much of the blame for this tax increase lies with Democratic Gov. Mark Warner, the solidly Republican Legislature passed a tax hike that was almost 38% higher than what Warner originally proposed.
The real fight over the tax bill was in the Virginia House of Delegates, which ultimately approved the tax package by a vote of 52 to 45. Democrats voted in near lockstep for the higher taxes. A majority of Republican delegates opposed the tax hike, but obviously not enough to stop passage. The critical block of support came from longer-serving GOP delegates. While Republicans elected in 1986 or later opposed the tax hikes by a more than 3-to-1 margin, Republicans elected prior to 1986 by a margin of 2-to-1 supported the tax hikes. The old bulls in the Republican caucus were key to passage of the tax increases.
Many taxpayers are disappointed that the “Republican Revolution” of 1994 hasn’t put much of a dent in big government at either the federal or state level. While adding Republicans to Congress and to state governments might provide some help to taxpayers, the past decade demonstrates it is not enough. Other safeguards such as TABOR and term limits are needed as well.