This election cycle, pundits are spending most of their time dissecting Republicans’ chances of taking control of the House and Senate, along with the unprecedented 37 gubernatorial races to be decided in November. But voters in many states also have the opportunity to participate directly in the policymaking process by voting on a number of important initiatives and referenda. Tax initiatives in Washington and Massachusetts will predict the overall electorate’s attitude toward taxes in 2011 state legislative sessions, while seven states have the opportunity to push back on key pieces of President Obama’s legislative agenda: health care, cap-and-trade, and card check.
Ballot initiatives give voters the opportunity to remove the “middle men”—often unpredictable elected officials—and to vote directly on constitutional amendments or statutes. This year, there are a number of important tax initiatives on the ballot, as well as a number of measures that push back on specific pieces of President Obama’s policy agenda in D.C.
The most important measure of the 2010 cycle is Washington State’s I–1098, which would implement an income tax for the first time. Washington is currently one of seven states that do not tax income, a comparative advantage over most states that would be significantly eroded should this measure pass. It is being sold as a tax on “the rich,” as it kicks in at $200,000 of income. But after two years, the Democratic state legislature can expand the tax to other income levels with a simple majority vote. As we have seen with the implementation of income taxes in other states, this is certain to happen over time. I–1098 will raise roughly $2.2 billion its first year, and the vast majority of that revenue will go to new spending programs.
The biggest pro-tax funders of I–1098 do have Washington addresses—Washington, D.C., that is. Six of the eleven biggest contributions to Yes on I–1098 come from D.C. unions, among them are $900,000 from the Service Employees International Union and $750,000 from the National Education Association. And 17 of the 22 six-figure pro-tax campaign contributions come from unions. They are literally buying an income tax for Washingtonians from their perch on K Street.
On the other side of the tax issue, Massachusetts will decide on a significant tax cut proposal. If Question 3 passes, the state sales tax will roll back from 6.25 percent to 3 percent. Massachusetts is currently at a serious disadvantage to neighboring New Hampshire, which has no sales tax. Proponents of Question 3 argue that the measure will create 33,000 new jobs in the private sector and return nearly $700 to each taxpayer.
Of course, the public sector (read: unionized government workers) in Massachusetts would be forced to come to terms with the curtailing of automatic pay increases, lavish benefits, and unsustainable pensions. Rather than face economic reality, the unions are out in full force to oppose the measure. The eight biggest anti-Question 3 donors are unions, including over $1 million from state and national teachers’ unions.
There are a number of union-opposed measures with federal policymaking implications as well. In August, Missouri voters sent a shockwave through Capitol Hill when they voted to nullify the Obama health care bill’s individual mandate with an overwhelming 71–29 vote. Next month, similar measures will appear on ballots in Arizona, Colorado and Oklahoma. If they pass, they will underscore the unpopularity of the government’s takeover of health care and will seriously damage the President’s political capital as he heads into the second half of his term. Newly elected Representatives’ mandate to “repeal and replace” will only be strengthened.
An equally toxic piece of federal legislation is the Democrats’ cap-and-trade bill, a massive new energy tax that threatens to kill already-scarce jobs and to inflate monthly energy bills drastically. In California, voters will have a chance to reject cap-and-trade at the state level by voting for Proposition 23. It would overturn AB 32, a cap-and-trade law signed by Gov. Schwarzenegger in 2006. The governor is joined by rent-seekers in the alternative energy industry in opposing Prop 23. Because they cannot compete on cost or output with traditional energy providers, the alternative energy industry literally subsists on government mandates and subsidies. Prop 23 would rightly put them out of business until they are able to compete in a free marketplace.
Yet another controversial piece of the Obama agenda is “card check” legislation that would eliminate the right of workers to employ a secret ballot in union-organizing elections, opening themselves up to intimidation from union leadership. The bill stalled in Congress due to its unpopularity with the public, but voters in Arizona, South Carolina, South Dakota, and Utah can further isolate themselves from card check by voting for measures that guarantee the right to a secret ballot in all union elections, an important step to protect worker freedom.
While it is important to elect politicians who reflect one’s core beliefs, the initiative and referenda processes give voters the ability to affect the policymaking process directly. From taxes to health care to unionization, voters in a number of states can send a clear message to their elected officials at both the state and federal levels in November.
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