Advocating through opposition

Jon Peacock of the Wisconsin (left-wing) Budget Project inadvertently gives reasons to support the constitutional amendment he opposes:

Under the amendment, a two-thirds majority of both houses of the Legislature would be required for legislators to pass an increase in the rate of the state individual income tax, corporate income tax or sales tax.

Although supporters argue that a supermajority requirement is necessary to hold down tax rates, history shows this not to be the case. The three tax rates that would be restricted by the proposed constitutional change have rarely been increased in Wisconsin. In fact, the state’s sales tax rate and corporate income tax rate have not been raised in 32 years. The only increase in the individual income tax in the past 28 years, which took place in 2009 during the recession, affected only about one out of every hundred tax filers. …

Another unintended consequence of creating a higher hurdle for tax rate increases is a shift to other types of state and local revenue. By holding down income tax revenue, the state will have less funding for property tax relief, which will put upward pressure on local property taxes.

In addition, when state policy-makers need to raise revenue to balance the state budget, they would be much more likely to raise fees, such as university tuition. Although the proposed amendment allows tax rates to be increased by referendum, the timetable for accomplishing that will generally make it an unworkable solution when it comes time for legislators to pass a biennial budget bill.

The proposed change in the state constitution also would make it more difficult for state lawmakers to pass legislation that makes comprehensive tax reforms. It wouldn’t be possible without a two-thirds vote for legislators to pass a revenue-neutral bill that raises income or sales tax rates in order to pay for a substantial cut in property taxes.

How can a supermajority not be necessary to hold down tax rates? When they are already too high. I wonder how Peacock thinks Wisconsin has been in the top 10 in state and local taxes forever, and number one some years. Peacock excuses the James Doyle $2.2 billion tax increase that (1) should never have become law, (2) wrecked the state’s economy, and (3) led to the defeat of Democrats left and, well, left in 2010 and 2012.

No one likes to pay higher fees, but at least it can be said that fees fund things that are to some extent optional. I wouldn’t like to not have a driver’s license, but there are people who don’t have driver’s licenses and don’t own cars. Of course, in Peacock’s world the choice is higher taxes or higher fees, instead of budgetary conservativism and fiscal prudence. (Spending limits on every level of government are overdue additions to the Constitution.)

Peacock also argues that “States with constitutional constraints on the options for balancing their budgets run a significant risk of getting lower ratings for the bonds they sell.” But states who budget responsibly don’t have problems with bond ratings. Wisconsin’s bond ratings would be even better if the state measured its budget correctly, by Generally Accepted Accounting Principles, but I doubt Peacock supports that either since that would stop future governors and Legislatures from profligate overspending.

If you do not support limits on taxation, you don’t support limits on government. Wisconsin is a tax hell because we don’t have significant (as in constitutional, not legislative) limits on government. Peacock’s opposition to limits on tax increases proves why we need permanent limits on taxation.

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