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Friday, May 04, 2007

Is the Tax Tide Turning?

Christopher Hayes sees signs that the knee-jerk opposition to tax increases of recent years is abating, particularly when the taxes are tied directly to government services the public supports:

Look Who's Taxing, by Christopher Hayes, The Nation: Texas State Senator John Carona is the very image of a Republican lawmaker... He represents north Dallas and the adjacent suburbs, a bastion of country club Republicanism, whose residents are not typically enthusiastic about either taxing or spending. So it was more than a little surprising to hear him say that it was high time ... Texas raised taxes. "No one likes to pay higher taxes," he told me ... "But the people ... send us to the capital to do what is best for the state. The vast majority didn't send us so that we would never raise new revenue. Somehow along the way, the conservative movement ... has taken the definition of conservatism to mean the unwillingness to ever raise taxes for any purpose no matter what the need. And that is just foolish and wrongheaded."

Carona's not alone. Over the past few years, momentum has begun to build, bit by bit, against the antitax movement, and it has largely flown under the radar of the national media. A number of governors, from Democrats Jon Corzine of New Jersey and Mark Warner of Virginia to Republicans like Mitch Daniels of Indiana, have pushed through significant tax increases and been rewarded with high approval ratings. Daniels's apostasy was particularly meaningful, since he was once Bush's budget director and had been a lifelong fellow traveler of antitax warrior Grover Norquist. This year, other states ... facing budgetary shortfalls are proposing significant tax hikes, in stark contrast to just a few years ago, when "legislatures...bent over backwards to avoid major tax hikes, instead raiding rainy day funds, borrowing money or expanding gambling to raise more revenue."

This is big news, because for much of the past two decades states have been the sites of Norquist's greatest victories. ... Unlike the federal government, ... many states are legally required to balance their budgets, so they've resorted to ... tricks and gimmicks to keep the government funded. Gambling has exploded, pension funds have been raided and many states are now reduced to selling off public assets. But eventually the bill comes due. ...

[T]he ground is clearly shifting. In 1994, when the tax revolt was arguably at its zenith, 66 percent of Americans said that the amount of federal income taxes they paid was too high. By 2006 that figure had dropped to 48 percent. ...

Driven by a desire for the approval of the Beltway mandarins, Democratic candidates are going to be tempted to package potential tax increases (for instance, repeal of the Bush tax cuts) as a means of restoring fiscal discipline and reducing the deficit. But telling people you're going to raise taxes to reduce the deficit is like telling them you're going to garnish their wages to pay off the gambling debts of their crazy vagabond uncle. It's no fun.

People seem ready to accept higher taxes, but only if those taxes are sold to them as paying for services they want the government to provide. "The notion that [social programs] are what Democrats want and what Republicans abhor may have been true thirty years ago," Carona told me. "But I feel like there's been a shift. Now everybody wants the programs, but one group is unwilling to pay for them and the other group is unable to pay for them."

Over the past six years, Republicans have succeeded in de-linking taxes from the public services and social programs they pay for. It is the job of Democrats, particularly the presidential candidates who will have the largest platform, to re-establish that connection in voters' minds. ...

    Posted by on Friday, May 4, 2007 at 02:43 AM in Economics, Politics, Taxes | Permalink  TrackBack (0)  Comments (36)


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