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The Tax and Spend Spectator
Tax Hikes in 2011: The Dog That Didn’t Bark
The Taxpayer Protection Pledge alllowed Republicans to protect themselves and taxpayers alike.
(Page 2 of 2)
Despite the “Stimulus” spending spree coming to an end, the hoped-for “demand” for continuing that spending failed to create the political clout to increase taxes in most states.
The 2010 election brought a net gain of 711 Republican state legislators and six Republican governors, and by 2011 Republicans controlled the house, senate, and governorship in 24 states, and the GOP controlled both houses of the legislature, but not the governorship, in five other states: Minnesota, Missouri, Montana, New Hampshire, and North Carolina. Only one of those states allowed taxes to be raised in 2011.
Texas reduced its spending by $15 billion over the next two years. Florida cut $900 million. Wisconsin, led by Gov. Scott Walker, eliminated a $3.6 billion overspending problem without raising taxes. Walker’s reforms of government unions and ending of tenure will reduce state and local spending for decades. Pennsylvania’s Gov. Tom Corbett held the line and his first budget spends $2 billion less than the previous one, the first time in four decades that the Pennsylvania government has seen a year-over-year spending reduction. New Jersey Gov. Chris Christie cut $1.5 billion in his first budget after his election, a 5 percent reduction from his predecessor Jon Corzine’s last budget. Christie also passed public employee pension reform, which will save New Jersey taxpayers $130 billion over 30 years, and signed a FY 2012 budget that spends $900 million less than what the Democrat legislature was calling for. Michigan Gov. Rick Snyder brought projected spending down $1.8 billion and actually passed tax reductions of more than $700 million over the next three years.
The importance of the Taxpayer Protection Pledge can be seen in Nevada where a Republican governor Sandoval was elected promising never to raise taxes. But he wouldn’t put it in writing by signing the Taxpayer Protection Pledge. He said his word was good enough. He lasted less than six months before he signed a $620 million “temporary” tax increase over the next two years. “That $620 million hike is scheduled to expire in 2014,” notes conservative activist Chuck Muth of Citizen Outreach. “Considering how he reneged on his verbal promise to the voters last year, we’d feel a whole lot better this time around if Gov. Sandoval would sign the Tax Pledge this year. Fool us once…”
New York’s Democrat governor Andrew Cuomo refused to sign the pledge but repeatedly said he would not allow a tax hike in his first year. A verbal promise. Worth the paper it was written on. He actually lasted until December 7, when he signed a $1.9 billion tax increase on high income earners soon to escape to Florida. A state-run lottery is a tax on stupidity. A state-level millionaires tax is a tax on the inability to find the phone number for U-Haul.
Politicians who say in speeches that they will not raise taxes but refuse to put it in writing through the pledge have plans. To raise taxes. One wonders about the judgment of Virginia voters who elected two Democrat governors in a row, each verbally promising never to raise taxes—Mark Warner and Tim Kaine. Each refused to put in writing the campaign promise they made so easily. Each raised taxes dramatically.
After the 2010 elections there were 11 states with Democrat governors and Democrat legislatures. Those states all had targets on their backs.
Illinois Democrats increased the income tax 67 percent, the corporate income tax 46 percent, for a $7 billion whack over two years. John Tillman, CEO of the Illinois Policy Institute, points out that unemployment in Illinois is now 10 percent and neighboring states average 8.1 percent. The Yankee Institute in Connecticut sadly reports that the Democrat governor and legislature increased 77 different taxes and fees, and while these include the usual suspects—the income tax, death tax, sales taxes—they also target smoking cessation products, yarn, valet parking at airports, non-prescription drugs, pet grooming and boarding, not to mention a 20 percent hike on alcohol taxes. And if you wanted to come visit this train wreck, the hotel tax jumps to 15 percent. Deep Blue Maryland increased taxes on liquor in 2011, with massive tax hikes threatened for 2012. The Arkansas legislature passed the buck to voters by putting two tax hikes on the November 2012 ballot.
Two states, Oklahoma and Vermont, passed taxes on hospitals that were then matched by federal matching funds through Medicaid and the hospitals were kicked back their taxes. The states netted the federal matching funds. Free money. Forty-seven states have pulled this stunt to raise money from federal taxpayers. Someday Congress should outlaw this scam.
California re-elected Jerry Brown for a return engagement as governor, and some hoped an older and balder Brown would have learned something since he led the opposition to property tax-cutting Proposition 13 in June 1978. An unchanged Brown has pushed hard for a $58 billion tax hike, which would have been the largest state tax increase in U.S. history. But courtesy of that Proposition 13 initiative, a two-thirds vote of both the assembly and senate is required to raise taxes. Every California Republican legislator save two has signed the Taxpayer Protection Pledge and as a result the Republicans have stopped every tax hike since Brown’s return. Governor Brown is now trying to put his tax increases on the November 2012 ballot through the initiative process.
THE 2011 LESSON from the states is the same as the one from Washington. Only by taking tax hikes off the table will politicians begin to focus on reforming government to reduce spending. Verbal promises to avoid tax hikes are worse than meaningless. Written, public commitments like the Taxpayer Protection Pledge are increasingly self-enforcing and this past year alone they’ve saved American taxpayers trillions in avoided tax hikes and in actual spending restraint.
Because 2012 is an election year, the correlation of forces remains with taxpayers against tax hikes and for spending reform and reduction. Obama’s effort to raise taxes to make his spending increases permanent has failed…so far. The 2012 elections could bring to power a House, Senate, and president committed not simply to a strategy of containment, but a real rollback of government spending.
About the Author
Grover G. Norquist is the president of Americans for Tax Reform.
Letter to the Editor View all comments (22) | Leave a comment
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Brian Mc| 3.15.12 @ 7:27AM
I am finding these shennanigans quite depressing. The talk has been going on for years as agencies, bureaus, and what-not continue to spring up out of thin air and grow out of control. The 'needs' of the government NEED to be weighed against the contents of the Constitution and elimintated in whole, not in part. Until this is accomplished we are on a course of historical doom.
numbatdog| 3.15.12 @ 8:12AM
Democrats always resort to taxation (legal theft) because they have no other way of generating revenue. Liberalism, socialism, statism, whatever you call it doesn't work. Its always a slow slide to bankrupcy. As the working sector is punished for success it either moves away, becomes less successful or hides it's assets. The government sector with no such restraints grows wildly larger every year.
Indy| 3.15.12 @ 8:39AM
"Eventually a Value Added Tax will be required."
This is the concern I have with Romney, he has not ruled out a VAT. Why Santorum has not raised this as an issue troubles me, is he open to it? If yes, that's a show stopper If no, he's a poor campaigner. By staying in the race, the one service he can do for American taxpayers is to force Romney to take a formal position against the VAT. Newt hasn't raised it either but I suspect that's because he considered it in the past.
Ron Paul is against it but he won't attack Romney....so
Mr. Norquist since you have access to the media, why don't you help us out and raise this as an issue, we need Romney pressured in public to say no to a VAT or come out and say he's for it, voters need to know.
http://online.wsj.com/article/.....91220.html
Zbigniew Mazurak | 3.16.12 @ 5:37AM
False. Romney is only considering a VAT, and only as a REPLACEMENT FOR, not an addition to, the current tax code.
That's because he knows that a flat tax would be nothing more than a placebo. It would take only one or two Congresses to undo it. The current abomination of a federal tax code started as a flat income tax.
TrueBlue | 3.16.12 @ 10:52AM
That's because it was allowed to be changed. Any meaningful changes to the tax code will require an Amendment that can then not be added to or changed in any way by laws down the line. It will also require VERY specific wording.
Harpagon| 3.16.12 @ 11:32AM
HAHAHA! Good luck getting such an amendment passed. In fact, I think passing an amendment etching the federal income tax in stone would be a bad idea. If anything, the federal income tax ought to be banned and replaced with the FairTax.
Making an INCOME tax flat does not resolve ANY of the problems with the INCOME tax. An INCOME tax does not become any less of a drag on the economy and on personal liberty by becoming flat. An INCOME tax, flat or not, is a tax on people's earnings, i.e. on productivity and savings. It also requires a huge, intrusive IRS to administer. But of course, you and other flat INCOME tax supporters are so wedded to your precious flat INCOME tax tht you are refusing to consider anything else.
Indy| 3.15.12 @ 8:47AM
One issue I have with the no tax pledge is it seems to take major tax reform off the table. While I agree DC has a spending addiction and spending cuts (real deep cuts and not reduced increases) are needed ASAP, but we have a major problem with almost 50% not paying any Federal Income Taxes, partially driven by the overly generous Earned Income Credit. How do we fix this? We have reached the tipping point with takers > makers.
We cannot continue down this path...
RJ| 3.15.12 @ 9:06AM
Good point, Indy. I would like to better understand the particulars of the Taxpayer Protection Pledge. Does it prohibit ending deductions and credits in exchange for lower rates even if the plan is scored revenue neutral? And I fully agree that everyone should pay something. Otherwise the freeloaders have "no skin in the game" and vote for more spending.
PaulyD| 3.15.12 @ 11:31AM
Indy,
Simple. A flat tax - 10% on everyone's income. No deductions, no exemptions. Everyone pays the same rate.
Indy| 3.15.12 @ 12:51PM
Agreed but nothing will be done until the election and if Mr. Electable "Romney" wins the nomination, not a chance for a flat tax. We have to focus on the senate / house and support conservatives ,maybe they could force the issue but I have my doubts. The tax code is used by both parties to grant favors to lobbyists.
The sad thing is the country is ready for a major overhaul of the tax code and would support a flat tax, sadly we have no Presidential candidate to back with that as a key platform.
Jabber3| 3.15.12 @ 10:30AM
This country badly needs serious comprehensive tax reform before we can "balance our books". If realistic targets are set, for example revenue as a percentage of GDP, and agreed to in advance this can be done with the knowledge that we can have an equitable taxation system. The key is a transition plan so that certain segments of the population do not get decimated in the process when certain deductions and allowances are shifted or eliminated.
threeleafclover| 3.15.12 @ 1:03PM
I see no articles today that pertain to my concern, so will put it here. The Air Force One trip to Ohio with O. and the British PM cost $478,000.
Considering we are in austere times vis a vis fuel, could our Dear Leader not have had the White House Theater pipe in the game on closed circuit TV and Michelle make some hot dogs.
Or did he just want to show Cameron, "Now get a load of how these guys salute me when I walk down these stairs. And watch how I kinda bounce and joggle my wrists as though I really own the place. It sends a message of self-assurance to my constituents. It is how we rule in the U.S.
Cost? No mattah, I jus' say, "Put it on my National Debt tab."
Perception is reality. Or close to it.
cicero| 3.15.12 @ 2:11PM
Arguing about reforming the tax code, and percentages of GDP are like rearranging the deck chairs on the Titanic. The dialogue has to move to the size and scope of gevernment. We need to be talking about getting rid of those Departments that sprang into existence during the 60s and 70s that were supposed to allow the Feds to improve education, make us energy independant, provide decent housing for the poor, make sure that those who found themselves in temporary financial straights were able to receive temporary assistance, . . . Stop feedikng the beast. Don't just debate how much of your arm you are willing to sacrifice to his appotite for this meal.
RJ| 3.15.12 @ 4:33PM
I am for both. The tax code is corrupt and should be overhauled; lower the rates and eliminate deductions & credits. And let's delegislate and deregulate by looking at each and every department, agency, and program. Our society would be better off it much of the federal government was eliminated and its functions returned to the private sector or state & local government. Here is a start on what could go: Energy, Education, Commerce, HUD, Transportation, Amtrak, end all subsidies, bailouts and loans, commence the sale of lands owned by the federal government, and of course, repeal ObamaCare, Dodd-Frank, Sarbanes-Oxley, and many others such as Davis-Bacon.
Matt | 3.15.12 @ 2:29PM
ugh... spending growth is at a 70 year low outside WWII draw down... so is revenue growth...
income tax revenue was 898 billion in 2010, barely enough to cover defense and veterans spending which was around 860 billion...
Thorny| 3.15.12 @ 3:15PM
Bush cut taxes in 2001.
Bush cut taxes in 2002.
Bush cut taxes in 2003.
Federal Revenue increased more than 44% from 2003 to 2007.
Matt | 3.16.12 @ 2:44AM
you aren't honestly peddling this... i challenge you to look at tax revenue for each year for the past 80 years, and align that with tax rates... you will be singing a different tune
Thorny| 3.16.12 @ 12:12PM
Bullshit.
Unfunded liabilities per each U.S. taxpayer right now is $1.042756 million.
Sing differently your progressive Keynesian peddled with honesty tune.
Zbigniew Mazurak | 3.16.12 @ 5:21AM
Your claim is patently false and way off the mark. Total military spending in FY2010 was $664 bn, and the budget of the VA Department was ca. $70 bn.
cicero| 3.15.12 @ 3:18PM
Spending growth for the last 3 years has been $1.2trillion to $1.4 trillion in excess of income. In addition, the personal income tax is only one of many taxes. The government took in about $2.4 trillion in total taxes per year over the past 3 yerars, and still overspent by over $1.2 trillion each year. And, without a budget during that period of time, there ios no accounting for where it all went. Enough, already!
LiveFreeOrDie| 3.15.12 @ 6:09PM
"...in the 50 or 57 state capitals."
Interesting. It's fine to allude to Obama's Muslim word slip but nobody has the chutzpah to cover Arpaio's investigation. When MSNBC provides a balanced report, at least in the AZ edition, and Amspec only mentions it in The Day Ahead section as "bizarre" I think there's a problem.
I've heard over and over again that the left is capable of anything. Over and over again there's nothing they won't do. The ends justify the means in their eyes. Yet the Arpaio investigation goes on ignore because it's just not possible? Really?
Meh.
POST American| 3.15.12 @ 11:53PM
----AAAAAAGAIN
putting this decades stale capstone breakdown
to one side-----
AS Def Sec 'PAN--NET---uh' is now,
quite reasonably AFRAID to stand before
armed American troops after his act of
full blown TREASON before Congress
"NOTICE, as the REAL campaign approaches,
the REAL issues 'disappear'"
AND just 2 weeks after poor Andrew Breitbart,
and the substance of his 'BAR--Rockefeller'
Obama collega videos 'disappear'
---REMEMBER---!
NDAA 1021 in virulantly ANTI-Consitutional
fashion ---decrees OUR 'disappearance as
well ---HERE ---and NOW
in this, the 11th hour of the CFR/Rockefeller
RED China handover, TREASON, DE---in--dust
--realization' and FINAL EUGENICS OP.
YOU WERE WARNED------------TIRELESSLY
-------------------------------------RELENTLESSLY
----------------------------------UNFLINCHINGLY
HAVE YOU cleaned the gov ops? --Rockefeller
SAP OPS? ---infiltrators and Arminian
heretics and 'MAY-SIN---Re' from your churches?
HAVE YOU hurled your mind control TVs?
---and gotten the PCs OUT of your private
spaces?
HAVE YOU stopped, or curtailed the use of
data tracking credit cards?
HAVE YOU demanded those responsible for
the ---now worldwide-- GMO food Halocaust
face justice? (ie Bill Gates/Monsanto/Rothchild)
HAVE YOU pitched the mind control,
mercury saturated, UN mandated, searingly
white, flourescent light bulbs from home and office?
In short --------HAVE YOU BEEN A MAN?
IF NOT
the blood of Globalism ----and soon, quite
possibly, your very own blood --be upon you.