The Taxpayer Protection Pledge alllowed Republicans to protect themselves and taxpayers alike.
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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.
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