Put On Your Thinking Tax Cap - The American Spectator | USA News and Politics
Put On Your Thinking Tax Cap

While ostensibly pursued for the “greater good,” the idea of collectivization of power at both the state and federal level has always been an elitist enterprise. How could it be anything else? The entire concept of sending power (and, hence, taxpayer dollars) away from towns, cities, and states is based on a fear that small time ruffians wouldn’t know the right thing to do with that power if they tripped over it.

And this is how we end up living under a federal government roundly controlled by the so-called party of “limited government” that nevertheless runs yearly $450 billion-plus deficits and happily continues to expand the scope and spending of government. At the very top it is a party led by a president who loves liberal spending programs (prescription drug benefit, increased funding for the National Endowment for the Arts) and new government departments more than even Richard Nixon. And that’s saying something. (Oh, hey, Nixon’s EPA, I just wanted to introduce you to Bush’s Homeland Security. Now you can both go back to being useless.)

President Bush is promising serious deficit reduction — by 2008, which conveniently happens to be the same year he turns the national credit card over to a new president and goes back to clearing brush full time in Crawford, Texas. One trembles at the thought of what the next Democrat elected president will do with the profligate precedent he has set. Cutting taxes could starve the government beast if we weren’t so willing to spend money we don’t have, and now, consequently, owe to China and Japan.

THE POINT IS, IT’S PROBABLY past time to start looking outside the current power paradigm for answers, and a pretty good place to start might be Franklin, New Hampshire. A tax cap instituted there in 1989 mandating that the new tax rate for any year be no greater than the prior year’s tax rate increased by the rate of inflation has resulted in a popular and successful example of tax and spending reform.

“Caps make you think harder about your budgets,” former Franklin Mayor Tony Giunta explained. “There’s very little room for error. In any other system, there’s less thought put into budgets because if you’re wrong, it’s okay, we’ll just raise taxes and John Q Public will just pay it! Well, in Franklin, we don’t worry about the second scenario. John Q from Franklin was smart enough to pass a tax cap.”

Back in 1988, the tax cap was seen as a “desperate times, desperate measures” type suggestion. Property taxes had jumped 34 percent and 35 percent in back-to-back tax years. Much of the same apocalyptic rhetoric leveled at state and federal tax reformers was brought out: A cap would destroy city government and leave it unprepared for emergencies; the earth would stall on its axis and all poor people would fall off the planet into deep space.

And yet the ballot initiative passed by a two to one margin in 1988. Ten years later a ballot initiative to overturn the tax cap failed by a three to one margin. And those voters weren’t all Republicans. There is a consensus on imposing limits on government that goes beyond party identification.

“The city has flourished not in spite of but because of sound fiscal control forced upon government,” Giunta said, pointing to Franklin’s position as one of the fastest growing cities in New Hampshire’s Lakes Region.

If some calamity should befall the town, however, a clause in the tax cap allows for a two-thirds majority to override its provisions. In 15 years this has never become an issue, at least in part because the popularity for the cap has made tampering with it unnecessarily a risky proposition, but also because the city has prospered.

“As our city’s assessed value grew, and government could only take rate of inflation increases, the other value went to reducing the tax rate,” he said. “There were battles over who is going to get the additional revenue. But to the delight of taxpayers, it was us trying to figure out where to pear down costs as opposed to how much to increase the burden on taxpayers. In essence, taxpayers took control of tax rates out of the hands of the politician and into the hands of the people.”

SINCE LEAVING OFFICE Giunta, along with fellow tax stalwart and Franklin city councilor Ken Merrifield, has told anyone who will listen about the tax cap success. As a result, he is being consulted by reformers in half a dozen New Hampshire towns who want to replicate the program. Several efforts are gaining steam.

“No doubt, there are opposition groups and they are enraged over prospective caps,” Giunta said. “It takes the power of taxation away from them and without that tool special interests are dead.”

Aside from the obvious lack of political will, Giunta sees no reason why some sort of tax cap program cannot be implemented on the state or even federal level.

But, then, Tony Giunta isn’t running for president or Congress. What person with even a slight affinity for common sense would? And until the day someone of a similar temperament does, we’ll all just have to depend on the benevolence of hyperactive representatives implementing grand (if stupid) schemes for our little bit of freedom.

And as these Peter states rob Paul towns to pay the manicured Caesars currently residing in Washington, D.C., one begins to wonder: When will the revolt that began in Franklin truly get under way?

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