Tax Limitation: A First Step, Not the Last One
Tax limitation first became popular in the late 1970s in California.
Proposition 13 rolled back property taxes and put a lid on Big Government growth in California.
Tax rollbacks and tax limitation ballot initiatives swept the nation.
In 1980, Proposition 2½ limited property tax increases to 2 ½ % each year in Massachusetts.
In 1992, TABOR both limited state expenditure growth and mandated refunds to taxpayers of all surplus revenues in Colorado.
Now we must build on the work of citizens who advanced tax limitation. We must add bold tax reduction. Here’s why.
Federal, state, and local governments have exploded over the last 20 years.
Big Government – and the budgets that fund it – have grown far beyond the rates of inflation and population growth combined. Astronomical debt. Billions of dollars hoarded in rainy day funds. New and expanding government bureaucracies.
Dramatically higher taxes. Dwindling tax deductions.
New tax-fees. Higher tax-fees.
Higher alternative minimums. Higher thresholds of income subject to Social Security tax.
New and increased taxes on retail sales, alcohol, phone services, utilities, gasoline, meals, tobacco, Medicare, gun permits and mortgages, to name just a few.
New income tax penalties when you don’t buy state-mandated medical insurance (whether or not you need it, want it, or can afford it).
Businesses are increasingly burdened, sometimes to the point of bankruptcy, with higher payroll taxes, new regulations, and expanding employee benefit mandates.
Individuals are increasingly burdened, sometimes to the point of having to lose their homes, with higher property taxes and regulations that drive up the cost of living – such as higher credit card fees.
The hidden tax we pay when the Federal Reserve prints money, which devalues the dollar and raises our prices, is yet another huge tax that keeps growing, and growing, and growing.
Local governments and local schools keep growing and getting more expensive – even though they are increasingly controlled by centralized, authoritative state and federal bureaucracies.
Why didn’t tax limitation stop the growth of Big Government? Why didn’t tax limits curb this massive growth?
Because tax limitation is designed to slow the growth of Big Government. Not to stop it. Not to freeze it. Not to make government small.
Tax limitation allows government to grow. Massachusetts property taxes grow at least 2 ½% every year. State government grows even faster.
This happened in California and in every other state that passed tax limitation.
Given the shameless demands of state legislatures, would taxes be even higher today without the work of tax limiters?
But even with tax limitation, taxes have roughly doubled at both the state and local levels in just ten years. In Massachusetts, property taxes have doubled and continue to rise an average of over 5% every year — well beyond the 2-1/2% limit set by Prop 2-1/2.
Politicians have expanded the federal government and most state and local governments FOURFOLD since the first tax limitation measure passed 30 years ago.
If you are satisfied to curb the growth of Big Government and to slow the rate at which taxes grow, then tax limitation is all you need.
If allowing Big Government to double in size every ten years is OK with you, then tax limitation is all we need.
But if want Big Government to shrink – or even just to stay where it is – we must do MUCH MORE than limit its growth. Regular tax and spending cuts are necessary just to maintain the Big Government status quo. To offset the rapid growth of Big Government.
If you want to move in the direction of small government, then we must cut taxes boldly and immediately.
We must substantially reduce the total taxes taken by government. We must slash spending and close down wasteful, ineffective, and damaging government bureaucracies.
We must challenge not just the presumption that government needs more of our money. We must expose the harmful results of Big Government spending already in place.
We must advance the idea that government needs less of our money. That you, I and every taxpayer will be better off wiht less government.
We must advance the idea that government itself will be not just leaner but BETTER, far less corrupt, and much more effective when we feed it only the money it needs – and no more.
We must attach these ideas to actual reductions. REPEATEDLY! We need a rapid succession of tax cuts, spending cuts, and reductions-repeals-removals of Big Government Programs.
The 2002 Ballot Initiative to End the State Income Tax in Massachusetts was one attempt to boldly cut back the size of Big Government. It won 45.3% of the vote (885,683 votes). It proved that there’s broad support for bold reductions in state government taxation and spending — even in liberal Massachusetts.
The 2008 Ballot Initiative, also to End the State Income Tax in Massachusetts, was another attempt. It got 901,802 votes.
These initiatives proved that bold proposals to shrink Big Government are possible.
While neither of them passed, nor do all tax limitation initiatives.
The very best a tax limitation can do is win – and keep Big Gvernment Big.
The worst that a bold reduction can do is lose – and keep Big Government Big. The best it can do is actually shrink today’s Big Government.
Proposals to boldly reduce Big Government make small government possible. Especially when they are the featured proposal of a candidate’s campaign for office or a ballot measure that voters can directly enact into law.
Another small government proposal is brewing in Massachusetts: a Ballot Initiative to cut the sales tax in half. It’s headed for the ballot in 2010.
If you want to actually stop the growth of Big Government, or shrink it, look for candidates and ballot initiatives that go beyond tax limitation to tax reduction. That go beyond opposing Big Government to reducing Big Government. That go beyond government spending limitation to overall government spending reduction.