Finance

Tax Revolt Turns Tepid

Raising taxes isn't proving fatal to most politicians who risked doing it.
by | December 2005

This political year isn't ending quite the way the anti-tax movement hoped it would. Last month, Colorado voters suspended the nation's showcase tax-limitation law, returning to the state treasury $4 billion over the next five years that was previously marked for taxpayer refunds. California voters rejected Governor Arnold Schwarzenegger's spending-limit initiative, which he presented as the only alternative to a tax increase. And the electorate in Washington State, three years after repealing a plan to increase gas taxes to pay for road projects, reconsidered and approved a new 9.5 cent tax.

Perhaps most telling, architects of significant tax increases paid no price at the polls. Mayor Michael Bloomberg won a second term in a landslide after engineering the largest property tax increase New York City has ever seen. In Virginia, efforts to unseat legislators who supported the commonwealth's big tax package proved hollow. Meanwhile, Lieutenant Governor Tim Kaine won the governorship running explicitly as the keeper of Governor Mark Warner's policy flames--higher taxes and all. This in a state where the most powerful political slogan a few years ago was "no car tax."

"The Kaine victory is the exclamation point," says Larry Sabato, head of the University of Virginia's Center for Politics. "Who would have believed that Virginia would ratify the largest tax increase in its history by electing the chosen successor of the governor who secured the tax hike?"

Most of these elections had a similar underlying dynamic. Democratic leaders were generally united in favor of preserving or increasing revenues, while Republicans found themselves split between the militant anti-tax faction and business groups that wanted more money for schools and transportation. Supporters of higher revenue were careful to suggest that they weren't increasing the size of government, just trying to meet expenses that had come due.

Opponents in each case tried to make the argument that voters were being asked to support a classic tax hike but generally failed to convince them. The Colorado measure "was definitely not cast as a tax increase," says Chris Kinnan, of Citizens for a Sound Economy, who fought against it. "In fact," Kinnan points out, "the first three words were 'without raising taxes.' It was a failure on our side to communicate that this was a tax increase."

If the excitement seems to have gone out of anti-tax politics, the movement's adherents profess to being confident that the issue still has legs. Both candidates in New Jersey's gubernatorial contest stressed their desire to lower property taxes. Several governors standing for reelection next year, including some Democrats, plan to tout their success in filling billion-dollar deficits without having raised broad-based taxes. And despite the setbacks in Colorado and California, tax- and spending-limitation measures are scheduled for consideration in several states, including Ohio, Oregon and Wisconsin.

But anti-tax fever does appear to have cooled, at least for now. Voters never complain that their taxes are too low. But they can be convinced, by the right messengers operating in the right set of circumstances, that they should spend some money paying for the government they have already ordered.

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