Red State Tax Increases and the Failure of the Anti-Tax Movement

On top of the vote in Arizona, the Kansas Legislature recently approved a one cent sales tax increase that will take effect July 1 and bring in over $3 million in revenue to avoid cuts in school programs.  Despite a vitriolic Tea Party campaign against revenue generation, St. Louis, Missouri passed a half-cent sales tax increase to restore bus lines that had been defunded and to eventually expand the city's mass transit system.

In South Carolina, the House recently voted to override Gov. Mark Sanford's veto of HB 3584 and approved an increase of  the state's cigarette tax by 50 cents.  Several conservative South Carolina lawmakers, who had previously signed on to an Americans for Tax Reform letter to not raise taxes, refused to abide by it and voted for the tax as well.  Similarly, two Kansas House members who had signed the pledge were the margin of victory for passing the sales tax in that state.  Though regressive, the new sales and excise taxes will provide funding for education and other essential services.

And even in fervently and vocally anti-tax Georgia, the Legislature imposed a temporary 1.45 percent hospital fee and raised other fees to cut the budget deficit.

Myth of an Anti-Tax Electorate: Many of these conservative leaders are just following the lead of voters across the country.  Even before Arizona and Oregon votes this year, voters and lawmakers have continually rejected anti-tax initiatives, such as the so-called "Taxpayer Bill of Rights" (TABOR), over the last five years.  Just last November, voters in Maine and Washington disapproved of these types of deleterious measures.  In 2008, similar initiatives were defeated in Massachusetts, North Dakota and Oregon.  In all three states, proposed initiatives that would have slashed or, in the case of Massachusetts, completely eliminated the income tax, were rejected at the polls. In 2006, voters in Maine, Nebraska and Oregon each rejected TABOR ballot initiatives.

In response, legislatures have increasingly taken their cue from voters, not the empty threats of the anti-tax ideologues. Of the 28 right-wing attempts to introduce TABOR legislatively, Colorado is the only state that has adopted this disastrous policy.  As the Ballot Initiative Strategy Center finds, "the Grover Norquist, Club for Growth, Glenn Beck, Tea Party crowd tried to use the bleak budget picture as an opportunity to ratchet down even harder as states look to find the revenue necessary to protect priorities, create jobs, and get their economies going -- but voters rejected that failed approach."

Raising Taxes is the Norm in Recessions:  In 2008 and 2009, over 30 states increased taxes as a response to the recession, as the March 2010 map above displays-- with additional states like Arizona, South Carolina, Georgia and Kansas filling in additional states since then.  As CBPP indicates, this parallels a general trend of states increasing revenue during recent economic downturns--"in the recession of the early 1990s, some 44 states raised taxes; in the early 2000s, some 30 states did so."  Raising revenue is typical during recessions.