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Tax-hike supermajority doesn't add up

Tuesday, September 25, 2012   (0 Comments)
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It's a seductive idea to make it harder for politicians to raise taxes. But it's also a bad idea.

Putting a two-thirds supermajority requirement for future state tax hikes will in effect make permanent the current tax code. That's OK if the current tax structure is perfect and will never need changing. But it's not perfect and future reform — even tax cuts — will be all but impossible if the supermajority referendum is approved by voters Nov. 6.

That's why we urge a NO vote on Proposal 5.

The proposal, supported by a group funded by Ambassador Bridge owner Manuel "Matty" Moroun, is presented as a way to prevent higher taxes by requiring a two-thirds majority of both Michigan legislative chambers in order to increase taxes.

Such a constitutional requirement would let Michigan mirror California, which is reason enough to oppose the measure. California is a legislative fiasco, partly because it is impossible to raise sufficient revenue to balance its budget, much less provide the services its citizens expect and demand.

It's tempting to view this proposal as a way to force discipline upon lawmakers who may otherwise be willing to raise taxes rather than set spending priorities.

But Proposal 5 would do more than that, effectively binding the hands of lawmakers who don't want to raise taxes but who wish to eliminate unfair or outdated loopholes, or who want to adjust to a changing world by implementing tax policy more reflective of the current environment.

Such strategic legislation could be easily blocked by as few as 13 state senators who either bask in the glory of being blindly anti-tax, or who are in the pockets of special interests who unfairly benefit from the loopholes.

Consider Gov. Rick Snyder's successful proposal to cut business taxes and replace them with a tax on pensions. That was a benchmark of his first term in office and was supported by wide margins in the House and Senate. Had Proposal 5 been in effect, it would have been much easier for a small minority to block that move.

That may sound fine for those who opposed the pension tax. However, if Proposal 5 passes, it will be nearly impossible for future legislators to shift the pension tax burden back to business, for instance.

Some opponents of Proposal 5 lament the fact that its passage would make it difficult to increase taxes to fix Michigan's deteriorating road system. That presumes that a tax hike rather than shifting spending priorities is the only option.

However, those who disdain higher taxes for roads should still oppose Proposal 5 because its passage could actually reduce funding for roads. That's because much of Michigan's state funding for roads comes from a tax on the number of gallons of gas sold. Proposal 5 would likely prevent lawmakers from altering that taxing formula as cars become more fuel-efficient or if they quit relying on gas altogether.

Lawmakers are elected to make policy, and tops among their responsibilities is a fair and effective tax structure. If they fail to do so, or if their solution is anathema to voters, then that can be remedied at the ballot box.

Even with a simple majority, it's not that easy to raise taxes in this state. There is no reason to demand a supermajority. It's bad government to bake such a foolish requirement into the constitution.

Vote against politicians if you disagree with their tax votes. That's a much more effective way to govern than the problems that will be created by Proposal 5.

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