Reply #23: The Tax-Reform Racket (Mises) [View All]

http://www.mises.org/fullstory.aspx?control=1727&id=76

I come to you from a state with a Republican governor, elected to cut government but who, in 2003, attempted to pass the largest tax increase in the history of the state. In the same bill, which the state constitution required be submitted to public vote, the governor sought to change the constitution to make it easier on every future governor to raise taxes.

The governor invested every bit of political capital he had. During the push, he enjoyed the plaudits of the press and the fawning of the public sector. Of course he was heralded for his steadfast courage, his refreshing honesty, his hopefulness in the face of cynicism, and all the rest. They even tolerated his religious right vocabulary, given his claim that Jesus wants higher taxes.

The proposal failed by a vote of 2 to 1. It doesn't take a political scientist to understand why. People figured that they fork over quite enough to the government and they didn't want to give any more money to these birds to build their nests. This was one of the most inspiring moments I can ever recall in politics.

Interestingly, the governor was careful not to call his bill a tax increase. He called it a tax reform. He claimed that he was not raising taxes. He was making them more fair. He wasn't increasing the burden. He was lightening it on the neediest among us, while asking the richest to attend to their civic obligations.

But people saw through this rhetoric.

It used to be said that the Democrats were the evil party and the Republicans the stupid party. My impression of late is that these monikers have switched. However, not even a conservative Republican who claimed to be devoted to freedom and limited government could pass off an attempted heist as an act of benevolence. There are important lessons here for all of us, which I would like to apply to tax politics at the federal level.

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