News » November 30, 2006

Turning Back the Tax Revolt

Voters reject “Taxpayer Bill of Rights” spending cap measures and tax cuts across the country, paving the way to funding progressive priorities.

By Matt Singer

Rep. Jan Schakowsky (D-Ill.) and other Democrats have taken back America. Now what?

Isn’t it nice to get some good news? Finally, electoral victories are paving the way for real progressive success. Even better, ballot measure victories have even provided the beginnings of a progressive policy playbook.

At the federal level, narrow victory margins and the continued presence of the Bush administration are likely to stymie progressive reforms. The states, however, are a different story. Democrats now control the “trifecta”—Senate, House, and Governorship—in 15 states. Republicans, in comparison, hold only ten. And in a number of other states, Democratic majorities have Republican governors who campaigned on progressive values.

Even better news comes in the form of the apparent end of the tax revolt: voters rejected a number of so-called “Taxpayers’ Bill of Rights” (TABOR) spending cap measures and tax cuts in states across the country. New York City developer-turned-libertarian financier Howard Rich worked with a handful of friends to try and qualify as many as 35 anti-government ballot initiatives. Only one proved successful. Voters also outright rejected a number of tax cuts, including an estate tax repeal that was rejected by more than 60 percent of Washington state voters.

The end of the tax revolt means an opportunity to fund progressive priorities, provided that revenue-enhancing strategies are thought through carefully in advance. So what policies are we likely to see pushed to the front burner in this new, more progressive era? In addition to more minimum wage and paid sick leave proposals, expect to see these issues jump to the front of the line:

• Energy Independence: Washington became the most recent state to embrace energy independence by adopting a Renewable Energy Portfolio Standard, which requires utilities to purchase a certain portion of their energy from clean sources. This creates jobs while fighting global warming—a win-win for everyone that is popular with voters.
• Health Care for All Children: While some states—most notably Wisconsin and Oregon—are set on a path for health care for all, virtually any state can make significant progress by embracing health care for all children. State efforts would coincide with the federal re-upping of State Children’s Health Insurance Program.
• Fix Elections: After stories reporting voting problems hit the wires in the early morning of Election Day, interest kicked up yet again in Vote by Mail as a sound, paper-trail-included alternative to the current plagued polling place method. Also catching progressives’ eyes is election-day voter registration, credited with turning out more young voters in states like Minnesota.
• Expanded Prescription Drug Access: Improving Medicare Part D tops the Democratic agenda in D.C., but voters in Oregon proved that states need not wait for Washington when they approved an initiative to expand access to prescription drugs. State governments have significant ability to both increase access to and affordability of prescription drugs.
• Ethics Reform: 2006 was a banner year for anti-corruption efforts. New Hampshire Democrats took both chambers of the legislature, partly on the strength of their governor’s ethics push. In Montana, voters overwhelmingly approved a temporary lobbying ban by former government officials. States should also look at ending pay-to-play campaign contributions by government contractors, preventing self-interest from guiding decisions about whether and how to privatize government services.
• Expanded Early Childhood Education: With victories for ballot measures to increase funding for early childhood education in both Arizona and Nebraska, expect this movement to gather steam—great news for the next generation that will benefit seriously from the move.

These measures are hardly a full progressive agenda, but combined, they are notable for their diversity and importance, tackling the issues that are on the minds of Americans: getting the economy to treat workers fairly, expanding health care access while reining in costs, and guaranteeing opportunity for the next generation.

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• Reader Comments

  The end of the tax revolt means an opportunity to fund progressive priorities,

  End of the revolt? Hardly. Any “funding” will be done at the expense of the middle class. Picking the pockets of hard working Americans to fund ill conceived progressive agendas that only serve the bottom 10 percent of citizens will only exacerbate the pain felt by all. The revolt has not begun.  Wait until the average middle class tax bill doubles . If progressives want to help the working man stay the hell out of his wallet.

  Posted by texasindependent on Nov 30, 2006 at 3:25 PM

  The end of the tax revolt means more progressive reform?
  If that wasn’t so foolish, I’d be marginally amused.
  If I knew with certainty that my taxes were going to be used for my benefit and the benefit of The People (remember them? ---the ones who put Democrats back on the political map?), I’d gladly pay my taxes. I would be assured that my money would be put to work for the benefit of The People and not the political elite. No, I agree with the previous posting; the Tax Revolt has not even begun.
  Do something worthy with the billions we all pay each day in taxes (especially on April 15th) and you might convince me and many others that our revolt should be discontinued.

  Until then, prepare for battle.

  Posted by awrifford on Nov 30, 2006 at 8:49 PM

  Texas Independant, you are far more Texas than Independant!!

  It is all to easy to forget that the bottom 10% has never much benefited from US progressive federal programs and never were able to do so. AFDC is gone. Social Security should be saved as people worked hard for years for low wages and also put into the system. A far greater amount of federal subsidies go to the working and middle classes. These programs entail, but are not limited to, educational loans, small business loans, farm subsidies, subsidized mortgages, the GI bill, and tax deferred retirement accounts.  These are all middle class subsidies and they far outnumber anything given to the hard core poor in dollar terms or number of programs. They also keep the economy going. But they cost money in taxes. This is not a reason to shun these programs. The money spent repays the middle class many times over so long as the economy continues to grow.

  Posted by cabdriverinchicago on Dec 1, 2006 at 12:50 AM

  First let me make it quite clear I have compassion and give both of my time and money to various charitable causes. I understand poverty and hunger and have suffered both. However our welfare system as it exists is an enormous waste of money. It would be cheaper to simply hire the 4 million recipients as federal employees.

  Loaning our money back to us hardly qualifies as a benefit. Subsidized mortgages are “free” unless a default occurs. The GI bill is EARNED not given. Tax deferred accounts are not federal money and provide the only salvation from the horrors of SSI . The entire agriculture budget is less than 1 percent of the federal budget. Education is less than three percent.  The totals for Medicaid, Unemployment, and Welfare is only 643.4 billion dollars. Social Security and Medicare are a paltry 980 billion dollars.

  It doesn’t matter what liberal spin you guys put on these numbers 58 percent of our federal tax dollars are spent on social programs that benefit the elderly and poor and have no real benefit to the working middle class except to ease white liberal guilt. And you need more? I realize progressives have good intentions but a harsh dose of reality would help us all out.

  Sweden touted as a model to admire and emulate has a tax rate from 30 to 55 percent on individual income with 25 percent to local government.. Thats direct from the Swedish government. Is that the progressive goal? To tax us into submission?

  The highest federal tax bracket in the US is 35 percent. Most working families pay state tax ( except Texas and eight other states) the highest is Vermont at 9.5 percent ( what a surprise).  The vast majority of that money is coming direct from middle class paychecks. Even if you taxed the “rich” at a ridiculous rate as progressives love to yammer about, the middle class would still carry the largest burden. I propose a simple solution. That silly tenth amendment. Crush the Federal monster down to a small managable size and direct it onto providing a common defense and ensuring justice and let the powers not specified in the Constitution ( almost every government department) revert to the people or the states as the founders intended. I can provide for my own welfare once I get your hands out of my wallet. 

  I am tired of taxation without representation. Let the revolt begin!

  Posted by texasindependent on Dec 2, 2006 at 12:51 AM

  Texas,

  In the first place you claim that the US federal budget is 58% committed to programs for the poor and elderly. That would mean nearly 1.5 trillion are committed to these programs which is not true. Social Security payouts are about half a trillion annually and don’t come out of the federal budget but from a separate fund.  TANF blockgrants have averaged around $16 to $17 billion annually since the law was passed in 1996. In the years since the law was passed the TANF participation rate nation wide has slid from 67% in 1996 to 48% in 2001 and 2002. Still fewer that half the eligible population collect benefits under the terms of TANF. Most states use less than $400 million in TANF disbursements and many states disburse even less that $100 million. Most TANF recipients get less than they would have received under the old AFDC program. Programs for the poor don’t amount to anything any longer. They’re all but gone. The middle class once received a lot more for their tax contributions.

  As far as Social Security is concerned, tax deferments cost the federal government nearly $115 billion in taxes or about a fourth of the annual payout in transfer payments of the entire program. Despite this fact fewer and fewer people have retirement savings and the income recovery rate, or rate of monthly retirement income received as a percentage of monthly income in the final year of employment, is declining for both Social Security recipients and defined contribution recipients. These folks get between 30% and 67% of their working income well below the recommended 70%. As income becomes more skewed and the equities market less stable retirement income will become lower and lower for most retirees.  Wall Street may be getting rich off private retirement accounts but they’re not taking care of the retirees who save. Most people with such accounts receive less than $100,000 at retirement in a lump sum and less than that after taxes to live out the remaining 20 or so average years of retirement. It’s not much today. The median retirement account pays very small annuities. And despite so much savings committed to retirement accounts less than 60% of Americans will receive anything other than SS for retirement.

  The idea that the poor and elderly and even the middle and working classes are getting the benefit of the federal budget is nonsense. The American people are the lowest taxed people in the industrialized world. Top bracket for the very rich is now 35%. Local and state taxes are increasing as are property taxes and sales taxes. The working and middle classes are paying these on behalf of the richest 1% of the country who got much of their tax payments rebated by our fearless leader. Inequality is growing and it is not because of taxes. Wages and income are down and the benefits the middle and working class received as part of the social safty net are gone. Most people can’t get decent housing, health care, or education for their families the cost of which is going up at a rate faster that the median national income. There is no more talk or white liberal guilt tex but we as a working society are burdened with the stupid consequences of your displaced white male rage.  Taxes aren’t what’s harming the lower 80% of society, it’s social inequality. Even if most people below the median paid no taxes at all, they’ld still be up shits creek. Think about it Tex.

  Posted by cabdriverinchicago on Dec 3, 2006 at 3:07 AM

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