Taxes Blog

Finance Blogs » Taxes » Taxes left to voters: Not a good idea

Taxes left to voters: Not a good idea

By Kay Bell · Bankrate.com
Thursday, June 3, 2010
Posted: 2 pm ET

It's an election year, and while a lot of folks are focusing on what might happen with the midterm votes for members of Congress, some state balloting will have a direct effect on taxes.

In fact, Arizona voters last month decided they wanted to raise their taxes.

That's right. The Grand Canyon State electorate decided to shift talk away from immigration by agreeing to up the state's sales tax to 6.6 percent on July 1.

The vote, championed by its Republican governor, was a dramatic shift from the state's traditional anti-tax position. But voters apparently felt that the temporary sales tax hike -- it will be in place, or so officials say, for just three years -- was better than the $2 billion in cuts lawmakers said would have to be imposed if the tax hike vote failed.

Personally, I find the fact that the tax increase was left directly to voters more interesting, and disturbing,  than the actual result.

Ballot initiatives have been around forever. The most famous tax one still is California's Proposition 13, which in 1978 sparked a property tax revolt not only in the Golden State, but nationwide.

I hate ballot initiatives.

There, I said it. We elect legislators to make our laws. When did they become too wimpy to take a stand and enact laws themselves? Now they want to get out of the line of fire -- and responsibility -- by turning over all the decisions to the voters.

We already have that power. We elect lawmakers in the first place. We can still tell them what laws we do and don't want them to enact. If they ignore us, we can unelect them!

But, say initiative advocates, this is direct government. Plus, they add, it's the only way to sidestep the powerful lobbyists who get more of our lawmakers' attention thanks to campaign contributions.

To that I say, pshaw (for the sake of saying something that can be printed here)!

Guess what? With ballot initiatives, measures are too often enacted based on which side has the most money.

Take, for example, the vote next Tuesday in Maine where residents (or those registered to vote) will decide whether to overhaul that state's tax system.

Last year, Down East voters passed a law changing their tax system. Now some want to repeal the measure. On June 8, Maine voters will decide whether to decrease the top income tax rate from 8.5 percent to 6.85 percent and set a flat rate of 6.5 percent for taxable income below $250,000. To pay for the change, the state's 5 percent sales tax would be expanded to services.

I don't live in Maine, so far be it from me to tell taxpayers there what tax system works best for them.

But the average Joe and Julie Mainer aren't the only ones involved in this ballot initiative battle.

The Maine Association of Realtors is a major contributor to the effort to repeal the state's tax reform law. Final pre-election filings show the Realtors reported raising $222,589 in support of repeal, most of it contributed by its national affiliate, the National Association of Realtors.

So a national group is bankrolling efforts for a state tax question. Sound familiar?

Obviously, I am in the minority when it comes to state ballot initiatives. In addition to Arizona and Maine, tax-related measures will be on ballots in Colorado, North Dakota, Oklahoma, Florida, Indiana, Louisiana, Missouri, California, Georgia and Alaska.

If you live in any of these states, I hope for your tax sake that the more well-financed supporters or opponents agree with your position. If not, your vote is likely not to count any more than that of your legislator who passed the law-making buck to you at the ballot box.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.