The deterioration and degradation of America continues apace. Maintaining the things that provide for good public services and infrastructure takes money but increasing personal income taxes to pay for such services has now become seen as an unconscionable imposition. Some states have resorted to raising taxes to pay for specific functions, perhaps hoping that this close link between taxes and expenditure will appease people who think that their tax money is being wasted.
But this strategy has its own perils. Alec MacGillis says that one such tax may have doomed the chances of the Democratic candidate for governor in the usually reliable Democratic state of Maryland where, in addition to him being a weak candidate, there was partly a revolt against a small tax of $21 to $39 for homeowners to help reduce the pollution in Chesapeake Bay caused by storm water runoff. This was labeled a ‘rain tax’ and was portrayed as some kind of immense over-reach by the government.
Yet everyone I spoke with cited it as the crowning example of the nickel-and-diming taxing regime under O’Malley that also includes the $60-per-year “flush tax” to upgrade sewage treatment plants and higher taxes on alcohol, cigarettes, and gas. “The rain tax was the last straw,” said Mike Eline, 64, who does pest control at the University of Maryland campus in Baltimore. “How many taxes can there possibly be?” “It seems any reason they can, they say, ‘let’s tax the people,’” said Daniel, a 63-year-old African-American warehouse worker. “What really upsets me is the rain tax. Rain is something natural that’s just given to us. Nobody has to work for it. But they say, ‘let’s tax it.’”
Kevin Drum draws a comparison of this year’s Maryland race with how Arnold Schwarzenegger rode to the governorship on another trumped up issue over a car tax.
As a native Californian, this naturally brings back memories of the infamous “car tax,” which Arnold Schwarzenegger cynically rode to victory in a special election in 2003. And this wasn’t even a new tax. A few years earlier the vehicle license fee had been lowered under Governor Gray Davis, but with a proviso that it would go back up if state finances deteriorated. Sure enough, when the dotcom boom turned into the dotcom bust, the state budget tanked and eventually Davis signed an order restoring the old VLF rates. But the VLF never actually increased; it merely returned to the same level it was at before it had been cut.
It didn’t matter. Schwarzenegger ran endless TV commercials starring ordinary citizens who simply couldn’t believe that anyone expected them to survive if they had to pay the outrageous Democrat car tax. It was just more than a body could bear. (Yes, that really was the tone of the ads. I’m not making it up.) All this caterwauling was over an average of about $70 in taxes that everyone had been paying with no noticeable distress just four years earlier.
So that is where we stand. General income taxes are bad because they are wasted on inefficiencies and profligacy and there is nothing to show for them. Small, targeted taxes are bad because people feel they are being nickel-and-dimed.
It looks like we will have to wait for a complete collapse before people realize that you cannot have nice things without paying for them.