Anti-tax initiatives are a cruel diversion

By Ed Muir

IT LOOKS LIKE there will be some tough times ahead. Unemployment is up. Personal income is down. The bursting of the housing bubble has stopped Wall Street in its tracks. The federal government has authorized putting $450 billion out on the street to buy up mortgage-backed securities, a bailout that's potentially bigger than the Savings and Loan bailout in the 1990s. The combined result? Tax collections are down. As more families need to rely on public services, the dollars to provide them are contracting.

For some of us, this is a problem. For others, it's a political opportunity. As a result, there are potential ballot initiatives to limit state and local spending or cut taxes in a dozen states. Among the backers of these initiatives are those who really do think tax cuts pay for themselves. But the people driving this bus, groups with nice-sounding names like Americans for Tax Reform and Americans for Prosperity, see this as a way to distract unions and tie down their resources as we head into a presidential election.

The Florida Education Association, the merged AFT-NEA state affiliate, already is battling inside the state's Tax and Budget Reform Commission. This is supposed to be a body of wise men and women who meet once every 20 years to decide if the Florida Constitution needs to be changed. The current commission includes a large number of colleagues of former Gov. Jeb Bush. At this writing, they are discussing placing a spending cap and a property tax cut on the ballot. The net effect would decimate funding for schools.

In Michigan, the proposal is to eliminate the income tax and the corporate tax and replace them with a sales tax. Because wealthy people don't spend all their money and poor people need to spend every penny, this means that the poor would pay a greater share of the taxes collected and the rich would pay a smaller share.

North Dakota has three proposals: One would put oil trust money in a rainy day fund. One would cut the income tax rates in half and one would institute a spending cap. Any one of these is bad enough, but taken together, they would be extremely harmful.

In Massachusetts, the AFT is part of a coalition fighting an initiative to eliminate the state income tax, which is about one-third of the total amount raised by state and local government. There is no proposal to replace the money, and the backers believe it will force the state to become "more efficient." If you think widening the achievement gap and leaving people in need without good healthcare is efficient, then there may be a point.
Most important, these proposals are an opportunity to change the subject. The economy is tanking. A political solution in Iraq seems distant. We're coming out of an economic recovery in which the rich certainly got richer, yet there are 300,000 more children without health insurance than when the recovery began. You can see why some people in Washington and on the campaign trail would love to focus on whether your property tax is too high or your teachers have overly generous healthcare benefits.