Even Dick Cheney would think Gov. LePage’s income tax plan is extreme
Governor LePage wants to amend the state constitution to get rid of Maine’s income tax, but a bipartisan legislative committee just made it very unlikely that he’ll get his way.
That’s a good thing. The governor’s amendment is premised on an old idea: that streamlining big central government will leaving more money with taxpayers and provide more authority and budgetary autonomy for local governments. Political Scientists call that idea “devolution,” and once upon a time, Ronald Reagan built a few campaigns for president around it.
The problem is that devolution is a shell game. It makes rational budgeting harder, shrugs off important governmental responsibilities, and it actually creates more expenses for taxpayers, whose local taxes go up to deal, in an ineffective and piecemeal fashion, with the problems that the central government won’t handle. It’s comparable to the administration’s new call to deny welfare benefits to people with drug convictions: the end result may save money in one part of the budget, but will increase costs in another — less money spent on food stamps, more money spent dealing with the consequences of homelessness, hunger, and health and safety threats to the children of people suffering from addiction.
But don’t take my word for it. You know who made an excellent case against the kind of “tax re-form” that the governor is trying to achieve here? Dick Cheney. Dick Cheney was exactly right on this issue.
That’s one of those “man bites dog” sentences, intended to grab your attention. It’s a sentence I’ve never said before, and you need to go back to 1976 to get the evidence for it, but a fight within the Republican presidential primaries of that year casts an interesting light on the recent battle over the LePage income tax idea.
In ’76, Cheney was both chief of staff and campaign manager for President Gerald Ford, and found himself in the position of defending the incumbent president against a challenge in his own party, from Ronald Reagan, the hero of the right-wing of the GOP. In a speech to the Chicago Executives Club in September of 1975, Reagan had called for massive cutbacks in welfare spending — some $90 billion worth — and promised, if elected, to “transfer authority and re-sources” back to the states.
It was supposed to be a winning idea for the Republican right, combing anti-welfare policies, states’ rights, and “deficit hawk” rhetoric. But Cheney’s campaign people seized on the speech as evidence that Reagan was really trying to clear the federal government’s books by passing expenses downhill. “Transferring authority” over social welfare pro-grams to the states, after all, didn’t mean that resources would be transferred to the states. In New Hampshire (then, as now, a crucial early primary), Ford’s people argued that Reagan was going to force the legislature to either gut budgets for fire and police departments, road repair, and libraries, or impose sales and income taxes. Reagan tried to laugh off their argument, but eventually he cried uncle — “I guess I made a mistake in Chicago last September.” The con-cession came too late to save his campaign in New Hampshire, and the crucial early momentum went to the president. (Rick Perlstein tells this story much better than I do, in his book The Invisible Bridge, which came out last year.)
But back to LePage’s loss in the Taxation Committee on May 13th. That’s when the committee met to consider LD 1367, the governor’s plan to amend the state constitution and eliminate Maine’s income tax by 2020. LePage has been vague on how Maine will pay for its essential funding responsibilities, though he has called for incremental stages of lowering the income tax and raising sales taxes, which gives us some idea. Committee member Paul Davis (Repub-lican of Sangerville) called the bill “bold,” and said that he “believes” it will increase business activity, which is one way of saying, “This is a huge leap in the dark that I like to think may work out.”
The Republicans on the committee did vote for the proposal, but without a clear idea of what this change to the constitution will mean, or how we will maintain vital state services, it’s hard to see the path ahead to the necessary 2/3 majorities in both chambers of the state legislature.
Even conservatives within LePage’s caucus have good reason to be cautious about this step. As Dick Cheney’s campaign team pointed out back in 1976, cutting back on the central government’s resources isn’t a particularly conservative approach to governance.
Think of it this way: I might spend way too much money on food, and there should be some rethinking of budgetary priorities at our house, but lowering my income would be an incredibly reckless way to deal with the problem. I couldn’t even call it a “bold” initiative with a straight face.
Of course, four years after his defeat in the Republican primaries, Reagan ran again, and won, and he did begin the process of devolution. (Apropos of nothing, “devolution” also means “degeneration to a lower or worse state.”) And Dick Cheney, it turns out, was right. Underfunding social welfare programs at the federal level didn’t actually save money; it meant that other budgets had to be redirected to attempt to deal with old issues with insufficient resources. It meant that serious problems — the sky-rocketing of homelessness among children, the rollback of assistance for families living in poverty, and the total failure of TANF to keep up with the unemployed during the Great Recession, for example — were dealt with by reckless after-the-fact budgeting. And it meant new problems whose legacy we’re still dealing with now.
The Taxation Committee did a good thing on the 13th by rejecting the governor’s proposed amendment to our constitution. When Dick Cheney, the most radical, dangerous American vice-president since Aaron Burr, thinks “conservative” budgetary plans like yours are actually reckless boondoggles, it’s probably a good idea to think twice.
Photo credit: White House Archive
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