Voter approved “Targeted Tax” measures may miss intended targets

Tax and spend liberals plan to put multiple measures before California voters in 2006 to increase taxes on specific groups in order to support increased spending in specific areas. However, evidence is mounting that revenues from such taxes often do not reach their intended targets.

The Orange County Register published an article this weekend stating:

California voters may be asked to approve new taxes on alcohol, cigarettes and high incomes next year that could dramatically expand the state’s budget for preschool, public safety and health care.

These are exactly the kinds of taxes that have the best chance of winning voter approval: targeted taxes that take money from a relatively small group of people – such as the rich or smokers – and require that the proceeds be dedicated to a specific program, such as early childhood development or health care.

These taxes are popular because the outcome is predicted.

“People have a general feeling that government wastes their money, so if they see, ‘Here’s a tax, and we will spend it only on this purpose,’ the probability of it passing is higher,” said John Ellwood, public policy professor at UC Berkeley.

An examination of recent voter-approved tax measures shows that the measures do indeed bring in money, but after that things don’t always go as expected.

The article goes on to point out how voter approved initiatives have brought billions of dollars in additional tax revenue into state coffers and how those revenues have often been redirected by state lawmakers or misspent by the agencies directed to administer the funds. It also points out how people are illegally and legally finding ways to avoid paying these new taxes.

What is not addressed is a discussion of who will be required to foot the bill for these new programs once tax revenues fall short of expectations. Any guesses?

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Two here are two previous posts on ballot box budgeting measures targeted for 2006.

Ballot Box Budgeting…Tax hikes & increased govt. spending coming to a ballot near you!

And

“Wealth Tax” Initiative qualifies for circulation in California…

Craig DeLuz

Visit The Home of Uncommon Sense…
www.craigdeluz.com