First Principles

The original Conservatives were very concerned with what words meant, and how they were used.

When asking the question, “Is the Taxpayer Protection Pledge Conservative?”, once must first know what the pledge says, and know what we mean by “Conservative.”  I’ve written about the later for years, but if you need a review on my starting point, you can find it here.

The short version, though, is that “Conservatives” are “conserving” the Enlightenment principles of the supremacy of individual liberty, with government’s legitimate role being to protect the life, liberty, and economic opportunity of those individuals.  Conservative government policy, then, should work to protect and promote individual liberty.  Therefore, if the Tax Pledge does not have the effect of maximizing individual liberty within a society, it’s not “Conservative” in any recognizable sense.

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So – what is the pledge?  Here it is, in its entirety:

I, ________________________, pledge to the taxpayers of the _______ District of the state of ____________________ and all the people of this state that I will oppose and vote against any and all efforts to increase taxes.

“Taxes” is not defined in the pledge.  Certainly regular, no kidding things like property taxes apply.  Do user fees, for say, State Park entry count?  DMV fees?  Bridge or road tolls?  What about fines for felonies?  Traffic tickets?  Court filing fees?  What about expenses like public school uniforms?

How about public debt?  If the City of Reno issues bonds to pay for an economic development project which fails to realize expected profit and tax receipts, is that a tax?  The taxpayers are certainly on the hook for it.  Does it depend on whether the project is successful or not?  What about public employee pensions which we know are under-funded?

What about regulations or mandates?  If any health insurance policy I want to buy MUST cover me in case I suddenly develop autism or get pregnant, even though such coverage is meaningless and unwanted to me, is that a tax?  If my business is forced to upgrade a sprinkler system to comply with new fire codes, and that upgrade costs me money, have I been taxed?

What if a state government forced people to buy a product from a private, third party?  Certainly this is not “conservative,” but is it a tax?

On the federal level, the deductions from your paycheck that go to Social Security are legally a “tax”.  In Nevada, public employees in PERS (the state’s public employee pension program) are exempted from paying into Social Security because they pay into the state system instead, but the state (and local governments who participate) help subsidize the pension fund.  What if public employees were required to pay more towards their own retirement – would that be a tax increase just like a hike in the required Social Security paycheck deductions would be?  Should conservative then oppose such a thing?

What if we avoid using the word “tax”?  If we don’t raise property taxes, but instead impose an additional “quarterly value assessment fee” on all real property otherwise subject to tax, have we successfully avoided “increasing taxes”?

Most of these examples are ways the government can force money out of our pockets and therefore out of the productive private economy.  In this, they have similar economic impact to an out-and-out property tax increase.  A serious policy maker would consider the pros and cons of all these different “takings,” as compared to one another, and as they combine with one another.  But the tax pledge implicitly suggests to its signers that it’s OK to ignore the rest of these policies and still be a “fiscal conservative,” and that’s why the lack of definition here is so problematic.

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“Increase” is also not defined.  Does “increase” mean an increase in rates, or in actual revenue?  If smart economic policy turns the state economy around and revenues to the general fund increase, have those policies functionally “increased taxes”?  After all, if revenues increase, that means we’re Feeding The Beast as opposed to Starving the Beast, yes?

And what about sunset extensions as “increase”?  I appreciate the argument that says if a tax is supposed to expire at 11:59 PM on June 30^th, then it’s an “increase” if it goes back up at 12:00 AM on July 1^st.  But what if we did a zero-based budget every single legislative session, which conservatives have been arguing for for years?  By the same logic of “sunsets are ‘increases’,” then every single budget would be a massive tax increase from zero, even if the overall rates went down from biennium to biennium.  There are good arguments from conservatives both for and against extending the taxes which are set to expire in 2013, but the pledge forces the argument away from policy and towards empty political semantics.

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And finally, we must consider the term “any”.  Say you get rid of all sorts of exemptions and deductions that favor one business type over another, but lower overall rates.  On the businesses which formerly have gotten sweetheart deals, taxes without question have been raised.  Should conservatives therefore insist that existing crony “capitalism” therefore be maintained in perpetuity?

“Any” should be the least ambiguous word in the pledge, but apparently it’s not.  Tax pledge defenders claim that there’s a super-secret clause in the pledge which is OK with certain tax increases as long as they’re “revenue neutral”.  That may be a good way of looking at tax policy, but it’s definitely not what’s being pledged to – “any” means, well, “any.”  (And should there be doubt, there’s the whole “and all” addendum!)  A rise in just one person’s tax rates is part of “any.”  If that word can be redefined to mean the opposite of what it actually means, well, the whole point of a written pledge is pretty much lost.

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All of this ambiguity might be a bug in terms of crafting sound policy, but it’s a feature in terms of politics.  It means that politicians can – and do! – get away with all sorts of dumb economic policy and budget shenanigans and still claim to have upheld their pledge.  Talk about form over substance!

I understand the desire of conservatives to take a strong stand against throwing ever more money at ever more bloated and dysfunctional government institutions.  I wholeheartedly agree with taking that stand.

But the tax pledge as currently constituted is not the way to do it.  Ironically, it provides cover for bad behavior, while relieving elected officials of the unquestionably tedious green-eyeshade comprehensive budget work that is necessary to truly protect our economic liberty.

Note:  This post is part of an ongoing series exploring whether or not the Taxpayer Protection Pledge is truly “Conservative”.