Nine Reasons You Should Hate Tax Referendums

July 8, 2014

Inside Insight

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When I speak out against tax referendums, I’m sometimes met with surprised remarks like “How can you be against ‘letting the people decide’ to raise taxes?”

Such responses fail to see the fallacies and hypocrisies behind the arguments for tax referendums.

1. Referendums are not popular issues.

By “popular,” I mean initiated by and led by the citizenry. Every tax referendum campaign I have ever seen was not initiated or led by the citizenry, but by a few government officials or their friends (“stakeholders”) who stand to gain something from the tax increase.

After these stakeholders get their issue on the ballot, they do not sit idly by and wait for your decision. No, in the months leading up to the election they will mount a well-funded, well-executed PR campaign to convince you to vote their way on the issue – to raise taxes.

2. You probably won’t have all the facts.

At the risk of sounding condescending, elected officials are the only ones privy to all the facts. They have made it that way. For all the talk of government transparency, in practice all of the relevant information won’t be available to the public. And even if the information is given to the public, it often comes in a form that the average literate person finds totally indecipherable.

As a member of the public, you will be selectively fed the facts the stakeholders want you to know, and no more. How can you really make an informed decision, or confirm the validity of their claims? Motivated citizen activists can go digging, but for most, this will be difficult to do.

More on this in a minute.

3. It’s not the public’s responsibility to make these decisions.

Why should you bear the burden to do the research and thinking required to make important policy decisions? Isn’t that what elected representatives are supposed to do? After all, you are busy, you work hard, you have a life – you likely don’t have time to do deep research on complicated policy decisions.

It’s even worse if a representative promises to oppose tax increases, only to punt the decision to your ballot.

4. Referendums spare politicians from the future consequences of making a decision.

Political pain comes in many forms: bad press, public embarrassment, angry voters, and worse. Politicians avoid pain by doing as little as possible.

If bad policy is enacted by public referendum, and it is known to be bad policy by its aftereffects, then the politicians and stakeholders responsible for the referendum and who campaigned for it will shift the blame to the citizens who voted for it.

They will not remind you of the part they played. Nor will they remind you that had they not placed the matter on the ballot in the first place the decision would not have been made.

5. It sets a precedent contradicting our form of government.

It is rather arbitrary to single out tax issues to be decided by referendum. Is a tax increase more important than, say, the entire budget? What other “important” policy decisions will we choose to make by public referendum? Will our representatives eventually be absolved of making any decisions?

America has a representative republic form of government. It is not a literal democracy.

But isn’t democracy a good thing? In a representative republic, your elected representatives make these decisions. In a democracy, the majority of the citizens make these decisions. This form of government is inherently unstable, as our founders understood.

6. Referendums lead to unequal representation.

In a representative republic, as long as your representatives show up for work (they usually do), you will be represented in the legislative chambers.

It’s well known to political operatives that elections are decided by a very small fraction of the citizenry. Not everyone is eligible to register (too young), not everyone is registered, and of those who are, few bother to show up to vote on election day, with turnout typically varying from 10%-30%. The final percentage of people casting a ballot versus the overall population can be in the low single digits.

Given historic voter turnout, how can proponents referendums claim to advocate for “democracy” when in fact referendums result in less overall representation? If a decision is made by 25 percent of the registered voters, how is that “more democratic” than a decision made by 100 percent of the registered voters’ elected representatives?

7. It violates the oath of office.

“Shouldn’t I have the right to decide for myself if I want to raise my taxes?”

Because America is not a pure democracy, this question actually asks: Shouldn’t I have the right to usurp our form of government at will?

The answer is no. The citizens of the American republic ratified their federal and state constitutions, and by doing so delegated certain powers (U.S. Constitution, Article I, Section 1 and S.C. Constitution, Article III, Section 1) to representatives whom they elect. If you want to take that decision-making power back, then you must go through the process of amending and ratifying amendments to those constitutions. Until then, it’s not your right to cast a deciding vote in any arbitrary legislative decision!

Politicians who claim otherwise are undermining the very constitution they swore to protect: “I do solemnly swear (or affirm) that I am duly qualified, according to the Constitution of this State, to exercise the duties of the office to which I have been elected, (or appointed), and that I will, to the best of my ability, discharge the duties thereof, and preserve, protect, and defend the Constitution of this State and of the United States. So help me God.” —

8. Tax referendums are based on a lie.

Here’s the lie: that this tax increase will fund its stated purpose. To understand the lie, we first need to understand what the word fungible means: “Able to replace or be replaced by another identical item; mutually interchangeable.”

Why can I state that this is a lie with such confidence? Because of a secret they don’t want you to know: ALL funds are fungible.

Let’s say your daughter has a weekly allowance of $50, which she uses to put gas in her car. But instead of putting gas in her car, she spends $40 on a new pair of shoes, and has $10 left to put gas in her car. So she comes to you to ask for a $40 increase in her allowance, because $50 per week just isn’t enough to go all the places she needs to go and she needs more money for gas in her car.

You give her the additional $40, raising her weekly allowance to $90. Your daughter now has money for a new pair of shoes each week, since she can continue diverting $40 of allowance money to buy shoes.

Where is the extra $40 per week you gave her “for gas” going? Was it used to pay for gas, or to pay for the shoes? The answer is yes to both, since all funds are fungible – it went to either one, depending on how you choose to look at it.

These kinds of budgetary tricks happen all. the. time. in government.

This is where point No. 3 comes into play. Citizens normally do not know what games are being played behind the scenes with their money. Giving more money will enable politicians to keep playing their games, and is not likely to accomplish whatever legitimate purpose they claim the added revenue will achieve.

In other words, they waste your money, and when you give them more, they waste it, too.

9. Referendum advocates ignore situations where referendums are really needed.

When would a referendum be needed? When a decision is to be made that directly affects or benefits those casting the decision, i.e. a direct conflict of interest.

For instance, consider the matter of legislative pay raises. There’s a case to be made (although it’s one I strongly disagree with) that we should pay legislators more than we do in South Carolina. Obviously, though, there’s a conflict. This one should be decided by a public referendum. Strangely, though, lawmakers themselves aren’t clamoring for one.

Another instance is amending the state constitution. Unlike the U.S. Constitution, any amendment to the S.C. Constitution must originate with the state legislature. Since the Constitution is a contract between the people and their government, shouldn’t the people have the right to initiate changes to it? Yet you don’t see any stakeholders pushing for this change.

Maybe referendums aren’t about doing right by the people after all.

I was once given this advice: When a politician tells you something, always ask, “If I believe what he says, how will it benefit him?” Referendums are often framed as issue “for the people” to decide, but in reality they almost always benefit politicians over the people.

Jonathon Hill is a native of Anderson, S.C., and organized the Anderson TEA Party in 2009. He is a computer programmer and website developer.