Next time your elected officials try to tell you that a tax increase will be temporary, don’t buy it.
In California, Gov. Jerry Brown has made extending that largest state tax increase in U.S. history his top legilsative priority. The higher rates on sales, cars, and income, sold as temporary and signed into law by then Gov. Schwarzenegger in 2009, are scheduled to expire at the end of this month (the higher rate on income actually expired in January). Gov. Brown is pressing lawmakers to put a five year extension on the ballot. With Brown’s budget calling for a 27% increase in spending in just the next three years, don’t think for a second that Brown and legislative Democrats have any designs on letting those tax hikes expire in five years. In fact, California Democrats’ ultimate plan is to do away with the two-thirds majority requirement to raise or refer taxes to the ballot, at which time the tax floodgates will open in the Golden State.
North Carolina Gov. Beverly Perdue, arguably one of the most economically illiterate governors in the nation, imposed a sales tax increase two years ago under the auspices that it would be temporary. Going back on her word, the budget proposed by Perdue this year relies on an extension of that sales tax hike. Reports indicate that in the next day or two she will veto the bipartisan budget recently passed by the legislature because it does not extend her “temporary” sales tax hike.
However, rejection of the notion that there is such a thing as “temporary” taxes is bipartisan, as the Republican controlled Louisiana legislature recently demonstrated by passing HB 591, legislation that would block the scheduled sunset of a “temporary” four cent tobacco tax. Although most proponents of HB 591 refuse to admit it, prevention of the scheduled expiration of a tax is, in fact, a tax increase. Gov. Bobby Jindal, unlike too many members of the legislature, is staying true to his pledge to constituents to oppose and veto any and all efforts to raise taxes and, as such, has promised a veto. Only one “aye’ vote in the House would need to be flipped to sustain Jindal’s pending veto.
It was once said that the sun never set on the British Empire. As lawmakers is state houses across the country are demonstrating, today the same can be said of “temporary” taxes the US.