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RUSS LATINO — What is conservative about raising taxes?

RUSS LATINO

RUSS LATINO

Americans for Prosperity’s (AFP) driving point in the gas tax debate is simple: prior to raising taxes, the state should make a real effort to find savings within the Mississippi Department of Transportation’s existing $1.2 billion budget and our state budget, as a whole.

In his latest column, Bill Crawford argues that instead of opposing a gas tax increase, AFP should support “conservative” tax increases:

“What Americans for Prosperity should be about is promoting conservative tax plans for essential government services like road and bridge repairs.  User taxes have long been the conservative way to fund government services.  You use it, you use it up, you pay for repairs and new ones.  It costs more, you pay more…It’s time for users to pay more.”

Setting aside the question of whether a “conservative” tax increase is an oxymoron, there is some common ground to be had.  Few would argue that roads and bridges are not a legitimate function of government. Mr. Crawford is also right that consumption taxes are generally viewed as the more conservative approach to taxation.

Identifying these general truisms, however, does not end the analysis of whether we should increase taxes for infrastructure.  One can recognize that the state should provide safe roads and bridges and simultaneously oppose a tax increase. Likewise, a person can recognize that consumption taxes are a more conservative form of taxation and simultaneously oppose a rate increase.

There are two questions that should be answered prior to considering any tax increase: (1) can we fund the core functions of government on our existing budget? (2) if not, why?  Without study to answer those questions, asking taxpayers to bear a heavier burden is unfair.

In the last decade, Mississippi’s tax collections, spending and debt have all increased at a rate that far exceeds inflation plus population growth. The only thing that has not kept up with inflation are median household incomes.  So while it may cost more to build roads now, it also cost more to buy milk and pay rent.

At first blush, Mr. Crawford’s proposal to only increase taxes when gas prices are low, and to reduce taxes if prices increase, may be appealing.  It is, however, not sound policy.  Conservatives have longed believed that people spending their own money in the private sector is what drives economic growth.  Raising taxes when people have more disposable income takes money away from the people who earned it and out of the private sector.

Beyond that, it is a unrealistic proposal.  If we raise taxes now and drive up the revenue available to MDOT, it will become accustomed to operating off of that revenue.  When gas prices go up, MDOT will still be reliant on those revenues.  Screams of “crisis” will echo through the Capitol and taxes will not go down.  Coincidentally, the price of gas over the last month has gone up 27 cents per gallon.

Mr. Crawford closes by admonishing AFP for working to “kill” a shell bill passed out of the Senate.  This bill includes a multitude of tax codes—including provisions related to the gas tax—that could be used to increase or decrease taxes.

Our concern over that legislation arises in the unknown, particularly when coupled with the very public demands of MEC for $375 million in new revenue.  We are not working in the House to “kill” that legislation, so much as we are working generally to ensure there are no tax increases this year.  Not so very long ago, that would have been considered “conservative.”

» Russ Latino is the State Director of Americans for Prosperity and an AV-rated attorney.  He can be reached at rlatino@afphq.org.

 

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One comment

  1. Continual tax reductions with no plan to increase revenue needs or contend with woefully ignored infrastructure is NOT conservative. It’s making policy to match political slogans found on bump stickers. Business growth in MS has never been hampered by high taxes in my lifetime. The other items which do matter we seem determined to avoid at all costs. The rate of job & economic growth over the last decade doesn’t speak well for what leadership calls “conservative”.

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