This November, Iowa voters will be asked to decide whether it should be harder for the state legislature to increase income taxes. Amendment 1, which is a good taxpayer protection, would require a two-thirds vote of the legislature to increase income taxes. Whether it is the state legislature, a city council, or Congress, raising taxes should be difficult. Taxes are driven by government spending, and too often it is the “silent majority” of taxpayers who are left paying the tab.
Politicians at every level of government find it easy to spend because it often delivers rewards. Special interests are also more vocal and powerful than taxpayers. “A new program produces identifiable beneficiaries. The recipient receives a check, subsidized service, a tax credit, a protected job, or a guaranteed price. Politicians can point to the benefit and claim credit for their next election. The cost, however, is spread among millions of taxpayers, making organized resistance difficult,” argues Paul Meany of the Cato Institute.
Meany, in drawing from William Graham Sumner’s “The Forgotten Man,” writes that it is the taxpayer who tends to be “politically underrepresented, rarely organizing protests, hiring lobbyists, or asking for government assistance.” Ordinary taxpayers are often left to finance policies they had little role in shaping and from which they may receive little direct benefit. Those who quietly work, contribute, and ask relatively little of government can therefore end up carrying a disproportionate share of its burdens.
That dynamic helps explain why government spending can continue to grow at every level, even as taxpayers become increasingly concerned about the costs they are asked to bear. Sometimes the scale of potential government spending becomes clearest on the campaign trail. Right now, candidates across the country are proposing agendas that would significantly expand government’s financial responsibilities, including greater public funding for health care, housing, higher education, and electricity. Other proposals include government-guaranteed employment, expanded retirement benefits, universal paid family leave, and a transition away from fossil fuels.
Taken individually, each proposal can be debated on its merits. Taken together, however, they illustrate how quickly the list of government responsibilities, and the taxpayer obligations required to finance them, can grow.
That brings the discussion back to our state and Amendment 1. A campaign promise from New York or a strong taxpayer amendment here in Iowa both point to the same principle: government spending ultimately has to be paid for by taxpayers. Whether the money comes from taxes today, borrowing that must be repaid tomorrow, or other means that diminish taxpayers’ purchasing power, there is no such thing as government spending without a cost to someone. Amendment 1 recognizes that reality by making it more difficult for state government to turn to higher income taxes when spending pressures mount.
Iowa taxpayers already understand that government, at all levels, must provide certain core services. However, they also recognize that government must not have an unlimited claim on the income of taxpayers. Similarily, policymakers need to remember that the revenue they spend does not belong to them, and it is the taxpayers who create and earn the revenue that funds government. Amendment 1 helps ensure that taxpayers are not forgotten when spending pressures mount. Before state government can demand more from their income, a broad consensus of elected officials should be required.
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