Especially given the presence of Amendment 1 on the previous statewide ballot, the presence of the upcoming Amendment 1 on the next statewide ballot raises interesting principled questions about how specific should taxes, taxing powers, and spending discretion be rendered in the state’s constitution, with the answers providing a guide to the approaching vote.
This Amendment 1 would prevent a local governing authority from imposing a tax on real estate transfers, grandfathering in the Orleans Parish version as it will be in place prior to Nov. 30. 2011 (and apparently giving Livingston Parish the opportunity to do so under state law if it acts prior to that date). Most states permit them, but Louisiana’s constitution currently makes no mention of them.
It also stands philosophically the opposite from the previous Amendment 1, which wrote into the Constitution a tax of 1/20th a cigarette sold with an affirmative popular vote last month.
That unwise action created yet another constitutional dedication that hampers the ability of state policy-makers to budget according to need and priority.
But some opponents of the current amendment make a related argument concerning the undesirability of it. They argue that local governments should have that flexibility, to capture revenues from this kind of private transaction, for budget purposes, negating the utility of implementation of this amendment.
However, the analogy falls short because in the prior instance opposing the amendment created more flexibility in preventing government from dedicating proceeds from a revived tax to a purpose (those covered by the Health Excellence Fund), while in the current instance opposing creates more flexibility by allowing government to initiate a tax, where the existence of the tax is optional and any dedication is likewise. The larger principle here is that, by opposing the measure, government is permitted more latitude to take ownership of people’s resources in the latter case, while in the former opposition would have prevented this by refusing to allow the tax continued existence.
Flexibility in budgeting is desirable, but not at the expense of empowering government. Put too few restrictions on its ability to find ways to separate from them money earned by citizens and its natural tendency is to increase its consumption of it, given the agency problem inherent in government that highlights the asymmetrical power relations between the governed and government – the ability of government to extract small amounts from the many governed meeting pressures from the few to use the aggregate collected to favor their special interests.
Thus, not all flexibilities in budgeting merit the same treatment. Those that increase the volume to spend must rank below those that increase discretion on where to spend, where the former must undergo a far higher level of scrutiny for their adoption. The Constitution limits in numerous ways the kinds of taxes, their sizes, and how they may be increased. The amendment for consideration reasonably adheres to what presently exists constitutionally. To oppose it out of wanting increased flexibility for local government revenue collection misplaces faith in government and misunderstands that it does not equate philosophically to flexibility in spending decisions, where the reduced value of it comes from its threat to maintaining individual freedom.
Posted by Jeff Sadow at 07:00