There’s something very important to note in light of the Maine Senate Republicans’ proposed budget framework, which includes moving towards a constitutional amendment requiring a two-thirds majority for income tax increases, and that’s this: The only increases in income tax rates (or closings of tax loopholes) that have been proposed, whether in the Democrats’ budget proposal or in stand-alone bills, are for those at the very top. No one is even considering income tax increases for the poor or middle class.
In essence then, the central focus of the Senate Republicans’ budget strategy is to do everything they can (up to and including amending the Constitution) to protect the wealthy from ever having to pay their fair share of taxes.
It is, in many ways, a more insidious plan than even the insistence by Governor LePage and House Republican Leader Ken Fredette on passing immediate income tax cuts for the rich.
Here are three big reasons why:
1. It would enact lasting, structural change
If enshrined in the constitution, this proposal would essentially lock in inequality, ensuring that future revenue shortfalls would be more likely to be made up through regressive hikes in sales or property taxes, rather than a progressive increase in taxes on high income earners.
“If Republicans are going to get a permanent guarantee about a policy area that they’re focused on, it would only be fair if Democrats would get a similar long-term guarantee around investments in health care and education,” said Democratic Taxation Committee Chair Adam Goode when I asked him about the plan.
Under the outlines of the plan made public so far, the gains by Democrats would all be short-term and temporary.
2. It would take a potent political issue off the table
One of the issues Republicans fear talking about the most is increasing tax rates and closing tax loopholes on the wealthy. It’s an issue that polls incredibly well and is entirely in the Democratic wheelhouse. If a constitutional amendment passed, instead of having to constantly defend their policies of tax breaks for those who need them the least, the issue would be muted by the requirement of a two-thirds majority for any meaningful change.
3. It would give Republicans an important organizing tool
The proposal as discussed so far would put a constitutional referendum on the ballot in November of this year. While voters have rejected two similar “TABOR” proposals in recent years, this would be narrower, would have a bipartisan sheen from Democrats’ involvement (which would somewhat blunt any opposition), and would be on the ballot during an off-off-year election when the electorate has the potential to be more conservative.
It would give Republicans something to talk about for the next six months (and an excuse for LePage to continue his town hall campaigning). And, just like the tax referendum in 2010, it could help Republicans to build organizing strength ahead of the 2016 ballot, when the entire legislature will be up for election.
It would also potentially make things more difficult for the clean elections referendum, already slated for the ballot this year, by bringing more right-leaning voters to the polls in a low-turnout election.
The state of negotiations
The most heated debate at the moment now isn’t between Democrats and Republicans; it’s between Republicans in the House and Republicans in the Senate (with Governor LePage somewhere on the sidelines, hurling insults and threats).
Democrats have been more than accommodating and collaborative and have put forward a detailed and reasonable reasonable proposal for tax reform. Not all of the burden of good governance should fall on them. They shouldn’t be pressured to give up larger and more permanent concessions simply because the Republicans are so dysfunctional so close to the end of the legislative session.
As Goode puts it, “eliminating one of the most progressive options on tax policy doesn’t seem like the right reward for the Republican caucuses not being able to work together on tax reform.”
He also notes that there could be other unfortunate unintended consequences in this black box of a proposal. Unlike virtually every other potential action the legislature could take on taxes, it has never been vetted by the committee or been made subject to public scrutiny.
“If it’s a good idea, you’d think that it would have been proposed and would have had a hearing and a work session prior to now, the 11th hour.”