Time to fix the stigma of tax policy for everyone's benefit - We're Left, They're Wrong

There is an irrational stigma that is tearing at the very fabric of this nation. Although the costs of this stigma are greater in some places than others, it threatens to rear its ugly head everywhere. I'm talking about the stigma that surrounds tax policy.

As I have previously written, states pay for an oversized portion of their budgets with revenue from sales taxes. Aside from disproportionately soaking the poor, revenues from sales tax fluctuate to a much greater extent than do revenues from other sources, such as income taxes. During the boom years of the late 1990s, sales tax revenues surged, allowing states to cut other taxes while they improved services. Now that the economy has cooled down, states are beginning to have to pay for their fiscal excesses.

Since any budget is a two-sided equation, either cutting spending or raising taxes can plug the gap. Since many current governors replaced predecessors who were booted out for raising taxes, raising taxes is out of the question across much of the country, since it is simply politically unfeasible to say that taxes were cut too far or the wrong taxes were cut. Gov. Don Sundquist of Tenn. learned this when a brick sailed through his window in protest of a proposed income tax.

That leaves governors and legislators, mindful of the effect of higher taxes on their polls (and their windows) with the option of cutting state spending, which they have been in the process of doing. The only problem is that bureaucrats have feelings, too.

Far from being automatons at the beck and call of the elected officials that brought them into power, state agencies and departments operate with a surprising degree of independence, which means that they can fight back if their section of the budget is not to their liking. Perhaps the most common way this is done is by proclaiming that the budget is insufficient for performing a certain, very public, task.

In Wisconsin, the state university system was so outraged at the spending cuts that the governor proposed that they announced a halt in new enrollment. Imagine what would happen if your top choice college (or even the only college you applied to) decided that although you met their standards for admission, you could not attend in the fall because the state government could not fully fund the university system. Thousands of students (as well as their parents) would be enraged, absolutely livid, at a state that could finance tax breaks to attract new business, but could not finance one of the most important determinants of economic growth: a well-educated workforce. Needless to say, the standoff did not last long and the University of Wisconsin agreed to admit the class of 2006 in exchange for more modest cuts. If those were the tactics used in normally level-headed and progressive Wisconsin, imagine the extremes to which a cash-strapped and retrograde Alabama can go.

They suspended all jury trials in order to save money. You are not imagining things. This is not a typo. The State of Alabama, not Uzbekistan, is halting jury trials in order to save money. This means that people currently awaiting trial in jail because they can't afford bail will just have to wait for a statehouse compromise if they want to exercise their constitutional right to a trial by a jury of their peers. Guilty people who can afford to pay bail get an extension on their freedom, courtesy of a government that lacks the political will to find a revenue source adequate to provide a steady stream of revenue. Still, if Alabamans believe in anything, they believe that the guilty should be punished. The first reported case of a violent crime committed by someone awaiting a jury trial will get the ball rolling on some sort of compromise, although this sort of budgetary brinksmanship shouldn't have gone that far.

The United States is short on one resource that threatens to destroy everything we've built over the years. That resource isn't oil - it's political courage. It's the courage to bite the bullet and improve the way states get their revenue, switching from sales taxes to income taxes in order to increase stability. Some things are worth more than reelection. Jury trials, for example.