Huston: Automatic Tax Increases
So far, no big deal, but unlike my friends at Indiana Policy Review, I also supported raising the revenue to pay for these improvements through rational and measured tax increases. I can nitpick the mix and relative balance of the various “revenue raisers” the governor and the legislature decided on, but overall I think they made a good faith effort to get the most benefit for the dollar.
That said, there is one aspect of the measure to which I do wish to take exception: Tying the gasoline tax rate to inflation thus freeing the legislature from any future necessity to again address whether the tax is fixed at the appropriate rate relative to other revenue priorities.
There are two obvious problems with tying tax rates to inflation: 1) The increase falls hardest on those least able to afford it, those on fixed incomes and those whose income has not kept pace with inflation; and 2) it unreasonably relieves the legislature from facing the ongoing question whether this tax and its revenues bear the proper relationship to other public priorities.
Now, I recognize that the legislature can always intervene to offset the negative impact of inflation adjusted rates, but how likely are they to do so and, more importantly, isn’t it more responsible to intervene periodically to raise them if necessary in broad daylight and with accountability to constituents?
The highway bill sets a bad precedent for automatic tax hikes, and Hoosiers ought to object to such acts of legislative abdication.