The Outstater
Statehouse Eyes Turn to Taxes
“Read my lips.” — George H.W. Bush, 1988 GOP Convention
HEARING HINTS from the Statehouse floor about details of a property tax “cut,” we are reminded of the “Bohanan Rule” named after the Ball State University economist Cecil Bohanon who first explained it to us. It says that taxes can be cut for no better reason than to keep government small enough to remain comprehensible.
For the last 80 years or so we have steadily raised taxes on the assumption that if government gets bigger it will do more good. There may have been a point early on when that was true. We have long passed it, though, and government has gotten so big that it regularly intrudes on our lives in ways that are both unannounced and arbitrary if not evil. (I’ll wait while you make your list.)
And it is immaterial In applying the rule whether our administrators honestly decide they need more money or even think they can put it to proper use, say, in pursuit of some inarguable good or another (schools, healthcare, economic development). What matters is whether government has grown so large that normal people — economists, journalists, plumbers — can’t easily and factually assess those decisions.
We can insist on that veto power because — and this is a tangential point — because it is our money, a position won with the blood and treasure of our forefathers.
Anyway, here is an example of the rule. If the pothole in front of your house has gone unfixed for a couple of seasons, you can conclude that either the street department is underfunded or is incompetent. But if your city decides in a moment of grandiose boosterism, but without private independent market research, to transform the downtown into “a destination spot” with a multi-million dollar entertainment complex, sports stadiums and convention center, all to be financed over the next 20 years using government grants, municipal bonding, TIF districts, inscrutable financial arrangements, some with undetermined campaign contributors and silent partners, all of which is likely to restrict prospects for your children and grandchildren . . . then that is something else entirely. You might want to scale things back a bit.
The journalist Gideon John Tucker famously wrote it down in 1866: “No man’s life, liberty or property are safe while the legislature is in session.” Heeding that warning, our businessman-governor has been stalwart (so far) in saying that a tax “cut” should actually leave more money in a taxpayer’s pocket. But the Speaker of the House has been more qualifying, perhaps misspeaking but perhaps letting the cat out of the bag.
He says homeowners should see a reduction in what people would have been paying in taxes. He also says it will go to those who need it most, a sliding determination based on the most political of calculations.
The cynic might hear that to mean legislators will merely and begrudgingly be reducing the size of the intended larceny. Let us just say that the Legislature, which has grown haughty in supermajority, seems oblivious to a historical political lesson. It risks raising the most damaging tax of all, the one on the citizenry’s trust.
Prospective primary candidates will want to stay tuned this next week. — tcl
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