Political death and taxes

While teachers and police officers face the loss of their jobs, an alternative exists in various states - tax hikes, especially on the wealthy and business interests.

A number of governors refuse to even entertain the idea or they have reduced business taxes. Some governors, though, have taken steps to raise taxes. Among them, California Gov. Jerry Brown is going about it ever so gingerly.

Republican governors surprise nobody with their aversion to taxes, but New Yorkers have reason to wonder why their new governor, Andrew Cuomo, opposes the extension of the personal income tax surcharge for those who make more than $200,000 each year. The tax, which generates up to $5 billion in revenues, expires at the end of the year.

After all, Cuomo is a liberal Democrat who, like his father, Mario Cuomo, has long been concerned about vulnerable citizens.

The tax alternative demonstrates how political figures are too afraid to place some issues on the table, discuss the pros and cons in a sensible manner and permit their constituents to offer their feedback.

Critics of taxation have presented their positions in such an intimidating manner that many politicians are afraid to challenge them. Why should they be?

Connecticut Gov. Daniel Malloy is challenging this mindset. He is taking some delicate steps that are sure to be unpopular, but he is acting in a balanced manner. Yes, he has proposed cutting services, but he has also urged raising selected taxes.

He is treating Connecticut’s 3.5 million citizens like grown-ups. They can figure out that no easy way is available, and they should recognize that Malloy is attempting to be fair and evenhanded.

Malloy wants to close his state’s $3.2 billion gap in its $19.7 billion budget by partly reducing $1 billion on state employees and $758 million in state services, according a New York Times editorial.

However, the editorial states: “He is proposing an increase in the personal income tax to 5.5 percent from 5 percent for residents making more than $50,000 a year and to 6.7 percent from 6.5 percent for individuals making more than $500,000 a year.”

The Times put it best in endorsing Malloy’s course of action: “Unlike his neighbors, he recognizes that budgets cannot be balanced fairly in the short term, or at all in the long term, without having new money coming in.”

To partially fill a deficit of up to $15 billion, Illinois’s legislature narrowly voted on Jan. 12, 2011, to raise the personal income tax rate to 5 pecent, from 3 percent, for four years, The Washington Post reported. Corporate income taxes will also increase.

“It’s important for their state government not to be a fiscal basket case,” Gov. Pat Quinn, a Democrat, said to reporters. His office added that the higher taxes are expected to generate $6.5 billion each year. Democrats voted for the tax increases and no Republicans voted for them.

GOP Rep. Roger Eddy said, “We’re saying to the people of Illinois, ’For eight years we’ve overspent, now we’re going to make it your problem.’ We’re making up for our mistakes on your back.”

Brown of California is carefully preparing to seek voter approval for $12 billion in surcharges of sales, personal and vehicle registration taxes to reduce nearly half the state’s $26.6 deficit, according to the New York Times. His first obstacle is to convince two-thirds of the legislature to set a special election on taxes in June 2011, and then persuade voters to approve it. Taxes have historically been a charged issue there.

He is coordinating the campaign with labor groups which have polled citizens and run focus groups that signaled considerable but not intractable opposition to tax hikes. Brown’s aides have studied past strategy for a successful tax referendum and believe it is crucial for the tax question to be seen as having bipartisan backing, the Times reported.

In addition, Democrats intend to tie the surcharges to education and public safety and make the case that this election will balance the budget once for all.

State Sen. President Pro Tem Darrell Steinberg, a Democrat, told a Times reporter, “Most of the surveys we review say essentially the same thing: If the people believe that this is a fair solution and that it actually has the real possibility of putting the fiscal crisis behind us, that they will support it. People want us to get on with it.”

Republican governors do not see it this way, of course. Chris Christie in New Jersey has at his disposal the chance to impose an increase to the state’s cheap gas tax and revive a tax for millionaires. Scott Walker of Wisconsin created a $137 million deficit by reducing business taxes. Pennsylvania’s Tom Corbett refuses to endorse a tax on natural gas drilling, a widespread practice in northern Pennsylvania.

Cuomo’s stand on taxes is maddening, but we can speculate. This was a campaign promise and certainly he fears being attacked if he breaks a campaign promise.

Perhaps he made this promise to avoid handing his opponent an issue that he would need to defend. Yes, a profile in courage.

Now that he is governor, Cuomo must work with a split legislature - an Assembly controlled by Democrats and a Senate run by Republicans. Senate leaders would surely balk at any hint of a tax extension on the rich or an increase. Cuomo has enough difficulty obtaining cooperation from the Senate on most other issues, and he cannot afford another fight.

Final reason: He is a governor. He runs the third largest state in the union. Franklin Delano Roosevelt was once governor of New York. If Barack Obama is elected to a second term, there will be an open vacancy at 1600 Pennsylvania Avenue in 2016. Cuomo is probably ambitious. People in the heartland, including the swing states, are not typically amenable to tax hikes. Need I spell out where this is leading?

It is a disservice to the public that many politicians fear even being open to the prospect of tax increases. Certainly, taxation has been excessive in many areas, but in other instances a tax increase can be a reasonable alternative.

Even President Obama was willing to revive higher tax rates for the rich, but Republicans in the Senate blocked it last December.

As an unwritten law, this pattern of evading tax talk should be wiped clean from the unwritten slate.