Voters to Congress: Raise Our Taxes
Republicans shouldn't be so afraid to raise taxes.
As voters across the country showed this week, most Americans are willing to accept higher taxes as long as the money is used for something with tangible benefits.
In states like California and Arkansas and cities like San Antonio and Austin, voters agreed to raise their own taxes when they approved local ballot measures that will help cash-strapped states and cities pay for education, highways and other public infrastructure.
Years of brutal budget cuts have shown voters that the services they've come to expect and depend on aren't free or guaranteed. Ensuring that children have access to quality education, that bridges don't crumble and that safety nets are available during tough times requires more revenue than what's currently available, and voters know this.
That's one reason why six out of 10 voters polled on Election Day said taxes should be increased, with nearly half saying they should go up on the wealthiest, according to exit polls. Just 35 percent said they shouldn't be raised at all -- which may be the most telling reason why Mitt Romney (whose campaign centered on across-the-board tax cuts) was unsuccessful.
Back in Washington, Republican lawmakers continue to tie themselves in knots over whether to allow taxes to rise. House Speaker John Boehner showed some signs of compromise on Wednesday, saying Republicans would accept new revenues "under the right conditions." Translation: Additional revenue will have to come from tax reform, including limiting tax deductions, and entitlement reform -- not from higher tax rates.
Boehner and House Majority Leader Eric Cantor both said the Republicans' continued control of the House shows "there is no mandate for raising tax rates."
Yet in California, voters approved Proposition 30, a measure that will increase income taxes for those earning $250,000 or more and raise the state's sales tax to 7.5 percent from 7.25 percent for four years. The estimated $6 billion it raises will prevent a similar level of cuts -- primarily to education -- that Governor Jerry Brown says the state would otherwise have to make. Arkansas voters approved a half-cent sales tax increase to finance a $1.3 billion four-lane highway system. Voters in Austin approved a property tax increase to fund a medical school and in San Antonio, the local sales tax will go up by one-eighth of a cent to help raise $31 million a year for a full-day pre-kindergarten program for 4-year-olds.
Of course, voters are not monolithic and tax increases in states like South Dakota, Arizona and Missouri (all of which voted in Romney's favor) failed. Arizona and Oklahoma also voted to limit property-tax increases. Yet enough rises went through to make it clear this is not a nation united against taxes. Indeed, Oregon rejected a phaseout of the estate tax and Florida turned down a property-tax cap.
There's a lesson here for Congress as it enters into bruising negotiations over tax and spending policy necessitated by the fiscal cliff: Americans will probably accept an increase in taxes if it's framed not as a way to simply pay for profligate spending of the past but as a way to invest in the nation's prosperity and growth.
Voters know the services they've come to depend on cost money. The U.S. government can certainly be smarter about how it spends taxpayer funds, and it should eliminate duplicative and poor-performing programs and agencies and cut down on other wasteful spending. But cuts can't accomplish everything -- especially not if the nation wants to invest in areas that will be essential to its ability to compete in a global economy. It will take more than tax and entitlement reform. It will require higher tax rates, particularly on those who can afford to pay a little more.
Voters are OK with this. Congress should be too.
Read more breaking commentary from Bloomberg View columnists and editors at the Ticker.