Tax Hike Support? Depends What You Ask

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

Chatter in the capitol has it that pro-tax advocates think their time is now to strike for more tax increases. Fresh off success in the November election, the pro-tax faction think voters are ready to support their cause as long as the tax is framed correctly – that is, putting the tax on someone else or calling out one faction or another to pay their “fair share.”

Claiming that the rich didn’t pay their “fair share” of income taxes – even though the targeted top 1% of taxpayers pays well over 40% of the state’s income taxes — was a successful battle cry in the recent election. Painting corporations as not paying their “fair share” is now being discussed by groups that want more tax increases.

Targeting small groups of taxpayers is also part of the formula. While voters defeated a cigarette tax last June, at least three groups or individuals are contemplating pushing a new cigarette tax for the next election.

Other taxes being kicked around in the Sacramento rumor mill are an oil severance tax and a split roll property tax on businesses.

The new Public Policy Institute of California poll released yesterday might give heart to the tax increase fans by surfing the surface of the poll. The poll says that about 70% of likely voters support increasing cigarette taxes. While no direct question was asked about property taxes on business, raising state taxes paid by California corporations garnered 52% of likely voters.

But here’s the thing – there were no opposition arguments offered to the poll respondents. The question stated simply: “New revenue sources have been proposed to address the state budget situation.” Then the pollsters asked about raising three different kinds of taxes and asked for a Yes or No response. The third tax, one on services, basically a new tax on everyone not just one group of taxpayers, got only 32% support. (There is an issue often associated with extending sales taxes to services—reducing the overall tax rate. That was not explored in the poll.)

Without discussing the consequence of any tax increase, such as a tax on corporations, which likely would lead to jobs lost, there is no telling where the voters really are.

The 70% support for a cigarette tax is not unusual in PPIC polls. Asked about support for a cigarette tax over the last decade, the number hovered around the 70% mark, often higher, hitting 77% in May 2004. It should be noted that the PPIC poll found 63% support for a cigarette tax three months before the vote last June on cigarette tax raising Proposition 29. The measure failed.

Another curious point in the poll was a question about the spending limit. Poll respondents liked the idea at a strong 68%. So, it seems these voters wanted a check on spending while at the same time supporting new taxes. A better test of voter sentiment would include arguments against the proposals.

This poll may encourage pro-tax advocates to move ahead with their plans. Frankly, even if the numbers were lower they still would march ahead. They think it’s their time.

But the governor said no tax increases without a vote of the people and the people don’t get to vote until 2014, a distant time, politically. Unless there is a special election … another rumor that one hears on the streets of Sacramento.

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