Taxes aren't a fatal issue

STEVEN D. GOLD

November 13, 1991|By Steven D. Gold

After last week's election results, the pundits said that taxes are politically lethal. They mentioned New Jersey, and left it at that. This reflects a limited understanding of the role the tax issue played in the vote. It was not anathema; nor was opposition to tax increases a guarantee of election.

Yes, the sweeping victory for New Jersey Republicans is a reaction against the large tax increases Gov. Jim Fiorio pushed through last year. There is no denying their unpopularity. But they might have been more acceptable had they not been so sizable -- $2.8 billion, for a 25 percent rise in state revenue -- or if they had been handled differently. The tax bill was whipped through the legislature in less than three weeks. The public was not educated about the reasons for the increase -- a $1.3 billion deficit, a court decision requiring New Jersey to spend more to help poor school districts and a major program to provide property tax relief.

Kentucky had the second biggest increase in 1990, raising sales and income taxes substantially to support education. (Tax revenue went up 14 percent.) But last week voters there elected Lt. Gov. Brereton Jones as governor, a Democrat who was part of the administration that proposed the tax increases. And in the earlier primaries, which are key to the vote for the legislature because the Democrats hold huge majorities, more incumbents who had voted against new taxes were defeated than those who had voted for them.

Even Republican victories over Democratic incumbents were not signs of an anti-tax backlash. Mississippi and Virginia had recently spurned tax increases. But in Mississippi, the Republican Kirk Fordice upset the incumbent Democratic governor, Ray Mabus, and in Virginia, the GOP gained eight state Senate seats. Mississippi probably should have raised taxes, but Mabus placed his priorities elsewhere. And Gov. Douglas Wilder of Virginia has made it clear that increases are off limits. If either state had raised taxes recently, pundits now might be blaming them for the election results.

Pennsylvania, on the other hand, did raise taxes a lot this year, and Dick Thornburgh, the Republican who was a net tax cutter during his two terms as governor, used that leap as an argument against Sen. Harris Wofford, a Democrat who had earlier served as state secretary of labor and industry. That accusation apparently had little if any effect.

Taxes are not the overwhelming factor because voters are smart enough to understand that taxes are the price that has to be paid for services. Raising taxes is not taboo. If handled skillfully -- convincing voters that alternatives to increases are undesirable -- the negative impact is relatively minor. Likewise, avoiding taxes is no guarantee of re-election.

Steven D. Gold is director of the Center for the Study of the States at the Rockefeller Institute of the State University of New York.

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