March 09, 2005

No Supermajority in North Dakota

In the current political climate, it's hard enough to get lawmakers to talk openly about tax increases. But some state lawmakers in North Dakota are bent on making fiscal responsibility even harder to achieve. Fortunately, legislators have just rejected a proposal to impose a "supermajority" requirement for tax increases. The bill, HRC 3004, would have amended the state constitution to require a 60 percent vote of each legislative house to enact most tax increases.
How common is this supermajority approach to tax hikes? By one tally, 14 states have some form of supermajority or other form of legislative restraint on raising revenues.

Proponents of the supermajority rule argue that it requires lawmakers to reach a broader consensus when attempting to raise taxes. That's certainly true. But lawmakers ought to be able to make fiscal policy decisions on a level playing field: tax hikes should be no harder (and no easier) to enact than tax cuts.
And supermajority rules sometimes distort fiscal policymaking in ways that are less obvious. Take the case of Arkansas, where a 1929 constitutional amendment imposed a supermajority on all taxes in existence at the time. It turns out that the amendment's language does not apply to any tax (for example, the general sales tax) that was enacted after 1929. As a result, it's much easier for lawmakers to enact sales tax hikes than to enact income tax hikes-- and Arkansas legislators have responded to this incentive time and again in recent years.
The rules of the game should be used to make sure the game is played in an orderly way-- not to determine the game's outcome. But supermajority rules make it much harder for lawmakers to evaluate tax policy changes on their merits.

I'm not sure how compelling this argument is, though. Both federal and state legislatures have procedures in place to give legislative minorities disproportionate power, as the current tug-of-war over Senate filibuster rules reminds us. I don't yet have a well-thought-out explanation of what makes the filibuster OK and the tax increase supermajority not OK. But putting all fiscal policy decisions, including tax hikes and tax cuts, on the same playing field would make me a lot more inclined to accept supermajority rules.


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