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Blast From The Past

This is a column I wrote for the late, lamented Nando Times in 1999. I dug it out while working on a book chapter this summer, and it seems to still have some relevance . . .

“Tackling Taxes in Tennessee”

by Prof. Glenn Harlan Reynolds, Univ. of Tennessee, Knoxville,

from, Dec. 1, 1999

No tea was dumped into Nashville’s Cumberland River last month, but the inglorious end to Tennessee’s effort to adopt an income tax was otherwise according to the revolutionary script.

By the time lawmakers surrendered and went home, there were even protesters brandishing tar and feathers in the state Capitol. At a time when figures like Sean Wilentz and Garry Wills are assuring us that the public is fat, prosperous, and ready once more for taxes and big government, last month’s episode in Nashville offers a bracing reality check.

Just a few days earlier, adoption of an income tax had appeared all but certain. Tennessee’s pro-tax Republican governor, Don Sundquist, had used a combination of pork and arm-twisting to bring many legislators over to his side. Though the Tennessee Supreme Court had previously ruled that an income tax would violate the state’s constitution, tax proponents believed that the current elected court, fearing revenge by the powers-that-be, would uphold a tax. Leading opinion-makers, newspaper editorialists, and academics were firmly on board. The Legislature was meeting in special session, and the main question seemed to be what kind of income tax would emerge, not whether there would be an income tax.

All of this evaporated overnight in the fact of overwhelming opposition. Thanks to a combination of talk-radio discussion and an e-mail campaign spearheaded by the state Libertarian Party, the Capitol found itself, almost literally, under siege.

Thousands of cars circled Capitol Hill, bearing down on their horns and tying up traffic throughout downtown. Hundreds of protesters occupied the Legislative Plaza, with many barging into the capitol building itself carrying signs and — in one case — a can of tar and a feather pillow. “Put a stop to this or we’ll get you,” said one protester in the Senate speaker’s office. Phone and e-mail systems were jammed with complaints and threats.

Despite vows to “do the right thing” in spite of popular opinion, the Legislature cracked. One legislator was rushed to a hospital with chest pains; many others complained about the “incivility” of the public response. The Legislature recessed, hoping the protesters would leave. They didn’t. Finally, the special session adjourned, leaving the income tax question to be taken up — if at all — in the regular session next year. Despite vows from income tax proponents, it seems unlikely that income tax proposals will fare any better in an election-year session.

What are the lessons from this debacle? There are several:

1. Character counts: People actually care about politicians’ promises. In the case of Sundquist, that included promises never to impose an income tax — promises he was still making earlier this year. Once you break a promise like that, voters don’t trust further promises — for example, that a switch to the income tax would leave most people paying less.

2. Voters aren’t apathetic: True, Tennesseans have never been known for apathy, or conflict-avoidance. But voter turnout in Tennessee isn’t much better than elsewhere. Nonetheless, when real issues surface, political involvement goes way up — especially when many voters feel betrayed by broken promises (see above).

3. Waste and corruption count, too: Tennessee’s budget problems stem mostly from a state health-care program called TennCare, a sort of HillaryCare-lite. TennCare has been rife with mismanagement, fraud, and incompetence since its adoption. Recent audits have shown thousands of dead people still on the benefit rolls, even as providers go unpaid. But the governor and Legislature have been reluctant to address these problems because too many powerful interests would be affected. Voters noticed, and concluded that the current “revenue crisis” stemmed from corruption or ineptitude, not a real shortage of cash — and that giving the state more money would only make things worse. (This theme dominated discussion on talk radio.)

4. The powers-that-be aren’t anymore: Without talk radio and the Internet, Tennessee would probably have an income tax now. The major media were almost all pro-tax, and anti-tax groups got little
publicity, most of it negative and condescending. Used to the old way of doing things, state politicians (many of whom barely use e-mail) missed the groundswell of opposition until it was too late. Tax opponents, meanwhile, simply bypassed the traditional gatekeepers in the media and took their case directly to the people. The people responded.

The strength of that response suggests that Wills and Wilentz are a bit premature in announcing public enthusiasm for big government. It also suggests that those who favor increased taxes and higher spending had better make their case squarely to the people, and not rely on traditional insider techniques. Those just don’t work anymore.

Most important, the Tennessee Tea Party indicates that while people may, in theory, be willing to pay more in taxes for additional government services, they are unwilling to do so in practice when they feel that politicians are can’t be trusted to deliver on their word. In the late-Clinton era, that’s most of the time. Those who want to
see activist government restored would be well-advised to start demanding honesty from political leaders, rather than attempting to excuse their misdeeds.

* * * * * * *

Prof. Glenn Harlan Reynolds,, is the author,
with Peter W. Morgan, of “The Appearance of Impropriety: How the
Ethics Wars Have Undermined American Government, Business and Society”(The Free Press, 1997).

The new

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