Idaho Considers Tax Supermajority Requirement

Idaho is considering a supermajority requirement for tax and fee increases (PDF).

State legislation is often described as an expression of majority rule. However, the legislative process contains steps that seem designed to hinder spontaneous expressions of majority sentiment. A bill needs to demonstrate a likelihood of success and some measure of approval from legislative leaders. Passage must be agreed to by two separate popularly elected houses. The Governor, him- or herself popularly elected, must sign the bill. Simply put, the normal legislative process has an implicit goal of ensuring final products are subjected to extensive consideration over a period of time by several actors, and has incorporated elements that further that goal.

In many states, to become law, tax increases must constitutionally survive one additional hurdle beyond the hurdles other legislation must survive. These hurdles can include voter approval, multiple readings, and committee origin requirements (as in the federal government). In sixteen states, the hurdle rises to a higher threshold of legislative approval.

Requiring a higher threshold for taxes has historically been justified on similar grounds as for other subject matters subject to supermajority requirements. Impeachments and removals from office, constitutional amendments, and ending filibusters are all common examples of matters considered so important that a simple majority vote would not deliver the sought-after public consensus and thorough consideration.

The sixteen states that have such a rule for tax increases are as follows:

tate

Year of Adoption

Required Vote

Notes

Arizona

1992

66.6%

Arkansas

1934

75.0%

Only applicable to taxes existing in 1934

California

1979

66.6%

Colorado

1992

66.6%

Also subject to voter approval

Delaware

1980

60.0%

Florida

1971

60.0%

Corporate income tax only, if increase exceeds 5% limit

Kentucky

2000

60.0%

Taxes and fees, in odd-numbered years only

Louisiana

1966

66.6%

Michigan

1994

75.0%

Mississippi

1970

60.0%

Missouri

1996

66.6%

Only if Governor declares emergency; otherwise requires voter approval

Nevada

1996

66.6%

Oklahoma

1992

75.0%

Oregon

1996

60.0%

South Dakota

1996

66.6%

Washington

1993

66.6%

Tax increases over spending limit also require voter approval

Supermajority requirements for tax increases are common and long-standing in the states. It would be silly to say that these requirements are unusual or have destroyed the states where they exist. It is true that they diffuse the will of a bare majority, but so do many other steps in the lawmaking process.

Opponents of tax increase supermajority requirements make three basic arguments. First, they say that such requirements are unnecessary given Americans’ aversion to taxes. But since states aer increasingly shifting tax burdens to unpopular political minorities, a supermajority allows greater ability to slow down and consider concerns shared by, or imposed on, a minority.

Second, opponents say that supermajority requirements empower a minority, which in turn can become obstructionist and demand unrelated favors in return for votes. I will concede that a supermajority requirement empowers a minority; indeed, that is its purpose. This in of itself is not a bad thing: much of our constitutional structure and the rules of parliamentary procedure are designed to protect the rights of a minority against an otherwise steamroller majority. Logrolling, of course, can present a problem for legislatures no matter the vote threshold.

Third, opponents say that many supermajority requirements have led to legal uncertainty, primarily because many cover taxes but not fees. A legal scholarship must then be developed, distinguishing taxes from fees, and this is not always easy. I have two responses. First, some states cover both taxes and fees, which eliminates this uncertainty. Second, such a legal scholarship exists and has come to a remarkable consensus. The Tax Foundation tracks dozens of cases and laws in dozens of states, many of which have developed cogent definitions of what taxes are and when they differ from fees. Idaho, if it adopted this bill, could rely on these precedents quite easily.

Requiring additional consideration and empowering a minority when considering tax issues means a greater likelihood that the resulting bill will be the product of consensus and thoughtful consideration. The additional consideration also sends the signal that tax increases will not happen suddenly, and the additional legislative give-and-take reduces the chance that a minority will alone bear the burden of higher taxes. This increased stability in turn furthers the certainty required for investment, capital formation, and job creation.


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