Is It Inevitable that the Temporary State Tax Hikes Become Permanent?

Almost no one talked about it during the election, but it became on the top 3 topics immediately afterward. The budget revenue forecast was weak. The temporary tax hikes expire next fiscal year unless the DE General Assembly extends them. Will Democrats be willing to let any of it go? There is nothing so permanent as a temporary tax hike when Democrats are in charge.

19 thoughts on “Is It Inevitable that the Temporary State Tax Hikes Become Permanent?”

  1. David
    We all know that no tax hike is temporary. It will become a cash cow for the administration.
    It’s the same on toll roads and bridges, but they don’t even pretend these are temporary any more. Anybody that believes any tax hike under the Obama Administration is temporary is delusional.

  2. The Republicans passed a temporary tax hike almost 30 years ago too. Its called the Gross Receipts Tax.
    Theres enough blame to go around for both parties.

  3. “We all know that no tax hike is temporary. It will become a cash cow for the administration.”

    In truth, we all know that the budget must balance. How do you propose to do that without the revenue?

  4. The topic is whether temporary “state” taxes would become permanent. So Don, regardless of how you feel about Obama, the last I understood, he was not responsibile for state tax rates. Of course if you are using Obama as catchall for everything you don’t like, then I guess you can blame him for state taxe hikes.

    Of course, SSI money comes from somewhere unless the person collecting SSI has paid into the system for a number of years, the payments have to come from the collective payments of all the other payees. I’d kinda be happy with a pay as you go system where you only get what you put in. Would that work out ok for you?

  5. Dave
    “Of course if you are using Obama as catchall for everything you don’t like, then I guess you can blame him for state taxe hikes.”

    In states like Delaware, our Governor Markell follows many of Obama’s decisions lockstep at the state level, so it may look like I blame everything on Obama, but that’s not true.

  6. “We all know that no tax hike is temporary.”

    Top tax rate, 1946 – 91%.
    Top tax rate, 2013 – 39.6%.

    The answer is yes, the rates will become permanent, because the people who won the elections want it to be. You want it to be different? Run some candidates who recognize reality.

    And this might be a good time to point out the awesome super-conservatives like John Atkins and Danny Short who were the deciding votes to pass the tax hikes in the first place. But hey, as long as they love them some guns, who cares about taxes and spending? Amiright? Amiright?

  7. I would rather have my fundamental rights than a tax cut, but I would rather have both.

    They won reelection did they not? Didn’t Short vote against all but one of the tax hikes in exchange for making them sunset it? We were in a major crisis then. I am not a fan of those tax hikes, but now we have adjusted over 4 years. Instead of setting money aside, we spent it. It is not a responsible choice.

    I agree that we get the government we elect. Think about that in 2014.

  8. “They won reelection did they not?”

    That’s our highest ideal now? Whether or not they can get re-elected? Obama got re-elected. So did Markell, Carper, Carney KWS. I guess that absolves them of their policy choices.

    “Think about that in 2014.”

    Sorry, but I’m not one who needs to have that discussion with myself. I’m fully aware of the consequences of elections and I recognize the fact that to govern you need votes, not purity.

  9. How does one vote out of 41 becoming the deciding vote? Couldnt you pick any one Representative that voted to solve the revenue probems and say the same about him/her?

  10. Sure (to comment 10), but that makes the point, only one change affects the entire result. That vote was the end of an era of relevance for the GOP in Delaware. The GOP ran a campaign that they should have an some house seats in special elections because they could block tax hikes if they kept the Democrats from getting 3/5 majority. They won even in a Democratic district in NCC. They then, in exchange for a 4 year sunset, allowed on member to rotate through with another and give a vote to pass the tax hikes because they did not want to present an alternative budget. The public did not buy the nuance. Instead of being rewarded for not being obstructionists, which was the logic of that plan, the public said why bother? They lost a super majority of both houses the next election.

  11. My point is that this was advertised as temporary. The last 4 years gave time to grow, but we spent that. It gave us time to make government more efficient, we did some of it, but lost focus and still waste tens of millions.

    To Anon (comment 9), yes of course it does, that was an issue in the Atkins race and your argument lost twice. The people would rather have services than extreme cuts all at once. The budget was cut. People did not want to lose teachers, police, have their kids with a bunch of sick poor kids in school, and have prisons flung open.

    This is not some moral issue, it is a policy issue and they are solved with elections.

    Now I pointed out at the time enough wasteful spending to avoid the tax hike, but Republicans did not take that to heart and form an alternative budget. They could have hammered the Democrats. Still can.

  12. Fact. The more taxes that are assessed, the better the society.
    Low taxes = Yeman, Somalia, Iran, Algeria.
    High taxes = Norway, Sweden, Finland, Japan, S. Korea,

    Only a die hard Republican would rather live in Somalia than Sweden…. (One is allowed to shoot their neighbors in Somalia; not however in Sweden.)

    End of argument. High taxes make a better lifestyle for all. Low taxes are a terrible waste of economic opportunity……

    i would bet that if we’d just tax Sussex County as an experiment, three times more than the other two counties, its rate of growth of the average wealth of all its citizens would grow at twelve times the rate of the other two counties….

    Because that is the trend. For every step up the tax ladder, one’s wealth goes up four more…

  13. “To Anon (comment 9), yes of course it does, that was an issue in the Atkins race and your argument lost twice. The people would rather have services than extreme cuts all at once. The budget was cut. People did not want to lose teachers, police, have their kids with a bunch of sick poor kids in school, and have prisons flung open.”

    Awesome argument. I hear liberals make it all the time. Very strong. Maybe we should take it a step further and raise taxes to 100% and give a bunch of free stuff out to everyone. Hell, maybe we can call that “conservative,” too.

    My point was not the merit of the decision. My point was the insistence of people (even people on here like Rick) on calling John Atkins and Danny Short conservatives despite the evidence. Particularly Atkins, who is a fiscal liberal and by virtue of his seat, makes it one step harder for the GOP to regain power. Yet that “conservative” label gives him cover to continually be re-elected and continue to toe the tax-and-spend line.

    To #10 – That’s right. They all were. So if Atkins or Short had drawn a line in the sand and said no, we wouldn’t have had a tax hike, and the state would have had to cut spending. (Does anyone really think there’s not spending that could be cut, notwithstanding David’s uber-liberal police & teachers sob story above?)

  14. I told everyone where I would have cut 200m by changing state purchasing, implementing many of the savings in the lead report, and the prison spending audit changes, but maybe you would like to show where you would make them. We already made severe cuts at the time including pay cuts and furlow days. Schools let people go.

    I always consider it odd that the places they proposed to cut next are always the popular ones. I call it the game, but the state already cut 8% of its budget that year and another 5% was not happening. I just wanted to remind you of what was happening 4 years ago. It was a legitimate argument proven by election results. Most people were not affected by the tax hikes where they could notice it. A few tenths of a percent on income over 60k was not going to cause a revolt. A greater take on the slots or gross receipts may be bad and cost jobs, but people don’t see it. People would see 6 extra kids in their class or not having full day kindergarten. They would notice their roads or State Police call times of an hour when the prisoners let out on early release come by.

    The ultra fiscal conservative position rejects that reality. That is why we are losing elections. You have to thoughtfully propose better solutions not just say don’t raise taxes even a dime. Almost no one cares if it is a small increase combined with spending cuts.

    The reality ignored by most is that both Dover and Washington need to reorganize and get the waste and duplication out of government before wasting a dime of new revenues. Washington could cut a half a trillion in waste, duplication, and mismanagement according to reports already on the Hill, yet they are ignored. Dover has hundreds of millions of savings in reports housed in desk drawers. A true fiscal conservative would run on that.

    The liberal solution is either Washington or California. D. C. borrow the money, don’t cut. CA borrow money until you can’t then raise taxes like crazy but don’t cut anything real.

  15. “You have to thoughtfully propose better solutions not just say don’t raise taxes even a dime. ”

    Once again you surprise me by acting pragmatic and all that. I don’t quite understand this yet. I’m mean “thoughtfully propose better solutions” are like words out of my own mouth! Be forewarned, those who use such words have been labeled RINOs and even liberal progressives!

  16. In truth, we all know that the budget must balance. How do you propose to do that without the revenue?

    Start cutting. For example, why do the feds give money to the rest of the world? Why do we have troops in Germany? Why do we fund ‘art’ and media (PBS, NPR)? Why contribute to bike paths? Head Start is a proven failure- why continue?

    Start cutting.

  17. “The ultra fiscal conservative position rejects that reality. That is why we are losing elections.”

    Refusing to raise taxes at the STATE level is not why we’re losing elections, even in Delaware. Don’t try to tie the state situation to the federal. Not one Republican candidate lost an election because they voted against those tax cuts. A few lost at some point, but not for that reason. They had a legitimate, one-time chance to force spending reform and clear out some of the duplication and waste, and they chose not to. Having that fight over and over again, like today’s Washington, is bad governance. Having that fight one time in Delaware would have been legitimate. Your teacher/cop sob story is what’s always offered, but there were/are more than 5% that easily could have been cut.

  18. “For example, why do the feds give money to the rest of the world?”

    I was talking about the state budget, which must balance, not the federal one. But surely you know that the largest beneficiary of foreign aid is Israel, and most of the $3 billion it receives is actually in the form of weaponry, such as fighter jets. The total is a trifling sum in a $3 trillion federal budget.

    “Why do we have troops in Germany?”

    Because we need a staging area in Europe for action in Asia, and Germany is close enough to serve as one.

    “Why do we fund ‘art’ and media (PBS, NPR)?”

    The amount spent on this is so small it makes foreign aid look towering. This is typical of conservative “cut spending!” cries — the amount saved equals a rounding error.

    “Why contribute to bike paths?”

    For public safety. Do you want to eliminate all park funding, or just for activities you don’t engage in?

    “Head Start is a proven failure- why continue?”

    It clearly is not a proven failure. The failure comes after the kids go into the regular schools. When they first emerge from Head Start the gains are real. Of course, this is yet another government service that you don’t like because you don’t use it.

    Your selfishness is as monumental as your ignorance.

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