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The Five Worst Ballot Initiatives of 2016

The Five Worst Ballot Initiatives of 2016

Posted on October 29, 2016 by Dan Mitchell

In just 10 days, voters will go to the polls and deal with the rather distasteful choice of Donald Trump and Hillary Clinton.

In some states, they also will have an opportunity to vote for or against various ballot initiatives and referendums.

Here are the five proposals that would do the most damage in my humble opinion.

ColoradoCare (Amendment #69) – Apparently learning nothing from what happened in Vermont, advocates of big government in Colorado have a proposal to impose a 10 percent payroll tax to finance statewide government-run healthcare. The Tax Foundation points out that, if this scheme is approved, Colorado’s score in the State Business Tax Climate index “would plummet from 16th overall to 34th,” while the Wall Street Journal opines that “California would look like the Cayman Islands by tax comparison” if Colorado voters say yes.

Oregon Gross Receipts Tax (Measure #97) – Back in 2010, presumably guided by the notion that it’s okay to steal via majoritarianism, Oregon voters approved a class-warfare tax hike on upper-income taxpayers. Now they’re about to vote on a scheme to pillage the state’s businesses with a gross receipts tax, which is sort of like a value-added tax but with no credit for taxes paid earlier in the production process, which means the burden “pyramids” as goods and services are created. The Tax Foundation warns that this levy could lead to “a 25 percent increase in the Oregon state budget” and that “Oregon’s corporate tax climate would be the worst in the nation.”

Maine Income Tax Hike (Question #2) – Voters are being asked whether to boost the state’s top income tax rate to 10.15, which would be the second-highest in the nation. According to the Tax Foundation, the Pine Tree State “would drop to 45th overall” in the State Business Tax Climate Index (down from #30) if this class-warfare scheme is enacted. The National Taxpayers Union warns that the ” tax would make the state a less competitive place in which to do business.”

Oklahoma Sales Tax Increase (Question #779) – Sales taxes don’t do as much damage, per dollar raised, as income taxes, but it’s still a foolish idea to impose a big tax hike in order to finance bigger government. And that’s what will happen if voters in the state agree to boost the state sales tax by one-percentage point. The Tax Foundation notes that “Question 779 would give the Sooner State the second highest combined state and local sales tax rate in the nation, after only Louisiana.

California Tax-Hike Extension (Proposition #55) – One of worst ballot initiatives in 2012 was California’s Proposition 30, which imposed a big, class-warfare tax hike on upper-income residents and gave the Golden State the nation’s highest income tax rate. One of the arguments in favor of Prop 30 was that the tax increase was only temporary, lasting until the end of 2018. Well, as Milton Friedman famously observed, there’s nothing so permanent as a temporary government program. And that apparently applies to “temporary” taxes as well.  Proposition #55 would extend the tax until 2030.

Unfortunately, there aren’t a lot of ballot initiatives that would move policy in the right direction. Here’s the one that probably matters most.

Massachusetts Charter Schools (Question #2) – Much to the dismay of teacher unions (and presumably the hacks at the NAACP as well), this initiative would expand charter schools. It’s remarkable that even the very left-leaning Boston Globe is embracing Question 2, opining that “the proposal would create new opportunities for the 32,000 students, predominantly black and Latino, who are now languishing on waiting lists hoping for a spot at a charter school” and that “Students in all Massachusetts charter schools gain the equivalent of 36 more days of learning per year in reading and 65 more days of learning in math.”

A related measure is Amendment #1 in Georgia.

Now let’s shift to a ballot initiative that is noteworthy, though I confess I don’t have a very strong opinion about the ideal outcome.

Washington Revenue-Neutral Carbon Tax (Initiative #732) – The bad news is that a carbon tax would be imposed. This means, according to the Tax Foundation, that the “average household would pay $225 more per year for gasoline under the proposal, and $64 more for electricity.” The good news is that the sales tax would drop by one cent and the state’s gross receipts tax would almost disappear. So is this a good deal? Part of me says no because it’s never a good idea to give politicians a new source of tax revenue. But the fact that the measure is opposed by many hard-left green groups suggests that the idea probably has some merit.

For what it’s worth, I would vote against I-732 because of concerns that it eventually will lead to a net increase in the burden of government.

Last but not least, I’ll also be following the results on initiatives dealing with marijuana and tobacco.

States Voting for Marijuana Legalization (and Taxation) – Voters in Arizona, California, Maine, Massachusetts, and Nevada will have an opportunity to fully or partly legalize marijuana. These initiatives also include buzz-kill provisions to levy hefty taxes on producers and consumers.

States Voting for Tobacco Tax Increases – Politicians in California, Colorado, Missouri, and North Dakota all hope that voters will approve tax hikes that target smokers (and, in some cases, vapers). In every case, the tax hikes will fund bigger government.


Class Warfare Politics Referendum States tax increase Taxation
October 29, 2016
Dan Mitchell

Dan Mitchell

Dan Mitchell is co-founder of the Center for Freedom and Prosperity and Chairman of the Board. He is an expert in international tax competition and supply-side tax policy.

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