I’ve referred to Colorado’s spending cap as a “role model” and the “gold standard,” and I lavished even more praise on the Taxpayer Bill of Rights in this clip from a recent interview with Penn Pfiffner of the TABOR Foundation.
If you don’t have a couple of minutes to watch the video, all you need to know is that balanced budget requirements are mostly ineffective.
Or, if you want to be pessimistic, such rules actually give politicians an excuse to raise taxes.
What makes TABOR so successful is that it is designed to control the variable that really matters, which is the growth of government.
TABOR basically tells politicians they can increase spending every year, but no faster than population plus inflation.
Has it worked perfectly? Of course not. But it has returned more than $8 billion to the taxpayers of Colorado.
And Colorado definitely has out-performed other states economically, as measured by the growth of per-capita income.
This is the approach we need in Washington. Heck, even international bureaucracies have acknowledged that spending caps are the only effective fiscal rule.
It is also worth noting that the German government recently endorsed that approach for Europe, which is a positive development since the European Union’s anti-deficit rules obviously have not been effective.
So I’ll be very curious to see whether any 2024 presidential candidates decide to embrace this approach (whether they are sincere is a different issue, needless to say).
P.S. The international version of TABOR is the Swiss Debt Brake.
P.P.S. I also recommend this video about spending caps.
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Image credit: Pictures of Money | CC BY 2.0.
