Taxes undo Mass. Guv & other Dems

(Wellfleet, MA – July 20) This is a small Cape Cod community –about 500 people when I was growing up- now part of Massachusetts’ National Seashore Park. It’s also home to a few hardy souls with whom I shared the experience of a one-room school house presided over by a septuagenarian female teacher whose reproving glances struck abject fear in our young hearts.

One of the advantages of encountering such old friends is that it is possible to discuss current events without hitting the high wall that these flinty New Englanders usually erect between themselves and nosy “outsiders”. Thus of a recent morning I enjoyed some illuminating conversation concerning Massachusetts politics- usually a good source of light entertainment if not moral uplift.

It’s been a tough week for the state’s Democratic governor, Deval Patrick. On Monday the Democratic State Treasurer Tim Cahill announced he was quitting the party and signaled pretty clearly that he would run against Patrick as an Independent. On Wednesday Charles Baker, a prominent Republican businessman with deep pockets, announced that he too would challenge the incumbent.

Illustrating a key reason for Patrick’s vulnerability was the discovery on Tuesday that the state’s budget gap- already 3.2 billion dollars- had worsened by an additional 200 million dollars owing to dismal June revenues.

The basic cause of Patrick’s plummeting approval ratings and the consequent electoral challenges is no mystery: Taxes. With the concurrence of the Democrat controlled legislature Patrick has recently done the following: a. increased highway tolls by 25 %; b. increased Metropolitan bus and subway fares by 30 %; c. imposed a first ever tax on retail alcohol sales (two dollars on a fifth of Scotch. Ouch!); and d. –causing the most outrage- raised the already high sales tax by 25%.

The use of weasel terms like “fee adjustments”, or “revenue enhancements”, or Patrick’s gem-“state income improvement measures” does not fool but does further infuriate a public that knows a tax increase when it sees one.

Also significant is that all of those taxes are regressive in nature falling most heavily on those lower income groups that have traditionally been the foundation of the Democrats’ electoral base.

All of this however is not just a Massachusetts story, but rather a template for states across the nation where Democrats are running things. The recession has put the Democratic Party under a harsh spotlight that has simultaneously exposed their deeply flawed approach to governance and their fundamental incapacity to preside over difficult economic times like the present.

The recession undermines and ultimately makes counter-productive the Democrats favorite activity: Spending. It also impels them toward the only remedy tolerated by their ruling elites: The political Kool-Aid of Tax Increases.

At the heart of the Democrats’ dilemma are three inherent defects that have long plagued their party: 1.They are constitutionally incapable of grasping the concept that lower tax rates can generate higher tax revenues (See Reagan,R., 1981); 2. They are politically incapable of any budget or policy initiative opposed by their union allies; and 3. Ideology makes them utterly blind to the fact that creating a “business friendly” climate is essential to any sustained economic recovery.

Historically, political change in the U.S. begins at the state level before going national. An excellent example is Proposition 13- California’s 1978 tax revolt that prefigured the triumph of Ronald Reagan.

A major reason for this pattern is that economically speaking reality bites earlier and harder at the state level. Economic make-believe can be sustained longer at the Federal level because it is a remote and artificial environment that prints its own money- a luxury unavailable to states where budgets must be balanced in real time.

Accordingly political retribution is swifter at the state level. Gubernatorial approval ratings nosedive faster than the Presidential variety, but in the end both are reflective of economic malfeasance, and the populist backlash it generates.

In 2006 Deval Patrick was an attractive, articulate outsider who preached a gospel of “Hope and Change”. His good friend Barack Obama even admitted in 2008 to plagiarizing a few of Patrick’s speeches.

No doubt friend Obama has noticed that Patrick’s “Hope and Change” bandwagon has collided head-on with “Reality and Disillusion”.

An increasingly restless nation waits to see what if any lessons our new President will learn.


William Moloney’s columns have appeared in the Wall St. Journal, USA Today, Washington Post, Washington Times, Philadephia Inquirer, Baltimore Sun, Denver Post, and Rocky Mountain News.

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