The Case for a Supermajority to Raise Taxes
HJR 7 proposes a constitutional amendment that would require increases in state taxes be approved by a two-thirds "supermajority" of the legislature. The Buckeye Institute has a long record of advocating for a smaller state government, and a supermajority requirement should constrain the ability of the legislature to expand government.[1] Therefore, HJR 7 is consistent with our long-held position.[2]
The concept of a supermajority is hardly new. For issues of particular importance, such as constitutional amendments, most states and the federal government require majorities in excess of a simple majority for passage. Therefore, there is nothing undemocratic about a supermajority requirement; alternatively, there is nothing special per se about the standard "fifty percent plus one" rule of passage.
It is widely recognized that one of the most significant threats in any democracy is the ability of the majority to tyrannize the minority.[3] In fact, we also worry as much, if not more, about the ability of organized special interests to use the political process to exploit an unorganized majority.[4]
If we wanted to eliminate such threats, of course, we could require a unanimity rule to pass legislation. There would be little threat of tyranny if we required all parties to agree to any measure before passage. The downside of such a rule is that the costs of the requisite negotiating among the participants would be very high indeed, and many worthwhile decisions would die on the vine. In addition, unanimity would allow "holdouts" to strategically bargain with the remaining participants, thus threatening any agreement from taking place.[5]
Because of these problems, collective decisions must in fact be made with a decision rule that is less than unanimous if we are going to get anything done.[6] But there is no reason to suppose that a simple majority is necessarily the optimal decision rule.
For relatively minor decisions, the low-cost simple majority rule is probably acceptable in most circumstances. But for significant decisions, a supermajority is clearly called for.
The question then before us is whether tax increases represent a significant enough threat to warrant the extra protections afforded by a supermajority rule? I think the answer to this question is yes.
Taxes represent a claim on the part of the government on the property of citizens, and as Justice Marshall told us, "the power to tax involves the power to destroy."[7] The majority (or for that matter an organized special interest) can often use the power to tax to effectively steal the property of others.
The use of the power to tax to take property from one to give to another jeopardizes the very legitimacy of government. A supermajority is a way to better assure that taxes are being used for truly public purposes that better all (or at least most) Ohioans.
Ohio would not be unique if it were to enact this legislation. At least a dozen states have some form of supermajority requirement to raise taxes and/or increase government spending beyond some limit.[8]
Supermajority requirements have hardly prevented states and the federal government from amending their constitutions when desired. And looking back at those cases in which constitutional amendments failed to get the necessary supermajority, but did get a simple majority, such as the Equal Rights Amendment, one could argue that we were wise to avoid passing such measures given the lack of a true consensus.
Supermajorities can act as a brake against rash political decisions which we would later regret, but which we would have difficulty undoing ex post. Like other constitutional restrictions (such as the Bill of Rights, term limits, etc.), it is designed to reduce the likelihood of the worst kinds of abuses that can occur in any democracy.
By itself, a supermajority rule alone will not usher in an era of radically smaller government. After all, a supermajority requirement does not prevent tax increases, it merely requires that any tax increase receive broad-based support and be for the common good. This is only prudent given the potentially destructive nature of taxes.
This article was given as testimony before the Ohio House Ways & Means Committee on May 8, 2003.
Notes
[1] A very good overview of the arguments in favor of supermajority rules can be found in an article by John O. McGinnis and Michael B. Rappaport, "The Case for Supermajority Rules," Policy Review, December 1999.
[2] The Buckeye Institute does not advocate for or against particular pieces of legislation, but rather argues for policies consistent with our mission. Nothing written or spoken here should be construed as an attempt to aid or hinder the passage of any legislation.
[3] This fear consumed the Founders and is the reason behind the many of the features embedded in the Constitution itself. The Bill of Rights in particular represents an attempt to protect the minority from the political power of the majority.
[4] A classic discussion on this topic is by Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge, MA: Harvard University Press, 1965).
[5] This discussion draws heavily on the classic work of Nobel Laureate James Buchanan and Gordon Tullock, The Calculus of Consent: Logical Foundations of Constitutional Democracy (Ann Arbor: University of Michigan Press, 1965).
[6] However, requiring unanimous agreement is the norm in our private lives. In markets, which rely on voluntary exchange, all parties to the transactions must agree for a transaction to take place. In essence, everyone in markets has veto power to kill any deal in which he is a participant.
[7] McCulloch v. Maryland
[8] These states include Arizona (1992), Arkansas (1934), California (1978), Delaware (1980), Florida (1971/1996), Louisiana (1966), Mississippi (1970), Nevada (1996), Oklahoma (1992), Oregon (1996), South Dakota (1996), Washington (1993). For more information, see: http://www.atr.org/issues/tla/2002_supermajority_memo2.pdf
Robert A. Lawson, Ph.D. is Professor of Economics and George H. Moor Chair at Capital University in Columbus, Ohio and a Senior Fellow with The Buckeye Institute.
