Anti-tax but not anti-spend

Steve Tripoli Nov 8, 2006

KAI RYSSDAL: Every time there’s an election in this country you learn something about the voters. One lesson this year seems to be that Americans are deeply conflicted. Not just about party divides. Democrats and Republicans. But on some big policy issues, too. Americans are widely perceived to be strongly anti-tax. Then yesterday they turn around and do the next best thing to themselves. Voters passed a record-setting bundle of bond and debt obligations. Marketplace’s Steve Tripoli has more.

STEVE TRIPOLI: What a haul — $56 billion in new bonds and borrowing approved by voters yesterday. The general argument in favor was that infrastructure and other needs have languished for too long.

Kristina Wilfore of the left-leaning Ballot Initiative Strategy Center says it’s a sign that voters no longer believe they can have their tax cuts and services too.

KRISTINA WILFORE: And they are taking their kids to school, and going to parks and driving on highways and all of the things that bonds support. We can’t have this abstract conversation about the role of government without feeling the everyday effects of it in everyone’s lives.

Bob Kurtter of Moody’s Investors’ Service says voters have their reasons for borrowing instead of taxing themselves.

KURTTER: People are willing to spend money, and to see money spent for important public needs that they can identify.

What they don’t like, Kurtter says, are less-targeted spending plans, like taxes, for purposes they might not support. And anyway, says Kurtter, a bond or debt issue doesn’t hit a voter’s pocketbook like a tax. Bond issues are rolled out over many years and paid for over decades.

KURTTER: So that the extent to which that impacts the budget is spread out over a much longer period of time. A tax increase obviously has a much more near-term and immediate effect.

Call it the credit-card generation’s way of spending. But when all is said and done, voters agreed to spend a whole lot more of their money. And on top of that they also shot down tax-limiting measures in Maine, Nebraska and Oregon. Even some business groups lined up against them.

Conclusion? For one day at least, voters were saying that the movement toward limited government has, well, limits.

I’m Steve Tripoli for Marketplace.

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