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BRUNORI: LEGISLATORS WELL MEANING, BUT IGNORANT

September 12, 2005

The Tax Analysts state tax correspondent has been chatting with state legislators. The results are somewhat depressing:

I've spent the last couple of months talking to state legislators about tax policy. I talked to 100 legislators from 38 states, either by calling them or seeing them at conferences. I tried to talk to lawmakers who weren't members of taxwriting committees. If the sample I picked is representative, state lawmakers --- Democrats and Republicans --- are well-meaning, principled people. They serve to make society a better place. I talked to some hard-core conservatives as well as flaming liberals. I ended my sojourn feeling much better in general about our elected state leaders.

But most lawmakers are also woefully uneducated about tax policy. Far too many are willing to narrow the tax base to advance some particular economic or political agenda. All 100 lawmakers I spoke with supported some type of tax exemption. Of course, they all said the exemptions they supported were for "very good causes."

More troubling, I found that many of the lawmakers didn't understand that the more exemptions and deductions granted, the higher rates must be to raise revenue. Many lawmakers didn't know that riddling the tax base with exemptions leads to market distortions and higher compliance and administrative costs.

Depressing, but not surprising. Legislators hear from a lot of deserving constituents who really could use a tax break, and not a lot from those whose tax lives become more complex with every targeted tax credit.

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