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Bluegrass Beacon: Tax-hiking zealots may resort to sneaky legislative gimmicks

By JIM WATERS
Bluegrass Institute for Public Policy Solutions

Thursday, March 25, 2021 — Since special-interest groups pressuring legislators to raise Kentuckians’ taxes wouldn’t dare take a credible poll to find out what the average taxpayer thinks, let’s do one here using this question: How do you, as a hardworking Kentuckian, feel about the possibility of state lawmakers adding a huge gas tax, especially considering prices at the pump could soon exceed $3 a gallon?

Regarding such an irresponsible policy, are you:

a) happy about the prospects of state government taking more money out of your pocket? After all, government knows better than you how to spend your money. Right?

b) wishing politicians and special-interest groups would focus on more efficiently spending the billions already taken in by Frankfort each year. Wouldn’t more effective prioritizing of those dollars – including ensuring infrastructure needs are met instead of pouring more into wasteful projects like Kentucky Wired – be a better road to take?

It doesn’t seem relevant to ask about political affiliation, race, gender or age since Kentuckians of all ages, races and political persuasions will experience the brunt of a gas tax hike.

Perhaps the only relevant category to include is poll-participants’ incomes, since raising gas taxes disproportionately affect working and lower-income families, forcing them to spend a higher percentage of their pay getting to work or school and purchasing goods – including groceries and clothes – delivered by trucks.

The most consequential polls, of course, are elections, where voters sometimes get to decide these issues.

Three years ago, 53% of voters rejected a ballot measure proposing a ginormous increase in Missouri’s gas tax.

Instead of respecting the wishes of the Show-Me State’s voters, pro-tax-hike cronies resorted to proposing gimmicks in Missouri and a handful of other states, including offering residents a refund on the higher prices they pay at the pump, an inclusion meant to try and make upping gas taxes more palatable for wobbly politicians and unsupportive citizens.

We’re likely to see such a ploy offered in Frankfort during the closing days of this year’s legislative session. But it’s nothing more than a talking point and certainly isn’t a serious policy proposal.

Few Kentuckians will engage in the laborious process of saving all those flimsy little gas receipts cluttering their car floors and bulging from their glove compartments and go through the trouble of bundling and shipping them to Frankfort just to receive a rebate check in the mail weeks later.

Even the Tax Foundation, which overtly supports a higher gas tax in Kentucky, once stated that such a stunt “will be massively complex for taxpayers and administrators, and the compliance costs will be huge.”

We could also see legislative gimmicks during the final hours of the General Assembly session, including burying a sizable gas-tax increase in a
shell bill created to circumvent the transparent legislative-deadline process.

Supporters of this evasive policy failed earlier in the session to get traction to move House Bill 561, which was clearly labeled as a gas-tax increase from the time it was filed.

Expect them to attempt sneaking a tax hike through by burying it in legislation like House Bill 321, which is described only as being for the purpose of requiring the state’s revenue department “to adhere to any extension of the 2020 federal income tax return filing.”

It’s a benign bill which resulted in easy passage in the Kentucky House and has already had two of the three readings needed for passage by the Senate.

Ironically, one of the index headings of the original version of HB 321 indicated the legislation was associated with a “Taxpayer Bill of Rights.”

Considering the harm such legislative chicanery and complete lack of transparency will result in for hardworking Kentuckians facing the double whammy of recovering amid COVID-19’s economic fallout while paying more at the pump, taxpayers’ worries – much less their “rights” – are of little concern to these tax-hiking crusaders.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free market think tank. Read previous columns at www.bipps.org. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.

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