Forty-nine states are still governable because they haven't yet imitated California, which indulges the contradictory whims of its voters. Californians always want more services but not the taxes to pay for them, and they amend their state constitution regularly to achieve those results. Anyone with a harebrained scheme can put a constitutional amendment before the voters without too much trouble.
Although it is considerably harder than in California, Arkansas for nearly a century has had an initiative process, too, but thanks to the courts or the voters it has shunned the extremes that have produced California's state of anarchy.
That could always change, and desperate times and rising public rage create a climate for it. Attorney General Dustin McDaniel last week approved the popular name and ballot title for an initiated amendment that would provide the perfect vehicle for anarchy if the backers get the signatures, the Arkansas Supreme Court lets it on the ballot and a bare majority of voters ratify it. It is a state version of the loony “Fair Tax” that Mike Huckabee thought was his ticket to the presidency in 2008, so we can presume that Huckabee would take a break from his Fox broadcasting to campaign for it. His own state could provide a laboratory for the experiment.
The authors, a Fort Smith-based business group called Arkansas Progressive Group, call it the “AR One Tax.” The amendment would end nearly all taxes paid by businesses and the rich and lots of the taxes paid by ordinary people, and in their place it would impose a massive sales tax on merchandise of every description, which would be paid only by individuals.
Fortunately, the amendment, its popular name and its ballot title are all so clumsily and thoughtlessly written that the Supreme Court is unlikely to let it go on the ballot. No voter could possibly understand what he or she was voting on, which is the court's test of whether any proposition can go on the ballot. The attorney general made a change or two in the ballot title that make it even more inaccurate than the authors' version. (He wouldn't do that on purpose, would he?)
I'm not keen on helping the sponsors or the attorney general fix it, but a few discrepancies ought to leap out at any one. Here is one: The popular name describes it as a constitutional amendment “to Repeal All State Taxes” — no exceptions — and establish a flat-rate sales tax. The ballot title, which is what the voters would read in the voting booth, says it would repeal all taxes that are levied by the legislature. But when you read the actual amendment “all state taxes” means only a few taxes. My quick calculation is that it would repeal at most 25 or so taxes out of some 110 taxes levied by the legislature. Cigarette taxes would be repealed, for example, but liquor taxes would not.
If the amendment were ratified and the courts followed common statutory construction in interpreting it, the amendment would repeal only three or four taxes: personal and corporate income taxes, including income taxes on capital gains, and the real-estate transfer tax. That is because the amendment and the ballot title weirdly follow the sweeping repeal of “all state taxes” with five specific taxes that would be repealed: “The capital gains tax; The corporate tax; Income taxes; Payroll taxes; and The real estate transfer tax.” The state doesn't levy payroll taxes, unless it is talking about the employment security, or unemployment, tax. And what is “the corporate tax”? There are a bunch of corporate taxes. Maybe they want to repeal the little franchise tax but who can say?
In interpreting law, courts have ruled that when a general provision is followed by specific provisions, the specific ones must be viewed as limiting the effect of the law to them.
But let's assume that it did repeal all 25 or so taxes that are listed in Title 26, Subtitle 5 of the Arkansas Code, which seems to be what the authors intend. It would end taxes that support the general services of the state: the public schools, colleges and universities, prisons, all public health and medical services, law enforcement, the courts and many of the services provided by cities and counties along with maintenance and building of the state highways.
The legislature would pass a single sales tax to make up the difference to pay for all those services. The tax would have to be 20 percent, 25 percent — who knows? Since all businesses of any kind, big or small, would not pay a sales tax on anything — not on the fuel and energy they consume or any equipment or merchandise that they buy for business use — the tax rate paid by individual consumers would have to be high enough to make up for that huge loss of revenue. The amendment says no services could be taxed either although other parts of the amendment seem to contradict that.
The price of commodities in Arkansas would be so high that people would buy everything they could — cars and appliances, for example, maybe groceries and clothing — across the borders or over the Internet. It would create the biggest black market in the world outside of the Middle East.
Oh, but the amendment would require the state to send every rich, middling and poor person in the state, as long as they were citizens and registered with the state finance agency, a monthly check to cover the expenses of living in poverty. What a deal!
But that is my description. Money and a good propagandist — Frank (Death Tax) Luntz maybe — could make it sound like everyone's bonanza. Ask yourself: Is the average voter smarter than Mike Huckabee?