Alabama tax massacre

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The Alabama establishment thought the fix was in for the largest tax increase in the state's history. All that was needed was approval by the voters to bypass constitutional limitations.

The tax increase had the ardent support of the badly duped conservative Republican Gov. Bob Riley. Moreover, the state legislature had already approved the increase with bipartisan support.

The badly duped state business establishment also supported the increase, along with the state's bureaucrats and their unions. They poured millions into a campaign to dupe voters into supporting it, outspending opponents by more than 20 to 1.

But when the Sept. 9 votes were counted, the tax increase was massacred by 68 percent to 32 percent. The establishment tax increasers got a smaller percentage of the vote than Alf Landon did against Franklin Roosevelt in 1936.

This is the third time in the last year a major tax increase supported by a state's governor and its entire political and business establishment has been defeated with more than 60 percent of the vote. Virginia rejected sales tax increases last November, and Missouri rejected a similar proposal last August. The voters rightly recognized that the sharply increased government spending that would result was not going to accomplish much and might well be counterproductive.

These results do not bode well for Howard Dean's economic policy of massively increasing income taxes by reversing the Bush tax cuts. In Howard Dean, the Democrats seem to have finally found their answer to Alf Landon.

But there is a much deeper implication of these results for national politics. The Alabama experience shows how badly disconnected the political elite can be from the general public. The state's entire political establishment just talked itself into an extremist fantasyland, well out of the mainstream views of the voters.

The same delusional game is going on in state after state. Local officials unsophisticated in fiscal, economic and tax policy get wined and dined and songed and danced by lefty charlatans posing as objective experts. The theme song is that good government requires massive increases in state taxes and spending.

These local rubes, many of them supposedly Republicans, consequently get conned into supporting tax proposals that make Hillary Clinton look like a conservative. The new rage is that state taxes should be reformed to be more "progressive," which means punishing hard work and productivity. Besides being morally obtuse, such tax policies would only make state taxes far more economically destructive.

The same phenomenon now is going on in the Democratic presidential campaigns. The lefty elites have whipped themselves into an extremist lather believing the American people, like them, are horrified George Bush was so mean to Saddam Hitler Hussein, and the U.N. and the French. They are certain the American people, like them, think the only moral course is to rely on the U.N. for the nation's security.

Moreover, they have convinced themselves the American people are hungry for massive increases in taxes and government social spending. Also, vote for them and they will satisfy the nation's deep thirst for true equality through gay marriage.

That is a platform deep in the same 68 percent to 32 percent extremist fantasyland as Gov. Bob Riley and the Alabama political establishment. Right now, the biggest danger the Bush campaign faces next year is overconfidence. The message that needs to be sent to the Republican and conservative base is that the margin of victory next year will be as important as the victory itself, given the potential for banishing the entire Democrat Party to the political fringe for years to come.

Meanwhile, the fantasyland parade is once again returning to nearby Virginia. Democrat Gov. Mark Warner wants to challenge Sen. George Allen for re-election in 2006 on the legacy of having enacted the largest tax increase in Virginia's history.

He calls this scheme tax reform, but the details that have leaked out show it to be quite similar to the Alabama disaster. He wants to increase state taxes by more than $1 billion a year, while making the state tax code more "progressive," minimizing moral equality and maximizing economic havoc.

Mr. Warner is counting on getting this through the Republican legislature with the support of Bob Riley type stooges, like Senate Finance Committee Chairman John Chichester. Mr. Chichester is another local who lacks the sophistication to see that Mr. Warner's tax reform scam is the same economic policy advanced nationally by Howard Dean.

Before Mr. Chichester leads Virginia Republicans into the same extremist fantasyland as Mr. Riley in Alabama, the Senate Republican Caucus, backed by the state party, needs to start next year's legislature by replacing Mr. Chichester as Finance Committee chairman with someone more mainstream.

Peter Ferrara is director of the International Center for Law and Economics and president of the Virginia Club for Growth.