Creative Politics: Taxes and Public Goods in a Federal System

3. Representatives’ Positions and Collective Decisions

Chapter 3 Representatives’ Positions and Collective Decisions In this chapter, I connect the parameters of federalism, public goods, and taxes to state representatives’ individual issue positions and state legislatures ’ collective decisions. Representatives rely on a fairly stable set of guiding principles when developing positions about intergovernmental policies. The emphasis given to different principles varies over time, across states, and from issue to issue, but the principles themselves remain stable. In arriving at collective decisions, a variety of economic, institutional, and political factors interact with the principles and positions of individual legislators . These interactions form much of the politics within which state legislatures produce public policy. Individual Legislators’ Positions Table 4, ‹rst presented in chapter 2, depicts changes in taxes and services and the resultant changes in bene‹t/tax ratios. From this table it can be surmised that elected of‹cials would rather focus their efforts on the options in the upper right-hand section, all of which indicate improved bene‹t/tax ratios. Representatives prefer to avoid the lower left section, where bene‹t/tax ratios decrease. Nonetheless, legislators must occasionally consider decreasing bene‹t/tax ratios—raising taxes and cutting services —or work in the nebulous cells in which both taxes and services either increase or decrease. When legislators do so, they use their governing principles to hold constant or, preferably, improve bene‹t/tax ratios. When bene‹t/tax ratios must decrease, representatives justify such decreases or attempt to placate voters by making policies as palatable as possible. In deciding whether to change services and taxes and, if so, how, state 28 representatives rely on six governing principles. At times, a single principle may dominate all others, or the political symbolism of a speci‹c issue, such as income taxes, may trump legislators’ principles. But generally, these six principles—accountability, equity, dependability, obscurability, horizontal transferability, and vertical transferability interact and shape state representatives ’ positions on policy alternatives. State legislators may seek to accomplish several goals with any single policy change or combination of policy changes. In addition to calculating changes in their constituents’ bene‹t/tax ratios and estimating a likely distribution of changes for their districts, representatives may seek to garner support from particular groups, such as parents with school-aged children or the elderly, or may attempt to avoid mobilizing opposition from such groups (Denzau and Munger 1986). Legislators may also seek to advance their careers within the legislature or within state politics. State representatives try to change policies to increase the bene‹t/tax ratios for most, if not all, of their constituents. Consequently, the principles they emphasize will work to move them to the cells in table 4 that offer unequivocal increases in bene‹t/tax ratios. When policy changes indicate either increases or decreases in both tax and services, legislators are less certain about changes in bene‹t/tax ratios, although they may structure policy changes in an effort to increase the probability of an increase for most of their constituents, as chapters 4, 6, and 7 will show. Conversely, representatives may structure changes so that bene‹t/tax ratio decreases fall on as few citizens as possible. Governing Principles In addition to the paradoxical objectives of providing services and not imposing taxes, state representatives may have numerous other personal Representatives’ Positions and Collective Decisions 29 TABLE 4. Changes in Government Services, Taxes, and Benefit/Tax Ratio Changes Taxes Services Increase No Change Decrease Increase ? Increase Increase No Change Decrease No Change Increase Decrease Decrease Decrease ? and collective goals. Individually, legislators may seek to increase their in›uence within state government, to develop good public policies, and to further their own political careers (Fenno 1973). Collectively, state representatives develop policies that allow for stable revenues and expenditures, endeavor to build majority coalitions, and encourage economic development . Regardless of which goals have priority, state representatives ‹nd themselves in an ongoing political process, and this chapter outlines the six principles. These principles guide legislators’ views and decisions about policies. In addition to the six governing principles, I also discuss the role of political symbolism, direct democracy, and policy history in federal politics . 1. Dependability Many scholars have noted that state taxes are typically regressive relative to federal taxes. One rationale for regressivity offered by state representatives is that regressive revenues are dependable and provide funds in both good times and bad. Fifty-two percent of the legislators mentioned dependability in the interviews...