AlterNet: How ‘Small Government’ Conservatives Raise Your Taxes Through Stealthy Back-Door Fees

From drivers' licenses to public schools, state and local governments are raising money any way they can–all while cutting taxes on the rich.

-By Joshua Holland

September 9, 2011- Here's a simple fact the Right would like you to ignore: cutting public spending doesn't lead to fewer dollars being “taken out of your pocket” for the services government provides; it merely shifts those costs around, and often increases them.

When conservatives say, “I'm for lower taxes and fiscal responsibility,” what they really mean is that they favor cutting top marginal tax rates – those paid by a relatively wealthy few – capital gains taxes on investments, inheritance taxes and taxes on corporations. And to make up for those revenue losses, they are happy to run higher deficits and very quick to raise taxes on the rest of us.

At the federal level, they can and do finance some of the tax cuts they hand out to their patrons through deficit spending. That's why Ronald Reagan increased the national debt by almost 14 percent per year, both Bushes upped it by around 10 percent annually and yet under Bill Clinton it increased by just 4.2 percent per year.

But the states – and local communities – can't run deficits. Whether dealing with a massive drop in tax revenues as a result of a recession, or gaps they created by pandering to voters with endless tax cuts, they have three ways to go. They can: a) cut services, which is politically unpopular and also can lead to situations such as in Texas, most of which is on fire after it slashed firefighting budgets; b) make up the gap with federal funds, as so many conservative governors who rail about federal spending are happy to do; or c) hike the fees their citizens pay for government services – fees for everything from motor vehicle registration to hunting licenses and user fees for recreational areas.

This last option has proven appeal with conservative politicians because they can say, with only technical accuracy, that they didn't raise your taxes. Across the country, state and local governments are squeezing ordinary people for every penny they can lay their hands on, and the burden these fee increases can put on ordinary families is often significant. Make no mistake: these fees are completely regressive — it costs a billionaire the same amount to renew his or her driver's license as it does a pauper.


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