Harvard University economist and blogger Greg Mankiw likes it that Fred Thompson "is a big believer in principles of federalism--a topic that in recent years has received far too little attention in the public debate."
On his blog, Mankiw quotes a recent article Thompson wrote about federalism, and comments:
I am skeptical of big government because of its adverse impact on economic efficiency and personal liberty, and so I often vote for tax-cutting candidates at the national level. But my skepticism fades away when the discussion turns to local government. Massachusetts has a tax limitation rule, which towns can override by voter referendum, which occurs here in Wellesley every few years. I almost always vote for higher local taxes. I have a taste for publicly provided goods, such as nice playgrounds and good schools, and if the town of Wellesley ever gets too inefficient or powerful, I can just move to Newton or Lexington.
The current Administration has not been very good for believers in federalism--the No Child Left Behind Act a notable example. Let's hope that Thompson's entering the race focuses attention on the issue.
Like Mankiw, I prefer smaller federal government and lower taxes. Here in Tennessee, state government is limited in how fast its budget can grow, though the legislature over-uses a loophole to get around the limit. A few years ago that lead me to start researching Colorado's tax-and-spending limitation in its state constitution, the Taxpayer's Bill of Rights, which even limits the growth of taxes and spending at the local level. Voters at the local level can approve tax increases, increases in bond indebtedness and increases in local government budgets above the allowed growth formula, via referenda.
In the course of researching the impact of Colorado's Taxpayer's Bill of Rights amendment, I gathered data on how voters in such local referenda have responded to requests by their local governments to spend in excess of the growth limit, or to raise taxes, or to increase local government's bond indebtedness.
What I found was that Colorado voters - who, after all, put the Taxpayers Bill of Rights Amendment into their constitution to limit the growth of taxes and spending - are at the local level like a few million Greg Mankiws. They are more likely to welcome higher taxes and higher spending at the local level.
From November 1993 through November 2004 Colorado voters at the local and county level faced more than a thousand ballot questions asking their approval for tax increases, debt increases, new taxes and permission to let the government keep and spend surplus revenue (revenue over the growth limit).
While critics of such tax and spending limitation provisions say they will starve government, anyone who believes that requiring voter approval on tax increases and higher government spending automatically means a "no" vote every time is just uninformed.
In more than a thousand such referenda, Colorado voters said "yes" to higher taxes and more spending more than half of the time.
According to the Colorado Municipal League, from November 1993-November 2004, voters approved 248 of 459 ballot questions to allow tax increases or new taxes, and rejected 211, a 54 percent approval rate for higher taxes. They also approved debt increases (bond issues) 68 percent of the time, and approved allowing government to spend surplus tax revenue, rather than rebate it to taxpayers, 88 percent of the time.
I included the data in a research report, The Case for a Real Tennessee Taxpayers Bill of Rights, published first in January 2003 and then re-published in September 2005 extensively revised with updated data. The Colorado Municipal League no longer tracks local-election results of such referenda under the state's Taxpayer's Bill of Rights, so data from the 2006 election cycle is not included. Still, that's a decade of data showing that people will accept and even actively vote for higher taxes and bigger government budgets at the local level.
Why is it that way? Mankiw described it pretty well - people like what local government buys with their money, and there's a credibility and accountability factor built in.
If you don't like how your local government spends the money, you can move. Or you can go to the local town council meeting and make your views known.
That's the genius of federalism - keeping as much of government as possible close to where the people live. I believe federalism is encoded in the American people's political DNA, waiting to be tapped into by a candidate who understands it, believes it and can communicate it in simple terms.
Is Fred Thompson that candidate? He just might be.
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