A government that robs Peter to pay Paul, the fabled quote goes, can count on the support of Paul. Michigan Gov. Rick Snyder learned this week, though, that millions of dollars in "support" from Paul is no good if you still let Peter vote on the robbery.
Michigan voters on Tuesday rejected — by a historic 80-to-20 percent ratio — a ballot measure that would have increased their sales and gasoline taxes in order to provide more highway funding.
Drivers and shoppers were the would-be "Peters" being robbed from in this story. Michigan households would have paid an average of $475-545 more in taxes per year according to estimates by the Associated Press.
The biggest wannabe "Paul" in this story was the highway construction industry, which spent millions trying to pass the ballot measure.
Here's the money trail:
About $10 million was spent on the ballot measure according to analyses by Michigan media — almost all of it in favor of higher taxes and spending. The largest force in the election, which raised at least $8 million to spend on the campaign according to the Center for Public Integrity, was "Safe Roads Yes."
Who could be against safe roads, right? "Safe Roads Yes" was mostly a front group for the road-building industry. As of SRY's May 4 campaign filing, $5.19 million of its money came from the Michigan Infrastructure and Transportation Association. MITA is a lobby group representing Michigan Paving & Materials Company, Kaltz Excavating Co., Action Traffic Maintenance, Florence Cement Company and Cadillac Asphalt LLC.
Separately, the Michigan Concrete Association gave $148,000 to SRY, and the Asphalt Pavement Association of Michigan gave $200,000.
Of all the arguments for raising taxes for highway funding, the worst is that the concrete and asphalt suppliers, and the excavating and paving contractors, want the business. When the support for the tax and spending hikes comes mostly from the industries that would pocket the money, it ought to make observers wonder: Is this serving the public interest, or merely special interests?
The Michigan Proposal 1 story is important because it upends many myths persistent on the American Left and in the mainstream media.
First, Proposal 1 showed that Big Money is not only beatable — it's can be trounced. The pro-tax side outspent the anti-tax side by a ratio of about 30 or 40-to-1, but still suffered "the most one-sided loss ever for a proposed amendment to the state constitution of 1963" according to the Detroit Free Press.
Second, Proposal 1 undermined the common liberal trope that the push for lower taxes is the agenda of Big Money, and that higher taxes is the populist agenda.
Finally, Proposal 1's sound defeat undermined the media assumption that Big Business and Big Government working together represents a public consensus. Often, as in Michigan, a Big Business-Big Government alliance is an axis of the elites against the public. That axis of the elites often wins in the halls of Congress or state legislative chambers where the average taxpayer can't afford to send a high-priced lobbyist. But in a ballot measure, the people can beat the powerful.
This wasn't a unique situation. This was part of a pattern.
Virginia, in 2002, saw a few politically connected real estate developers pour millions into an attempt to hike taxes to pay for roads. In that fight, following the money was very instructive: The people lobbying for more lanes wanted them so they could find buyers for the houses they wanted to build in exurbs, a long drive from D.C. More highway money and more lanes wouldn't mean a faster commute — it would mean more cars and just as much congestion.
Colorado, in 1992, passed a Taxpayers' Bill of Rights, making it hard for the legislature to hike taxes. Conservatives' biggest enemy in this fight was the Denver Metro Convention and Visitor's Bureau. Big Business succeed in 2005 in paring back TABOR. In 1978, California also passed a famous ballot measure curbing property-tax hikes, again over the objection of Big Business.
The lesson of Michigan's latest tax-hike fight isn't merely a corrective for mistaken reporters buying into conventional wisdom. More important, Proposal 1 should be a lesson for Republicans going forward.
As the Washington Examiner editorial put it this week: "Michigan voters…did not just reject another tax increase. They also rejected an attempt by one small but well-moneyed set of businesses to plunder everyone else."
This points towards the way to sell limited government: When government has more power, it empowers those with connections to government. Michigan reminds us that these powerful insiders are beatable, as long as the people have a say.Timothy P. Carney, The Washington Examiner's senior political columnist, can be contacted at email@example.com. His column appears Sunday and Wednesday on washingtonexaminer.com.