Taxation: why all taxes should have sunset provisions
Or, as I’d bet is very common and taxpayers just don’t know it, you’ll have what has happened in Alabama:
The last of the more than 60,000 Confederate veterans who came home to Alabama after the Civil War died generations ago, yet residents are still paying a tax that supported the neediest among them.
Despite fire-and-brimstone opposition to taxes among many in a state that still has "Heart of Dixie" on its license plates, officials never stopped collecting a property tax that once funded the Alabama Confederate Soldiers’ Home, which closed 72 years ago. The tax now pays for Confederate Memorial Park, which sits on the same 102-acre tract where elderly veterans used to stroll.
The tax once brought in millions for Confederate pensions, but lawmakers sliced up the levy and sent money elsewhere as the men and their wives died. No one has seriously challenged the continued use of the money for a memorial to the "Lost Cause," in part because few realize it exists; one long-serving black legislator who thought the tax had been done away with said he wants to eliminate state funding for the park.
These days, 150 years after the Civil War started, officials say the old tax typically brings in more than $400,000 annually for the park, where Confederate flags flapped on a recent steamy afternoon. That’s not much compared to Alabama’s total operating budget of $1.8 billion, but it’s sufficient to give the park plenty of money to operate and even enough for investments, all at a time when other historic sites are struggling just to keep the grass cut for lack of state funding.
"It’s a beautifully maintained park. It’s one of the best because of the funding source," said Clara Nobles of the Alabama Historical Commission, which oversees Confederate Memorial Park.
Well yeah, it gets almost a half a million a year in tax money that should have ended early in the 20th century. Of course it is “beautifully maintained” and has sufficient money left over for “investments”. That’s in lieu of taxpayers investing their money for their priorities.
And I’d be willing to bet this isn’t atypical for many taxes on the books today. They are started for one thing and as that purpose winds down or ends, the money is still collected and used for other things. Essentially, when government gets its hooks into your purse for a certain amount, they’re loathe to give that up. So:
The Constitution allowed a state property tax of up to 6.5 mills, which now amounts to $39 annually on a home worth $100,000. Of that tax, 3 mills went to schools; 2.5 mills went to the operating budget; and 1 mill went to pensions for Confederate veterans and widows.
The state used the pension tax to fund the veterans home once it assumed control of the operation in 1903. The last Confederate veteran living at the home died in 1934, and its hospital was converted into apartments for widows. It closed in 1939, and the five women who lived there were moved to Montgomery.
Legislators whittled away at the Confederate tax through the decades, and millions of dollars that once went to the home and pensions now go to fund veteran services, the state welfare agency and other needs. But the park still gets 1 percent of one mill, and its budget for this year came to $542,469, which includes money carried over from previous years plus certificates of deposit.
“State welfare agency and other needs” says it all, doesn’t it? Instead of recognizing the need for the tax had ended and ending the tax, the state and its legislators continued to collect it for “other needs”.
Tax experts say they know of no other state that still collects a tax so directly connected to the Civil War, although some federal excise taxes on tobacco and alcohol first were enacted during the war to help fund the Union.
"Broadly speaking, almost all taxes have their start in a war of some sort," said Joseph J. Thorndike, director of a tax history project at Tax Analysts, a nonprofit organization that studies taxation.
And consequently, there is no thought to sunsetting it at the time and certainly none after the politicians get used to having the revenue stream.
Revenue is power – every politician knows that. The only reason this is coming to light and being exposed is because a black politician has become aware of it and the Confederacy is a politically unpopular issue. Otherwise, the hogs at the trough wouldn’t be saying a word.