Not All Tax Increases Are Off the Table for Republicans

By: - January 27, 2011 12:00 am

Like many Republicans, Iowa Governor Terry Branstad won over voters last year by promising to rein in spending and responsibly shore up his state’s finances. Unlike many Republicans, however, Branstad believes higher taxes may be part of the way forward.

On Wednesday (January 26), Branstad told transportation stakeholders in Des Moines that he is open to an increase in Iowa’s gasoline tax next year to help pay for road maintenance and other infrastructure projects. Improving the state’s infrastructure “is absolutely critical to our goal of creating 200,000 jobs and raising incomes by 25 percent and making Iowa a growing and competitive state,” Branstad said, according to the Quad-City Times , which noted that former governor Chet Culver, a Democrat, repeatedly threatened to veto any hike in the gas tax.

Branstad’s statement is a reminder that not all Republicans oppose tax hikes, and that not all tax hikes are equal in the minds of elected officials.

At least a dozen new governors — all but one of them Republicans — have refused to consider higher taxes as they set out addressing state budget shortfalls. The list includes governors in some of the nation’s most fiscally troubled states, including Nevada, New York and Ohio.

Branstad, however, never made a no-tax promise on the campaign trail, and he is being careful to characterize the gas tax as a user fee rather than a regular revenue source. “It’s not like a general tax that is imposed on people who might not get a benefit,” he said Wednesday.

Specific, targeted tax hikes such as the one being considered in Iowa may prove acceptable to Republicans elsewhere.

In Idaho, where the GOP has the governor’s office and commanding majorities in both legislative chambers, lawmakers are considering a dramatic increase in the cigarette tax to help pay for a Medicaid program aimed at reducing tobacco-related illnesses, The Associated Press reports .

While tax hikes are often portrayed as a last resort politically, more than half the states have raised taxes during the current economic downturn, including  more than $40 billion in new revenue that has been raised over the last two years alone.

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