Tax hike organizers hoping for light

Published 12:00 am Saturday, March 18, 2000

Mention was made in this space a week ago, not entirely in jest, that nobody may show up for next week's statewide election on a proposed increase in the corporate income tax. Further investigation confirms that is in fact the unspoken strategy of the sponsors of the amendment.

History shouts that when a tax increase is on the ballot, no matter whether it impacts on them or not, the voters turn out in droves to vote "no."

For that reason the various organizations that agreed on this hike in the corporate income tax from 5 to 6 1/2 per cent are hoping for a very light vote.

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That is why you have seen no TV commercials promoting the amendment, no bumper stickers, billboards, not an encouraging word from the governor or any other state official.

What happens if the amendment should be rejected? The state would have a serious problem. Last fall, faced with a terrible crisis in the General Fund caused by the franchise tax ruling, the legislature came up with a complex package to resolve the problem.

To comply with the U. S. Supreme Court's ruling, the franchise tax on in-state and out-of-state companies was equalized, but this alone did not make up the deficit.

The various trade associations agreed on a shares tax as a stop-gap remedy, with the understanding that it would be repealed when the corporate income tax was increased from 5 to 6 1/2 per cent.

That is what will be on the ballot next week-a hike in the corporate income tax coupled with a repeal of the shares tax, which all sides agree is very discriminatory to certain businesses.

If the voters whould reject the amendment on March 21 those businesses who agreed to this temporary shares tax will be prepared to declare World War III. They agreed to this tax for one year, but no longer.

The bottom line: Should the amendment be rejected then it will be back to the drawing board to find a plan to keep the General Fund solvent.

Hence the very quiet campaign in support of the amendment. Those who favor the proposal are whispering encouragement to their people to vote "yes" and they hope nobody else shows up.

If Gov. Siegelman should propose a bill to prohibit his remarks and conversations from being tape-recorded, you could hardly blame him.

Some weeks ago a taped telephone call relating to a judicial pay raise had the governor running for cover. Now comes a strikingly similar incident.

The names and places in this story will remain anonymous to protect the innocent, as that old line goes.

Earlier this year the governor visited a county and promised to allocate a substantial sum of money for a road project. Everybody cheered.

However, a few weeks ago the legislator from that district irked the governor by blocking one of his pet bills. Shortly thereafter the lawmaker was notified that the promised road project had been cancelled.

The lawmaker responded graciously, but then added that they had taped the remarks made by the governor promising the money.

The lawmaker said they planned to call a meeting of their constituents, serve popcorn and Cokes, and play the recorded promises on which the governor had reneged. Shortly thereafter the lawmaker was notified that the money was available for the project.

What Gov. Siegelman did in this instance is hardly new. Governors for years have used road and bridge projects to persuade legislators to vote right.

Comes to mind what Gov. Big Jim Folsom told a legislator who had voted the wrong way on one of the governor's bills: "That big splash you just heard was the bridge I promised you collapsing into the Alabama River."