Time limit on new tax increases, breaks makes sense

The approach would force Congress to debate the merits and vote rather than just keep adding things.


Sunsets in nature are beautiful. Sunsets in tax policy can force supporters to provide evidence on why tax or fee increases or tax breaks merit continuation.

While the Postal Service isn’t a glowing example of how to run a business, the recent decision by the independent Postal Regulatory Commission to allow only a temporary price hike for postage might serve as a blueprint for Congress.

The commission agreed to a temporary increase in the price of postage to recover the $2.8 billion it determined the Postal Service lost due to the economic downturn between 2008 and 2001.

The commissioners ordered the agency to develop a plan to phase out the higher rates once the lost revenue is recovered. The price increase “will last just long enough to recover the loss,” said Commission Chairman Ruth Y. Goldway in an Associated Press story. It is anticipated the price increase will last two years.

Now it is entirely possible the temporary 3-cent postage increase will stay in place because inflation will have grown during the two-year period. But that will have to be proven and the commissioners will have to vote on it.

The concept of forcing a “sunset” on tax increases — or even tax breaks — isn’t a new one. But it makes more sense than the tax-and-spend and then tax-some-more-and-spend-some-more approach that comes from having a steadily increasing flow of money even if the problems the original increases or decreases were meant to address are no longer relevant. It is far easier to keep the money coming in while making a case for new increases/decreases as perceived needs arise.

Bonds and school levies work with a sunset approach. With bonds, governments put together a plan on what needs to be done and how much it will cost. If the bond is passed, only that much money is collected and spent. If the government wants to do something else, they have to go through the same process again.

School levies are similar. The districts calculate how much money they will need, show what it will be used for and set the number of years it will collect the tax. Once the final year of collection is reached, the districts have to make the case to continue the levy at the same or a higher rate.

While tossing out all the current national taxes, fees and tax breaks right now would result in chaos, we can draw a line in the sand and say that from this day forward all new taxes, fees or tax breaks will be limited to a certain time period. At the end of that period, if Congress does not vote to renew them, they come off the books.

Currently, if a tax or tax break makes it through without a sunset, it is there forever, regardless of whether it is still justifiable.

If a balanced budget amendment were also passed, it would put even more teeth into forcing our elected representatives to justify every penny they appropriate.

These changes would not eliminate the need for true tax reform, but they could bridge the gap while the work is being done. This process would also get lawmakers and the public used to the idea of living within our means.


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