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Abstract
To constrain legislative taxing power, 16 U.S. state constitutions
require a supermajority in both chambers to increase or impose taxes. Both
supporters and opponents of the requirement argue that its effect fades away
because states circumvent it in various ways, especially by raising fees
that are not subject to the requirement. Existing literature, however,
offers little and inconsistent evidence on whether the effect decays over
time and whether the decay results from fee hikes. This article documents
legal cases to show the ways in which states have responded to the
requirement, estimates whether the effects of the requirement decay over
time, and tests whether states raise fees instead of taxes after adopting
such a requirement. Using state-level panel data, I find that the initial
effectiveness of the requirement on tax burden does decay approximately a
decade after enactment and that the decay is not the result of fee
increases.

AbstractMy article examines whether supermajority vote requirements (SMVR) to raise taxes in California's constitution suppresses state tax burdens. SMVR is a politically popular but contentious measure that 16 states have adopted and many other states have attempted to adopt. The rationale behind the rule is to contain the growth of government by making it costly to form a winning coalition to raise taxes. Nonetheless, the current empirical literature is mixed at best and suffers from causal inference. I take a different approach from extant literature and estimate the causal effect of SMVR on tax burdens in California by using synthetic control methods. The results show that, from 1979 to 2008, SMVR reduced the state nonproperty tax burden by an average of $1.44 per $100 of personal income, which is equivalent to 21% of the total tax burden for each year. The effect of SMVR was immediate after its adoption, but has abated over time.