Tax Analysts Blog

Who Decides?

Posted on Nov 8, 2016

Suppose a country’s leaders asked citizens to vote on how to achieve a complex policy goal -- for example, how to make the country’s tax system fairer, or how to reform the immigration system or entitlement programs. And because it is difficult to incorporate nuance into this kind of question, suppose the leaders were able to draft a ballot referendum that posed a binary choice: yes or no, up or down. And then, just for good measure, suppose the leaders told the public that they would honor the results of the referendum.

This all sounds pretty reasonable. But what happens when advocates for one side or the other distort the facts? What happens when well-funded or highly motivated advocates – the same sorts of interests that prompted the U.S. initiative and referendum reforms of the early 20th century – overwhelm the system? What happens when the vaunted marketplace of ideas is hijacked, and citizens have access only to “facts” sponsored by one side or the other? What happens when one group seeks to achieve its goal at the direct expense of another group?

California provides perhaps the best example of a referendum system run amok. The state ballot is annually littered with all sorts of proposals – some well-meaning, others self-serving – which require citizens to make myriad fundamental public policy decisions in the voting booth. Some throw up their hands in frustration and decide not to vote, while others cast their vote aided only by simple slogans, or a skewed universe of facts and analysis.

Sometimes the people make wise decisions, and sometimes they don’t. An example of the latter category is the 2008 ballot initiative Proposition 8, in which a majority of those voting on the issue (but a minority of citizens) voted to take away the right to same-sex marriage, a right recognized by the California Supreme Court just six months earlier.

Earlier this year the United Kingdom had a similar experience with direct democracy, when voters narrowly decided to leave the EU. As in California, citizens were bombarded before the vote with conflicting claims about how Brexit might affect immigration, taxes, trade, the economy, and the right of British subjects to move freely within Europe. They were presented with a binary choice: leave or remain. And elected leaders promised to honor the voters’ decision, costing Prime Minister David Cameron his political career when his remain side lost the referendum.

For all their differences, the United States (including California) and the United Kingdom share the notion that the structure of government includes a higher power, an authority that can nullify voters’ decisions when larger considerations demand it. In both nations, that higher power is the national constitution and the judges who are sworn to interpret and uphold it.

No one should be surprised, therefore, that the London High Court ruled that Parliament, not the British electorate, has the final say about whether the U.K. should leave the EU, particularly when the decision would deprive Britons of rights granted by Parliament.

Thus Parliament, as representatives of all the British people, will ponder, debate, and decide whether to leave the EU. In making its decision, Parliament will consider tax policy issues concerning the EU’s coordinated VAT regime and its proposed adoption of a common consolidated corporate tax base, as well as how a decision to leave or remain in the EU will affect the U.K.’s ability to use tax policy to encourage business investment.

These issues are best left to the legislature – not to the people. As my late Father often said, “truth is not always determined by a show of hands.” 

Read Comments (10)

Mike55Nov 8, 2016

The London High Court referenced the Brexit referendum only briefly, solely to clarify it had nothing whatsoever to do with the case at hand. Your characterization of the case as deciding the balance of power between the British electorate and Parliament is inaccurate.

And thank goodness for that. Statements such as "these issues are best left to the legislature – not to the people" reflect the sort of paternalistic attitude Brexiters are rebelling against. In a constitutional democracy the legislature exists to SERVE the will of the people, not to REPLACE the will of the people with their own, theoretically more learned views.

As an aside: the ultimate irony here is that the result of this case might eventually require review by... the EU Court of Justice! If anyone was struggling to understand why many in Britain feel their nation's sovereignty has been eroded, there is you clear-as-day example.

JusticeTwoNov 8, 2016

It is odd that you defend the rights of a bare majority of the British electorate to take away individual rights that their elected government, through Parliament, has granted to British subjects. That was, in fact, the point on which the High Court relied to rule that only Parliament, not the voters, can deprive the citizens of rights which Parliament has granted them. While the majority's views should be respected, their rights should not come at the expense of the rights of others.

Jefferson said it best: "All, too, will bear in mind this sacred principle, that though the will of the majority is in all cases to prevail, that will to be rightful must be reasonable; that the minority possess their equal rights, which equal law must protect, and to violate would be oppression." The British conservative Edmund
Burke essentially echoed those views in his speech to the Elders of Bristol upon his election to Parliament in 1774.

Mike55Nov 8, 2016

You've simply misread the court's decision. The easiest place to see this is paragraph #105, where the court makes it very clear it is NOT ruling on the ability of UK voters to deprive their fellow citizens of rights granted by Parliament.

Edmund DantesNov 8, 2016

The political elites are all in favor of democracy until they lose a referendum or election. Then suddenly the voters are the great unwashed, too stupid to be able to decide "correctly."

The people who cared about this issue came out to vote. Those who didn't care failed to show up. The majority ought to rule. Otherwise, stop pretending you have a democracy.

California's experiment with direct policymaking worked very well indeed with Proposition 13.

Justice TwoNov 9, 2016

I am curious about what makes someone an "elite." Is it that they are educated? That they study the issues, weigh the evidence, and draw a reasoned conclusion? Is it that they can articulate their views in a thoughtful way? Are people "elites" because they have a college or professional degree, or because they have dedicated their adult lives to study and learn about particular subjects or issues? Or are people "elites" because they have money, own property, or have influential connections? Was Harry Truman an "elite" because he was articulate and well-read, even though he lacked a college degree? Is Chuck Todd a “media elite? How about Bill O’Reilly? And if Todd is but O’Reilly isn’t, what distinguishes them?

I submit that leveling the "elite" criticism is an ad hominem attack that instantly discounts another person's views without taking the time or trouble to understand and rebut them through facts and reasoning.

Finally, contrary to much popular belief, the U.S. does not have a democracy but, in the words of John Adams, a "representative republican form of government."

Mike55Nov 9, 2016

My understanding is that "political elite" is a derogative term used by the right to describe politicians who dismiss the opinions/concerns of a large portion of the populace on the grounds that those views must be based upon a lack of information, poor education, low IQ, hatred for some group, or all of the above. While the term is typically reserved for the left, it is occasionally applied as a means to insult/defeat moderate republicans as well (see e.g., Jeb Bush).

Moderates prefer to call this type of politician "technocrats." It's of course understood that "technocrat" is inaccurate, but the term successfully gets the concept across in a somewhat less divisive way, and is broadly understood when used in the proper context.

For what it's worth, my own preferred term is "paternalistic." I think that's the most accurate way to describe the "technocrats" of BOTH parties.

Christopher FranksNov 12, 2016

JusticeTwo asks an interesting question - what is the 'elite'? From a UK perspective, I would say that it's a mindset - one that thinks that all intelligent and decent people must inevitably hold certain views about certain issues. It follows that anyone who holds different views on those issues, or merely moots the possibility that there is a legitimate alternative view, is, by definition, not only wrong, but also stupid and wicked. It further follows that it is not necessary to engage with those who hold different views on those issues. They can be simply be treated with sanctimonious disdain, and ignored. It's a mindset that is so closed that it's taken completely aback by a popular vote that produces an outcome that it has always considered risibly non-progressive and therefore impossible. It's a mindset that is so illiberal that it then seeks to thwart that outcome - which it dismisses as the product of the uneducated, grubby masses - even though, if the boot had been on the other foot, it would, quite rightly, have denounced such efforts as an undemocratic attempt to subvert the will of the people. In other words, it's a mindset that combines intellectual snobbery with self-righteous humbug. But that's only the simple-minded view of this moronic Leave voter with two university degrees.

Edmund DantesNov 9, 2016

I was using "political elites" as a synonym for "ruling class," by which I meant politicians and top government employees. Not journalists or even the well-connected rich, but I suppose you could pull them into the category. Certainly "elite" can be used as as ad hominem attack, but it isn't always.

You seem to be saying that the Brexit voters were misled in some way, and therefore voted wrongly. What information were they given that was bad? Given that the dire consequences the voters were warned of have not materialized, was there actually any good information to be had?

It's possible that the Brexit vote was not motivated by the merits of the idea, but by a desire to "send a message" to the political establishment. In much the same way as the Trump victory may have more to do with the public's unhappiness with Washington DC than with his personal qualifications for leadership.

Not sure of the relevance of the U.S. form of government when we were discussing Brexit and the British voters.

BTW, now that the Republicans will run the government, can we aim the IRS at the liberals instead of the conservatives?

JusticeTwoNov 10, 2016

My blog had nothing to do with the supposed wisdom of the British electorate's decision to leave the EU (though in fairness I would have voted the other way). Hence the title, "Who Decides?". It had to do with two points:

1. Public policy (as is life) is full of nuance -- it is unreasonable to use the referendum process and its binary choice structure to craft complex public policy.

2. In a system of government that respects both the rights of the majority and the rights of individual citizens, the former should not be able to use the franchise to take away rights of the latter. And when that happens, the government system should include a "higher power" (for lack of a better term) to protect minority rights. Justice Jackson said it far more eloquently in West Virginia Board of Education v. Barnette, 319 U.S. 624 (1943), when he upheld the constitutional rights of Jehovah's Witnesses not to salute the flag and recite the Pledge of Allegiance.

If Parliament decides to leave the EU, it will do so as representatives of the entire British citizenry, upon consideration of all the nuances, policy questions, and possible unintended consequences.

As for "aiming the IRS at the liberals" (which I assume was intended as a flip comment), it will be another dark day in U.S. history when any President creates an enemies list and orders the IRS to go after the people on that list (something that Nixon absolutely did, and Obama absolutely did not do).

Christopher FranksNov 10, 2016

When the triggering of Article 50 comes before Parliament (assuming that the Supreme Court doesn't reverse the High Court's judgment), it is extraordinarily unlikely that the House of Commons will vote to block the UK's departure from the EU. Since the High Court's decision, it has become quite plain (if it wasn't already) that only the 56 Scottish Nationalist MPs and a pretty small number of other Remain ultras will vote against the principle of Brexit. The great majority of Remain MPs in England and Wales will acquiesce in the triggering of Article 50 because, outside London, nearly all them represent constituencies where the majority voted Leave. In short, it would be political suicide for them to vote against Brexit, whatever their own views.

If the principle of Brexit is seriously questioned in Parliament, the challenge will come not from the representatives of the the people in the House of Commons, but from the unelected House of Lords - precisely because, as appointees, the Lords don't have to worry about those pesky characters called voters. Should the Lords block the triggering of Article 50, they could do so only for a year because the government could then invoke the Parliament Act, which enshrines the supremacy of the Commons, to force through the requisite legislation.

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