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.

The lack of fiscal discipline is a natural and pervasive implication of the perceived separation between the benefits from public spending and the taxes that individuals and interest groups receive and pay, respectively. The implication is that budget preparation, decision and execution must be constrained. The challenge is that the policymakers who need to be constrained are those who must decide the constraints. Two broad classes of solutions are possible: institutions that shape the budgetary process and quantitative rules that set limits. The mounting experience with both institutions and rules is disappointing, for reasons that are often complementary. Examining the reasons for this state of affairs, this article argues that institutions and rules ought to be combined and associated with advisory fiscal councils.