Abstract
To constrain legislative taxing power, 16 U.S. state constitutions require a supermajority in both chambers to increase or impose taxes. Existing studies report mixed results on the effect of the supermajority rules. In addition, it is little known how states respond to the rule and whether they circumvent them. This study documents states’ administrative and judicial responses to the rule and tests if states circumvent the rule by increasing fees instead of taxes. The analyses using a state-level panel data from 1960 to 2008 reveal that (1) supermajority rules significantly increase a tax burden instead of decrease it, (2) the tax burden significantly falls for the first six after the rule adoption, but this effect decays over time, (3) this time-variant effect is substantially small, and (4) states do not increase fees to circumvent the rules.