Tax Reform

Americans are a hard-working bunch and should keep what they earn. Our ideas for tax reform reduce the burden of taxes while ensuring governments have the resources to focus on core responsibilities.

<p>Americans are a hard-working bunch and should keep what they earn. Our ideas for tax reform reduce the burden of taxes while ensuring governments have the resources to focus on core responsibilities. </p>

Gov. Janet Napolitano's "targeted tax relief" plan is targeted, indeed. It rewards a few people, on a few days and only for certain behaviors.

A quick look at your pay stub reveals how much taxes reduce your income. That big bite out of your take-home pay leaves less left over for hitting the beach in San Diego this summer, buying that new sofa or just taking the kids to a movie. There is probably a long list of things you can think of that you'd like to spend your money on this year. It's fair to say all workers would appreciate tax relief.

Arizonans paid $2.5 billion in income taxes this year, up 34 percent from last year. What will be done with the unexpected $700 million surplus? Senate Minority Leader Linda Aguirre, among others, is eager to "invest in Arizona"-in other words, let government spend it. For many Arizonans, that idea elicits a collective, "Ouch!"

PHOENIX-In a policy brief released today, Goldwater Institute senior fellow Clint Bolick argues that the Arizona Constitution should be amended to include a provision that would control government spending, known as a Taxpayer's Bill of Rights (TABOR). 

PHOENIX-A proposed amendment to the Arizona Constitution that would allow public universities to take ownership stakes in private businesses is not only unnecessary, but would undo an important constitutional protection, according to a Goldwater Institute report released today. 

PHOENIX-A Goldwater Institute report released today reveals that states across the country are losing residents en masse to neighboring states that offer lower taxes and better business climates. An analysis of U.S. Census data by Goldwater Institute senior fellow Dr. Matthew Ladner shows a strong statistical link between high taxes and population loss.

More than a year ago, Gov. Janet Napolitano appointed a Citizens Finance Review Commission to conduct a "top to bottom review of the state's revenue structure." On January 30, the commission issued a report recommending a tool box of possible reforms.

But the report was dead on arrival. Before the commission could issue firm recommendations, the governor burst the commission's bubble by stating that she would not pursue tax reform during the current legislative session.

EXECUTIVE SUMMARY

Using a statistical model the VisionEcon Dynamic Revenue Model this study estimates the economic effects of repealing the corporate and personal income taxes in Arizona. In particular, it examines three specific proposals: two Goldwater Institute proposals and a proposal by former state treasurer Carol Springer. Under all three scenarios, repealing the income tax in Arizona would generate substantial employment and personal income growth when compared to the baseline trend.

The ancient Greek physician Hippocrates wrote that the most important rule for doctors is to "do no harm" to their patients. This is also a good rule for policymakers hoping to reform the Arizona tax code. In January, Governor Napolitano convened a Citizens Finance Review Commission to find a cure for our ailing tax system. But if the commission misdiagnoses the problem, its proposed remedies could end up harming the patient in the long run.

The current proposal to fund new facilities at state universities would cost more than $800 million. Any proposal of this magnitude deserves careful and thorough examination.

In an open letter to ASU alumni, ASU President Michael Crow asserts that the plan will "ensure the future economy of the state of Arizona." A recent Arizona Republic editorial concurs, saying that the potential "economic payoff is huge." The idea is that spending today will generate millions in sales, create jobs and raise state revenue.

EXECUTIVE SUMMARY

Excess spending, not a revenue shortage, has created Arizona's mounting budget shortfall. During the 1990s, the legislature spent two of every three dollars in new revenue, and sent only one dollar in new revenue back to taxpayers. In fact, general fund spending doubled between 1990 and 2000.

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