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.
I recently suggested the state should abolish its income tax. So what should replace the $2.2 billion in income tax revenues that the state receives each year? The answer requires a clear understanding of the role of income taxes in our economy.
The central issue in taxation is to do the least harm while bringing in enough money to fund core government programs. Income taxes are essentially a tax on what people produce in either goods or services. Businesses and individuals are discouraged from producing more and hiring more employees to avoid paying more income taxes.
I recently proposed that Arizona abolish its income taxes and replace them with sales taxes that reach more goods and services. I received many emails from people concerned about how this change would affect families with lower incomes.
When it comes to economic policy, policymakers are increasingly looking to the two largest states in the nation as guides for what to do and what not to do. California and Texas represent nearly opposite visions for how to achieve prosperity.
Even though California is in an economic death spiral elected officials are looking for ways to tax carbon emissions, increase regulation, and they have basically refused to cut government spending. Meanwhile, Texas, with its welcoming business environment of no income tax and lighter regulation, is booming.
There are a number of excellent tax cuts in Governor Jan Brewer’s jobs bill that’s the focus of this week’s special legislative session. The corporate tax rate cut to 4.9 percent from roughly 7 percent gets us closer to being competitive with other states such as Colorado. The property tax cut finally reduces a heavy tax load that has been carried by businesses for too long.
But the bill also includes a “deal closing” fund, which uses grants of taxpayer money as an enticement to companies to relocate to Arizona. There are also tax credits for job creation.
It’s often said sequels are never as good as the original film. The same can be said of the recently-proposed multi-media tax credit (SB 1159) that is meant to replace the expired filmmaker tax credit. This sequel is a bad idea. And, in this case, the original was pretty terrible, too.
The tax credit is defended as a way to lure filmmakers to shoot their production in Arizona. Yet there’s no need to skip to the end of the screenplay to see how it ends: it’s a classic tale of corporate welfare.
233 years ago, our forefathers brought forth a new nation partly because they were fed up with taxation without representation. Today we fittingly honor those men and women for their wisdom and self-sacrifice. They did more than pledge their lives, fortunes, and sacred honor: They knew they were making a compact with generations yet unborn.
On Tuesday, the Senate barely passed a bill that would permanently repeal the County Equalization Tax (CET) on property. Unfortunately, a gubernatorial veto is very likely.
In 2006, when the state was swimming in surplus funds, the tax was suspended for three years. The CET was one of the finance streams that flowed to schools. Since then, other state money has made up the difference to schools.
The mantra of Arizona legislators this session was “jobs, jobs, jobs” — certainly an important emphasis for any policymaker. But the desire to appear to be doing something, anything, to spur job growth sometimes sucked them into legislation that will be counterproductive to long-term economic growth.
The presidential candidates are promising some pretty pricey stuff. But you and I aren't going to have to pay for it. No, the free health care, free college, subsidized mortgages, and other goodies can be paid for by repealing President Bush's tax cuts for the rich.
Tax breaks for movie producers? As John Stossel has been known to quip, "Gimme a break!"
Recently a crowd gathered in front of the state capitol to announce support for legislation that would provide tax credits for movies made in Arizona. Rising star Hunter Gomez lamented his inability to do what he enjoys here at home, declaring "This is unacceptable and shouldn't be right." His youthful charm notwithstanding, he's wrong.