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.
Arizona Governor Janet Napolitano delivered her 2008 State of the State Address on Monday and touched on a variety of topics including education, the economy, and public safety. But in a state where revenues have decreased from a high of 20 percent growth in 2006 to about 1.5 percent growth this year, there was no serious proposal to re-energize Arizona's economy.
Arizona's recent budget history looks a lot like a rollercoaster. During years with strong economic growth, policymakers allow spending to shoot up to unsustainably high levels. Then, during economic slowdowns, when tax revenues fall off, state spending goes crashing downward.
Arizona's budget really got out of control in 2006 and 2007, when the size of state government as a portion of the state economy exceeded 6.5 percent levels of spending not seen since the early 1990s.
Republican Governor Jan Brewer's plan to raise sales taxes in Arizona is a bad idea which promises to make a bad economic situation a whole lot worse. Tax increases are a death sentence for economic growth. In difficult times, the last thing government should do is take more money out of the pockets of hard-working, productive citizens.
Government should look in the mirror
With gas prices over $3 a gallon nationwide, some policymakers, Attorney General Terry Goddard among them, suggest the solution is to implement price-gouging laws. But the government might want to take a look at the man in the mirror first.
Government has done its fair share to push gas prices higher. Local, state and federal governments tack on 37.4 cents a gallon in taxes in Arizona alone.
It takes a mighty big wheelbarrow of money to buy bread in Zimbabwe today. To make things more convenient, Zimbabwe's government has decided to issue a new currency denomination for everyday use - the Z$100 trillion note (yes, that's right, trillion). Now, Zimbabweans need the wheelbarrow for the calculator needed to handle all those extra zeroes.
When engineers need to know the precise strength of a structure, they test it by adding tiny amounts of weight to an actual example or a model. Eventually, the structure fails. That last gram of weight--the one that makes the difference between an intact structure and a pile of rubble--is pretty significant, at least to the structure.
Despite a drop in residential real estate values, Arizona was among the top ten states in new, owner-occupied housing starts in 2007.
The construction industry has recently played a disproportionate role in Arizona's economy. As shown below, the construction industry's share of Arizona's economy was 50 percent bigger than construction's share of the U.S. economy in 2006.
If incoming lawmakers are going to hear from professors and pundits that the state's budget woes were caused by tax cuts and can be solved by tax hikes, then they ought to hear what actual taxpayers have to say about it as well.
The Arizona Free Enterprise Club, a pro-growth advocacy group, yesterday launched a "No New Taxes" petition in response to a growing discussion about a possible tax increase to balance the budget.
Harry Truman once said of tough decisions, "the buck stops here." Some Arizona lawmakers, though, appear to prefer that the buck stop "over there" as they consider referring a tax increase to the ballot rather than making the call themselves.
It's understandable. They're truly in a tough spot dealing with the massive fiscal irresponsibility of the Napolitano years. Now legislators who promised not to raise taxes are wavering and would like some cover.
Fair and equitable taxation is key to economic freedom and prosperity. Rules that favor a few special interests create an un-level playing field and put other businesses at a disadvantage.
The Government Property Lease Excise Tax (GPLET) is a case in point. It allows cities to take title to land and buildings and then lease them back to a private company for a nominal fee. These businesses then pay a fraction--often one tenth--of what their property taxes would otherwise be.