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Repealing state income tax would attract new jobs

November 5, 2014

Arizona’s state constitution was modeled after the founding document of the state of Washington. Over the past century, both states have frequently looked to each other for policy ideas. In Washington’s general election last week, that state’s voters were inspired by Arizona and approved a constitutional measure requiring two-thirds of the legislature to pass any tax increase. Now, perhaps Arizona could look to Washington.

Sixty five percent of Washington voters also turned down an income tax. Championed by Bill Gates, Sr., the father of Microsoft’s founder, the income tax would have targeted only the top 1.2 percent of earners in a state that currently has no income tax at all. Washingtonians realized a tax on income is a tax on everyone’s prosperity, regardless of the details. They also saw the likelihood that the tax eventually would be extended to more and more taxpayers.

Arizona has an income tax, in addition to one of the higher sales tax rates in the country, and relatively high commercial property taxes. This is a triple-whammy for the entrepreneurs and small-business startups that create the largest number of new jobs in the United States. It’s high time Arizona took a hint from states with better economies like Texas, Wyoming and Washington. Getting rid of our income tax would put us on better footing to compete with these states for new jobs.

Dr. Byron Schlomach is director of the Goldwater Institute’s Center for Economic Prosperity.

Learn More:

Goldwater Institute: The Economic Impact of Eliminating the Income Tax in Arizona

Bloomberg: Washington State Rejects Income Tax on Wealthiest Residents

Fox Business News: States without Income Tax Grow Faster?



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