All you need to know about the upcoming AZ tax debates, in one picture
It’s from the legislature, and it’s the state’s projected revenues-v.expenditures chart, three years out:
The upcoming sale tax vote will raise in the neighborhood of $900 million a year.
It’s an evil and stupid way of raising money. A sales tax is regressive and unfair. It makes the life of the poor and working people worse, and doesn’t affect middle class and rich folks at all.
But it says something about the current political climate in Arizona that it’s not even the worst menace on the horizon.
The real menace is moves by the radical anti-tax right in the legislature actually to cut taxes further, making the deficit even worse.
They say this will help the economy in the long term by creating jobs.
Coincidentally, this proposal will cut taxes for business and rich folks.
The following is from a budget analysis by Dave Wells, who teaches public policy at ASU and writes columns for the Republic occasionally. I found it through the Democratic Diva blog. HB2250 is the tax-cutting bill’s number:
HB2250 has an associated annual cost of over $900 billion when fully phased in during FY 2017 according to the Joint Legislative Budget Committee. While it is purported to be a jobs bill, it largely follows a plan of tax reductions aimed at corporations while also expanding income tax cuts to individuals. Corporate property tax assessments are slashed 25 percent and the corporate income tax rate drops nearly 30 percent, while expanding lenient sales factor rules for determining multistate corporate taxes moves to 100 percent among other changes.
Emphasis added.
In other words, even as a tax increase is on the ballot, the legislature is trying to nullify it via new tax reductions.
… with a side effect of making the state’s tax system even more regressive, by shifting the burden of the taxes away from people who have money to people who don’t.
… and icing of doing nothing to close the state’s gynormous deficit, which will soon work to futher lower the state’s credit rating (agencies don’t like institutions that aren’t doing anything to solve their problems), which will make the financial picture even more difficult.
There’s a committee hearing on the bill Monday. More details here.
Comments
b.a. Tuesday, April 13, 2010:
I don't think a sales tax is "evil" or unfair. It's much preferable to income tax as it's based not on what you earn but what you consume. Maybe someone who has 7 kids will start contributing something finally and it won't just be responsible "live within their means" people who are forced to subsidize them. One of the problems we have now is that poor people hardly pay any tax. Why would these people want less government or care how much money their government spends if they pay virtually nothing in yet reap all sorts of benefits? Let's get these people paying and then they might want to hold government programs accountable since it will actually be their money that's being spent.
Why not just cut spending to 2003 levels
and become solvent. And yes tax breaks for businesses actually bring MORE tax revenue in the long run because all those businesses that would relocate here from states with non-business friendly policies. Those companies used to come here, but now that they see we are following in the same footsteps that places like Los Angeles took in the 80's and 90's...they have been moving to Texas and places in The South. I personally think the state needs to cut spending and prove they can be fiscally competent before we reward them with more money. If they tax more, they will spend more so we will be looking at the same percentage deficit just higher overall numbers. Ask yourself why places like LA and NY can be bankrupt when they're always increasing taxes and getting more revenue? It's not about what you have and what you have not...it starts with what you can do with what you've got, to build on and improve a situation.