Tax Hike to Cause 14,400 Lost Jobs as State's Economic Output Falls by $1.2 Billion

Posted on March 30, 2009 | Type: Press Release
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Phoenix--To close the state's budget deficit Governor Jan Brewer has proposed a $1 billion tax increase. New findings announced today show that if the State of Arizona were to implement a $1 billion sales tax increase, 14,400 private jobs would be lost.

These new findings are the result of economic modeling conducted by the Beacon Hill Institute at Suffolk University in Boston, Massachusetts. The Goldwater Institute asked Beacon Hill to examine the impact of a $1 billion sales tax increase on employment, state economic output, and incomes.

Beacon Hill found that a $1 billion sales tax increase would cause the state to lose 14,400 private sector jobs; the state's real economic output would decline by $1.2 billion; and Arizonans would see their total after-tax income, already hit hard by recession, fall by $760 million, or almost $300 per household on average.

In addition to the $1 billion tax increase proposed by the governor, Arizona property owners face a tax increase in July when the state equalization tax comes back on the books. Lawmakers and the governor could decide to permanently repeal this tax. In the event that lawmakers choose not to repeal it, and even if it becomes the only tax increase to go into effect this year, almost 4,000 private jobs and $385 million in after-tax income will be lost.

"The Beacon Hill Institute has an excellent reputation for modeling the real effects of tax changes," said economist Dr. Byron Schlomach, Director of the Goldwater Institute's Center for Economic Prosperity. "These numbers show that these tax increases will hurt our economic recovery by putting more Arizonans out of work."
 
The Goldwater Institute is a nonprofit public policy research and litigation organization whose work is made possible by the generosity of its supporters.

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