Tax Reform

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.

<p>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. </p>

A lawsuit filed last week by the Goldwater Institute may be the beginning of the end of the counterproductive and increasingly idiotic practice of municipal tax incentives.

The Legislature has been trying to rein in the practice. But it shouldn't be up to the Legislature. The Arizona Constitution plainly prohibits such subsidies.

The institute sued to stop Phoenix from providing the tax abatement committed to CityNorth, a vast, upscale shopping complex going up at the intersection of the 101 Highway and 56th Street.

Proposition 203, "First Things First," was designed to be popular. But should it be? It strengthens government's role in the upbringing of young children, at the expense of parents. And it's funded with a regressive, unstable tax.

The $150 million tax would fund unspecified new government programs for children up to age 5. It would create a new government office, the "Arizona Early Childhood Development and Health Board," which would be appointed by the governor to oversee "regional partnership councils" which would distribute the money.

This is about taxes and the rise of the Democrats, so we expect Democrats eyes to glaze over immediately.

That's the problem; Democrats eyes glaze over every time they hear conservatives start talking about the evils of high taxation. They believe, despite overwhelming evidence to the contrary, that raising taxes increases government revenue.

Consider the state income tax.

Two candidates for governor want to abolish it. The third wants to wait on any further cuts until two recent rounds of income-tax deductions play out.

So which approach is right for Arizona? Economists differ on the long-term consequences, but most agree that killing the income tax would make it difficult in the short run to keep state government programs at their current level, as the tax produces 40 percent of the state's revenue.

Janet Napolitano ran for governor on a platform that included closing tax loopholes.

Nearly four years later, most of those loopholes remain, as well as several new ones that Napolitano signed into law.

The new tax breaks include $12.4 million in savings for state university research infrastructure projects, sales-tax exemptions for the motion-picture industry that totaled an estimated $600,000 in 2005-06, and an undetermined amount of sales-tax savings for timber-cutting businesses, according to state reports.

The late Democratic Sen. Daniel Patrick Moynihan quipped that everyone is entitled to his own opinion but not his own facts. Policymakers and pundits would do well to heed Moynihan's wisdom when they enter the fray over expanding school choice with charters, vouchers or tax credits.

Opponents of school choice regularly assert, as if it were proven fact, that choice does nothing to help students who get to choose and harms students who remain in traditional public schools.

Conservatives and some top business activists want to bring a controversial set of anti-tax laws and government spending caps to Arizona.

The National Federation of Independent Business, Goldwater Institute think tank and a group of conservative Republican state lawmakers want to import a package of anti-tax laws from Colorado.

The Taxpayers Bill of Rights, or TABOR, would limit taxes by restricting spending growth to population gains and inflation. Surplus revenue collected above those spending caps would be refunded to taxpayers or put into a rainy day fund.

So, some of our politicians want a new state law against price gouging. While I'm not arguing that consumers who paid $3.99 per gallon a couple of weeks ago to fill their tanks didn't pay a pretty penny, my guess is that those station owners will pay dearly in the weeks and months to come as motorists with long memories of that hot day in August just drive on by that particular station.

A commission appointed by Gov. Janet Napolitano is looking at tax reforms and exemptions are fast becoming the most intense point of contention between businesses and their adversaries at the State Capitol.

The Citizens Finance Review Commission is scheduled to present its recommendations to the governor in October and is receiving strong pressure to eliminate various business tax exemptions and credits. Arizona's tax code offers credits and exemptions to dozens of business activities and transactions.

One of Arizona's most prominent conservative Republicans told her colleagues Friday it's time to consider new taxes to end the state budget crisis and avoid a political trouncing by Democratic Gov. Janet Napolitano.