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>

For those concerned about Arizona's economic health, there is no more important area for agreement than low tax rates. For as Chief Justice John Marshall once said, "The power to tax involves the power to destroy."

Tax rates often play a key role in determining where individuals and businesses locate. There is a consistent migration of individuals and businesses from high tax areas (the Northeast) to lower tax areas (South and Southwest).

A few weeks ago, officials shut down Loop 202 in Mesa to film a crash scene for the upcoming movie, The Kingdom. The flaming cars were the first tangible results of Arizona's new motion picture tax incentive program which took effect this spring.

Qualifying film production companies are eligible for a corporate income tax credit equal to 10-20 percent of in-state production costs. They are also 100 percent exempt from state and county sales taxes.

Every time I fill up my Toyota Camry, I pay more than $3.00 in state gas tax. Through this tax, the state will collect over $525 million in 2007 to finance highway construction and maintenance. This year, the state will kick in an additional $245 million from the General Fund to pay for accelerated construction. Highways, in short, are not "free"ways. 

Who can forget Augustus Gloop, the robust tike whose voracious appetite led to his demise in the chocolate river. So goes one moral from this timeless story: Gluttony is bad.

Likewise with the Arizona budget. Government programs are devouring every dime in sight. Arizona state government is consuming half-again as many resources as it was ten years ago, growing almost three times faster than per capita personal income. Now, the Governor and legislature propose increasing spending by another 23 and 19 percent respectively over last year.

Arizona Free Enterprise Club responds to Mayor Gordon

Dear Mayor Gordon:

            Your comments in the Arizona Republic (May 2) about the effect of the proposed income tax cut on Phoenix's distribution of Urban Revenue Sharing (URS) are misleading.

Columbia University President Lee Bollinger kicked up a controversy by arguing for revamping the school’s graduate journalism program curriculum. Bollinger argued that the news media is a vital democratic institution and that journalists require a more rigorous academic education in order to do their job responsibly. Occasionally I read articles which make me think that folks like Bollinger are on to something.

The West is known as a low-tax, business friendly part of the country, and Arizona is no exception. But the truth is four neighboring states have lower corporate income taxes than Arizona: Colorado, Utah, Texas and Nevada.

Arizona’s nearly seven percent corporate income tax rate ranks 29th lowest in the country; which is nice, but no cause for celebration when considering our neighbors. Colorado, Utah and Texas have corporate income tax rates at five percent or lower and Nevada doesn’t have one at all.

Arizonans who pay federal income tax spend 73 days on average working for Washington. Then, they spend another 20 to 40 hours filling out tax forms. Ahh, for the good old days.

Abraham Lincoln imposed the country’s first income tax in 1862 to finance the civil war. After the tax expired numerous attempts were made to reinstate it, all of which were rebuffed. In 1895 the U.S. Supreme Court found the income tax unconstitutional. This Court decision led to the Constitution’s Sixteenth Amendment, the legalization of government directly taking income, in 1913.

Here at the Goldwater Institute a few staff members work to persuade people to voluntarily contribute to the organization. Since the Institute accepts no government funds, it relies wholly on private individuals and foundations to provide the resources to carry out its work promoting principled policy solutions to challenges facing Arizona. That's how it should be.

Giving privately to organizations and causes we believe in is a long-standing American tradition. Such is not the case with the recently passed Phoenix bond package.

Despite writers at the Arizona Republic opining that “The Symington tax cuts kept government from growing at the same pace as the state’s population,” the truth of the matter is overall state spending has increased more than 100 percent’"that’s five times population growth’"since those tax cuts.  Government is now the second largest component of Arizona’s gross product. This is hardly “lean” government.