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.
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.
Governor Napolitano’s “targeted tax relief” plan is targeted indeed’"it rewards a few groups, on a few days, and only for certain behaviors.
Who will get touched by the targeted tax-cut wand this year?
Hybrid-fuel car owners stand to benefit; the better the mileage, the bigger the tax cut. But, with a sticker price well over $20,000 for most hybrids, this certainly won’t provide relief for lower income Arizonans. Nor will it help a family who needs a new minivan or a construction worker who buys a new truck.
California pulled in $71.5 billion tourist dollars, while Arizona managed "only" $10.5 billion, six times less, and ranked 17 in the nation, according to the Travel Industry Association of America's annual report. The Scottsdale Convention & Visitors Bureau has already used the report as an occasion to call for more taxpayer money to promote the state.
Arizonans paid $2.5 billion in income taxes in 2005, up 34 percent from the last year. What should the state legislature do with the unexpected $700 million? Senate Minority Leader Linda Aguirre, among others, is eager to "invest in Arizona" in other words, let government spend it.
Here's another option: Return it.
A new Arizona ballot initiative would raise taxes on a pack of cigarettes by 80 cents, making ours the fourth-highest cigarette tax in the nation. The state would use the estimated $150 million a year to pay for a variety of new children's programs. Setting aside the merits, or demerits, of the programs themselves, the funding scheme is plain unfair.
Corporate giving is up. In Arizona, Michael Jedlowski, president of Southwestern Furniture Company, will give away 10 households full of furniture to needy families. He's also donated over $500,000 to Phoenix Children's Hospital to help with its neonatal intensive care unit. And it all happened without a government program.
I couldn't have said it better myself. As my predecessor Tom Jenney, vice chairman of the Arizona Federation of Taxpayers, writes: