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>

This year, Arizona policymakers have a chance to do something that no other state with an income tax has done: eliminate the tax on capital gains.

Somebody hit the panic button too quickly at the Arizona Republic. A couple of weeks ago, its editorial board declared plans for a Regulatory Tax Credit would result in “regulatory Armageddon.”

It’s like a bad re-run. A few legislators are trying to revive Arizona’s film production tax credit (SB 1170) that lapsed in 2011.

Part one of Ayn Rand’s Atlas Shrugged ends in despair, as the oil fields of entrepreneur Ellis Wyatt burst into flames. Wyatt Oil, once a successful business that created jobs and launched an economic Renaissance in the western United States, had fallen victim to stifling taxes and government regulation. No longer willing to surrender to bureaucrats, Wyatt abandons his once-thriving business.

An important driver of job growth is investment. Without investment, new businesses may not flourish or even see the light of day. And venture capital investment in technology start-ups is one of the highest-profile sources of new business births.

Recent polling shows that Americans’ number one concern about the economy is unemployment and the future of job growth. With Arizona’s unemployment rate at 9%, the need to set the stage for private sector growth is critical and job number one for policymakers.
 

At least one Arizona city understands that the key to economic growth is more freedom and lower costs levied on businesses.

Tuesday's Wall Street Journal editorial page engaged in a bit of triumphalism. The editors showed that their 2003 predictions of where monetary policy was leading were better than those of Ben Bernanke. Bernanke's comments at a 2003 meeting of the Board of Governors make clear that lots of detailed knowledge can just as easily addle a brain as create clear thinking.

Whether proposed by Republicans or Democrats, tax increases cost jobs. And some taxes are even worse for employment than others. That's what a recent economic analysis of Arizona's proposed tax increases by the Beacon Hill Institute demonstrates.

A $1 billion sales tax increase would cost Arizona 14,400 private jobs. A $1 billion state income tax increase would cost even more jobs, about 26,000. 

No later than June 30, Arizona's legislature and Governor Brewer have to agree on a budget for fiscal 2010 or the state government will shut down.