Monday, February 8, 2016

Arizona's Taxes Are Too High? Compared to What?

Posted By on Mon, Feb 8, 2016 at 12:30 PM

Four billion dollars more in Arizona's state coffers would go a long way. I made the radical proposal the other day that we should add a billion dollars to our education budget to take us out of 49th place in per student funding and catapult us all the way up to 46th place, tied with Tennessee. We'd move from the bottom 4 percent in the nation all the way up to the bottom 10 percent. If we had that extra four billion in our state budget, we could add that billion and still have three billion left over for other vital state needs. Better roads and bridges, anyone? More money to give defenseless children the help they sorely need?

You might ask, "Where does Arizona come up with a king's ransom like four billion dollars?" The answer according to ASU's W.P. Carey School of Business is, we'd have that in our coffers this year and every year from now on if we hadn't been cutting taxes for the past two decades
Arizonans paid 30 percent less in general-fund taxes in 2015 than they did in 1992, according to the analysis by economists Dennis Hoffman and Tom Rex.
Let's take a moment to absorb that. No, Arizonans aren't being taxed within an inch of our lives. If we kept the same tax rates we had in 1992, our overall taxes would be higher, and the state would be able to meet its obligations to its citizens and stay within its budget rather than crying poor and cutting back on vital services.

Arizonans want more money for education, and a majority of them have even said they'd be willing to pay higher taxes to help foot the bill. I'm happy to hear that, but really, the majority of Arizonans don't have to shoulder the burden to increase tax revenues. The pain shouldn't be absorbed by people who are struggling to rub a nickel and a dime together. Our corporate income tax is low, 34th in the nation, and the Republican legislature voted to lower it further. Meanwhile, our regressive sales taxes are high. The rich pay a third of what the poor pay in state and local taxes as a percentage of their incomes. Those who are paying the least are those who can best afford it. They need to pay their fair share.

Does it sound like I'm waging class warfare here? Hardly. The weaponry is in the hands of those who benefit most from our increasing income inequality and from lower tax rates on the wealthy. They have the personal connections and the lobbyists. They have the money to reward office holders with large campaign contributions, direct contributions made in the light of day and hidden contributions made in the "dark money" of night. While they can give their families everything they need even as the state cuts back on spending, people who depend on government services—like public education and services for children, to name two things that are shamefully underfunded in Arizona—are being hurt, badly.

In the last Republican debate, Donald Trump said, "Right now, we're the highest taxed country in the world." I'm sure plenty of listeners shook their heads in sad agreement, and no one who shared the stage with Trump dared to disagree. But anyone who knows the numbers understands the whole crew of Republican presidential candidates are wrong on taxes. An AP fact check of the debates confirms what we already know, that our taxes are low compared to other countries with similar economic standing. And here in Arizona, we're not even paying anywhere near the highest taxes we've paid in the past few decades. 

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