Brewer Plans to Attract New Business by Taxing Existing Business

Arizona Governor Jan Brewer (RINO) somehow believes that the way to attract new business growth in Arizona is by
  1. Increasing taxes on existing businesses
  2. Abandoning her promise of tax cuts for business.

Earlier this year,  Gov. Jan Brewer promoted her plan to rid the state government of its record $3.3 billion deficit.

Her five-point plan:

  • Reforming the budget process.
  • Improving Proposition 105, which mandates certain budget allocations each year.
  • Spending reductions of $1 billion.
  • Comprehensive tax reform to attract businesses and create new jobs.
  • A temporary tax increase that would generate $1 billion.

Sounds good, doesn’t it?  Well it did; That is until Jan morphed into John [Kerry that is].  She was for her tax cuts for business until she wasn’t for her tax cuts for business.

Gov. Jan Brewer says that Arizona businesses may have to wait a bit longer than 2012 for those tax cuts.  Brewer noted that her five-point plan for returning the state to prosperity, outlined in March, was built on the assumption of the temporary boost in revenues now.  Brewer said she assumes that the delay in the first part of her plan means a commensurate delay in her tax-cuts proposal.  The state’s tax structure must be revamped for that to happen, she said.  The corporate income tax is now just a hair less than 7 percent. The state needs to look at its property tax system as well, Brewer said.  That system has come under fire because companies not only pay proportionately more than homeowners, but also are taxed, annually, on the value of their equipment. That, in turn, makes the state less attractive to manufacturers.

So Arizona is not very attractive to buisness.  We already knew that. But now the story gets even better: Arizona is out of unemployment money, so they are going to borrow it from the Feds and then tax the hell out of existing Arizona business to pay it all back.
AzstarNet —Arizona needs to borrow about $600 million from the federal government or risk running out of unemployment benefits.
Without a cash infusion, the Arizona Department of Economic Security said the fund used to pay out benefits would be empty by March.
The funds would be paid back by sharply increasing company unemployment-insurance taxes.
Companies currently pay an average rate of 1.34 percent on the first $7,000 an employee makes annually or $93.80 per year.
Under the new estimates, the average rate could rise to 1.9 percent, increasing the per-employee cost to $133 per year.
Instead of this very old, very predictable Kerry-style of  gubernatorial flip-flop, Governor Brewer might at least consider following the lead of Texas. [Which is a state with a Republican governor [not a RINO] that is NOT running a deficit].

According to the Tax Foundation,

Texan’s state and local tax burdens are among the lowest in the nation, 7th lowest nationally, with state and local taxes costing $3,580 per capita, or 8.7% of resident incomes.

Texas is one of the nine states of the United States with no personal state income tax. In addition, Texas does not allow any lower level of government (counties, cities, etc.) to impose an income tax. The state sales tax is set at 6.25 percent.

As for Texas’s business tax climate, the state ranks 8th in the nation. Property taxes are exclusively collected at the local level in the state, and are generally at rates above the national average. As a whole, Texas is a “tax donor state” with Texans receiving back approximately $0.94 per every dollar of federal income taxes collected in 2005.

Desperate times call for desperate measures is the old adage.  But these desperate times call not for desperate measures but innovative ideas. Arizona is in deep weeds, no doubt.  Jan Brewer’s claim of tax reform to attract business to the state is the right thing to do and a good place to start.  But to then turn around and pull the rug out from under these tax proposals sends a bad message to any CEO out there.
Another old adage claims;  Fool me once, shame on you.  Fool me twice and I’ll take my business elsewhere.

Comments

  1. “[Which is a state with a Republican governor [not a RINO] that is NOT running a deficit].”

    Hmmm. I wonder what strategic, vitally important substance lies under Texas that Arizona doesn’t have that provides revenue even in the bleakest time…

    Oh, what’s the name…

    Sounds like “voil”, or “mohel”.

    OH THAT’S RIGHT.

  2. Oh, and about that oil thing – the fact that Alaska is running a deficit even with all the oil they have goes to show what a terrible, terrible governor Palin [not a RINO] was.

  3. FYI There are 6 states that are running in the black right now. 4 of them have republican governors, 2 democrat governors
    North Dakota R
    Montana D
    Wyoming D
    Texas R
    Alaska R
    Hawaii R
    hope that helps…

  4. I’m not willing to label Jan Brewer a RINO at this point. She did give us some great cultural legislation in her first term with the legislature. She deserves a ton of credit for that – compared to Napolitano. She has also appointed a lot of good people to head agencies

    Getting back to your point I think many fiscal conservatives think she has “lost her way” or has been “body snatched” on taxes. I’m not sure she can redeem/reconcile herself with this base of supporters. In fact, there are rumblings that some think she should resign so the GOP can move forward with a clear conservative agenda for 2010.

    I would assert that the cold hard reality of spending cuts may be setting in as our budget deficit continues to worsen. For months, I have been arguing that our only option is to bite the bullet and make the cuts and bring spending back in line with growth and inflation (credit to Tom Jenney!) The direction the economy is headed, there is no way that an 18% “temporary” sales tax hike is going to close the gap.

    Call me a dreamer or politically naïve but I still think there is time for Governor Brewer to redeem herself by returning to her fiscallly conservative ways. I’m not sure the rest of the GOP feels the same.

  5. Antifederalist says

    Brewer has no business running for governor and she should just announce that she’s NOT going to run. Even if she does a 180 on the tax issue, she’ll have no credibility. She came out of the chute sounding conservative, then asked for a tax increase. She’s trying a make-over now by shuffling key people in her admin, but unless she ACTS hard right for the remaining months of her tenure, she’s not going to have a leg to stand on. She wouldn’t have to do this make-over if she had surrounded herself with small-government conservatives and she had the wisdom to listen to their advice. In reality, she surrounded herself with the likes of Coughlin, who’s only interested in fattening his clients. Besides, even if she wins the primary, we know she’ll get creamed by Goddard. She should do the state and the party a favor and spare us from a Dim governor. Bow out, Jan. If you had ANY grace or wisdom, you’d just fade into the background.

    Untersturmfuhrer Government Butt-boy Klute,
    The oil in Texas only does their economy any good when oil prices rise. Why? The cost of American labor and government regulation. Same with copper in Arizona. We do best when copper is expensive, like now. So, no, Texas doesn’t get a pass in hard times if oil prices are low and foreigners can sell oil for cheaper.

  6. It’s time to face facts.

    Jan Brewer is a pro-life Dem. If you like, a blue dog Democrat.

    If you support her, you’re a RINO. There’s just no way around it.

    As soon as things got tough, she chucked the Republican way of doing things out the window and is resorting to the same ole Democrat mantra.

    The one positive thing about it is that the RINOs will be flushed out into the open. Essentially, if you support Brewer, you’re a RINO at best.

  7. Papatodd,

    Alaska is running a deficit, not a surplus, not even.

  8. RINOPlasty says

    Vernon Parker plans on phasing out corporate taxes in Arizona. Just sayin’

  9. RINOPlasty sounds great but how does Parker propose closing the deficit this year and next, in addition to corporate taxes. If it’s cuts, where is he going to cut? I can’t seem to find this information anywhere.

  10. ALaska would be filthy rich if the Federal Government would allow the state to use its own resources. ANWAR would have provided oil and local jobs to thousands of Alaskans, but Federal meddlers have blocked it off from development. Obama this week, just removed another chunk of Alaskan territory out of oil/gas production, so quick to cut off any attempt by ALaska to expand its oil production and thus state employment and state revenues.
    The Democrats in Washington live very comfortable lives, hot lattes on the way to work, big new highways, subways, immense climate-controlled offices, using ALaskan tax payer dollars to do so, but ALaskans who have few opportunities for employment, must hunt caribou to eat, live in frozen, isolated communities, endure in some places 24 hours of night in winter are being shackled so they can’t improve their lives.
    Washington medddling in Alaska has depressed their standard of living and doesn’t allow ALaskans, most of whom who are Native Indians, to flourish.

  11. Antifederalist says

    Listen hard and you’ll hear a potential candidate out there not only proposing cutting the corporate property tax to attract businesses, but also proposing a balanced budget by adopting an `05 or `06 budget.

    Thumbs up to Wanumba. This isn’t all of Alaska’s economic woes imposed by the federal government. The feds have so regulated mining that many mines in Alaska are now Canadian-owned and Canada, not the US has become the world leader in resource extraction. There’s a potential gold mine in Alaska, I think it’s called the Pearl Mine, that would be the largest gold strike in world history (it also contains other precious and strategic metals), but it’s tied up in red tape and the bureaucratic approval process. If we just get government out of the way, EVERYONE would have more opportunity.

  12. Here are the facts before the current meltdown.
    2007 Population, General Fund (in million) and General Fund per capita.

    North Dakota 617,600 $1,012 $1638
    Montana 954,300 $1,657 $1736
    Wyoming 520,500 $3,098 $5951
    Texas 23,881,100 $39,002 $1633
    Alaska 659,200 $4,335 $6576
    Hawaii 1,235,200 $5,381 $4356

    Arizona 6,440,900 $10,478 $1626

    Interestingly, every state but Texas receives more in federal spending than in federal taxes collected and with Texas they are just on the border. So basically they all are subsidized by states like California and Massachusetts where all those latte sipping Democrats live.

  13. ALaska doesn’t need any Federal subsidies whatsoever. All it needs is the USG to stop meddling and get out of the way.
    Norway, with a similar climate to Alaska, gets to drill and pump ALL they want, and they are ALWAYS today held up to be the MODEL to emulate. Why just today YAHOO! had a glowing headliner of how wonderful Norway is, prosperous, clean, progressive, national health care and so on. Not bad for a place that is night a quarter of the year, which is why we met so many Norweigens wintering in sunny, hot and palm-tree decorated Glendale Thunderbird School of Global Management.
    Some of my own ancestors fled Norway due to harsh environment and very low job prospects, to settle in the upper Midwest, so Norway wasn’t so wonderful not so long ago, but LO! what a difference OIL makes! AND nobody yells at THEM for distressing any polar bears.
    Not fair! How come the blonde-blue-eyed Norweigens get to pump all the oil they need to make their lives comfortable but the Native Indian ALaskans are told they can’t?

  14. Massachusetts did an expert job of picking the national pocket with the “Big Dig,” a stupendous piece of frivolous pyramid building that normally would have bankrupted the state, or in the old days, deposed the self-serving, self-aggrandising ruler, but instead was passed on to the US taxpayer to finance, even with gazillions over budget.
    Reason Mag had a good article years ago describing the Boston-obsession of the state elites. Instead of developing outside of Boston, like expanding and improving Worcester Airport, to provide an efficient air hub for beltway companies, all funds are aimed to Boston, and the claustrophobic Logan Airport, like some European nation where anything of importance must be in the capital.
    The Big Dig was all about making the harbor front more pretty by putting the freeway underground. If Boston wanted to redecorate its downtown, it was free to do so, on their own dime, if it was so important to their psyches, but they didn’t have the bucks so they got Federal pork barrel money to make their local, selfish dreams come true. It does nothing for the rest of the state.
    Massachusetts has been moribund for decades, and residents were convinced that the rest of the country was as flat as they have been. The Big Dig didn’t enhance the attractiveness of it’s business environment at all. Mass. has been losing population at a greater rate for the past ten years than any other state.
    Except, evidently this year there’s a new contender, tax champion New York.

  15. wanuba, – Alaska has $6576 in general revenue funds for each individual in the state. The government is largely supported by oil fees and corporate taxes – and could support social programs that Norway has, but this is not where the state is spending its money.

    The Big Dig is irrelevant to my point that these states like CA and MA and subsidizing the other states, it is not Alaska subsidizing them as you claim.

  16. Klute:

    Alaska’s oil fields have never been fully utilized!

    And when measures are put forth to do so, you and your compatriots will be the first to howl!

  17. Like Europeans who have zero concept as to how BIG the United States is, and embarrass themselves constantly with their lack of knowledge about the USA, the majority of Americans know squat about Alaska, especially how immense it is. If it was an independent nation, it would rank 20th in the world for land area. Anchorage is farther from Washington, DC than the Netherlands.
    What lower 48ers take for granted, roads, plumbing, heating, sunshine, malls, supermarkets, JOBS, much of Alaska does without, with a number of ALaskans living at subsistence – literally hunter-gatherer – levels, unheard of in the rest of the country.
    Like many Third World countries, it has natural resources in abundance which it cannot exploit. Unlike most Third World countries which are blocked by exploiting their natural resources by concrete problems like civil disturbances, rebel groups and so forth, Alaska is blocked by the Washington, DC BUREAUCRACY, egged on by narrow-minded special interest groups which are made up of self-important people who don’t know what it’s like to LIVE in Alaska, arguably one of the toughest places to live on the planet, bar none, a horrible, nay reprehensible, injustice to Alaskans.
    Throwing cash assistance numbers around doesn’t convey the reality of the cost of living in ALaska where the harsh climate forces people to import food items, adding high transport costs to every single household basic that everyone else can get easily around the corner for cheap. Bush flying is the life-line to Alaskan communities, due to lack of roads, and undrivability of many roads during warmer seasons.
    The overlording central government-decreed situation in ALaska resembles no other state, but more like the overlording Northern Sudan government over oil and resources-rich Southern Sudan. Northern Sudan took all the wealth of Southern Sudan and imposed draconian restrictions on eveything the Southerners did. So the capital city of Khartoum has highways, office buildings, international schools, theatres, restaurants, shopping centers, while the Southern Sudanese in a region about the size of Western Europe, had no schools, no hospitals, clinics, eletcricity, water systems and all of 6 kilometers of paved roads, of which most were booby-trapped with land-mines.
    Lovely.
    AMericans should be ashamed at how the Progressive Left has lobbied hard to condemn ALaskans to poverty. But, no, rich Hollywood was out in full force screaming and rending their expensive designer robes at then-Governor Palin for opening up a wolf cull – a measure designed to save the ALaskan PEOPLE who depend on the caribou – which were being decimated by unchecked wolf packs.
    There is absolutely no defensible reason Alaskans must stand in line, battered bowls in hand for a glob of Federal porridge when they have the natural resources and desire to manage their own lives without a cent of other states’ tax money. Norway is feted and praised and allowed to drill and pump their oil to maintain a sumptious and expensive lifestyle, but Alaska can’t. It’s worse than pathetic, it’s disgusting.
    Alaska’s situation should be a stark warning to all states. Arizona is being blocked from policing illegal immigration. It’s easy for meddlers in Washington to impose these things, it’s all academic for them; they don’t have to live with the consequences, like Phoenix duking it out with Mexico City for the crown of Kidnapping Central. California has hundreds of miles of fallow land, all piped up for irrigating, millions and millions of dollars and once producing land idle, and can’t turn on the water.
    It’s long past time to unshackle the states from Central Goevrnment Meddlers and let them prosper.

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