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Antenori Radio Ad

October 24, 2012 by 1 Comment

Senator Frank Antenori has been serving Arizona in the State Legislature with the same distinction he served you in the U.S. Army Green Berets.

Now David “Tax Man” Bradley wants you to fire Antenori and put him back in the Az Senate.

You remember Bradley, he is the guy who wants to raise property taxes and sales taxes for folks on fixed incomes, the gas tax, the soda tax, the beer tax, the wine tax, and even a tax on hair cuts.  You name it, Bradley wants to tax it.  He’s the guy who voted to spend $3,000,000,000.00 we didn’t have nearly bankrupting the state.

Bradley says Frank is angry!?.   Well, when you see the mess Bradley and his cronies have made and the damage that they’ve done to our economy you should be angry.

It’s people like David Bradley who created and sustained this mess.   It’s folks like you who elect the Frank Antenori’s of the world to clean it up.

Now “Tax Man” Bradley is mailing literature with a picture of himself with Barry Goldwater Jr.  The Goldwater Institute gave Bradley a grade of F and he was one of the  “The 10 Lowest Scoring Legislators in 2010″.

Don’t let David Bradley and his cronies distract you, it’s about jobs not personalities.

“You Should Be Angry”

 

Filed Under: Campaigns & Elections, Conservatives, Economics, Taxation

Proposition 204 Could Cost Arizona’s Private Sector 15,000 New Jobs

October 24, 2012 by Leave a Comment

By Stephen Slivinski, Goldwater Institute

The supporters of making the temporary 1-cent sales tax increase permanent – which is what the passage of Proposition 204 would do – claim that what they are proposing isn’t a tax hike, it’s simply an extension of an existing tax.

The permanency of Proposition 204 would only be so innocuous if you assumed that nobody changed their behavior on the expectation that the tax would go down. But businesses have to make decisions today based on assumptions about the future. If they believed that the sales tax rate would go down in 2013, as current law states, we can assume they would have made long-term business plans and hiring decisions based on that.

Economic models make predictions about future growth based on these sorts of assumptions, too. Ample empirical evidence already supports the conclusion that rising tax burdens can shrink employment growth. As such, an unexpected tax increase – which is the best way to describe Proposition 204’s halting of an expected tax cut – should be expected to dampen job growth.

The State Tax Analysis Modeling Program developed for the Goldwater Institute by economists at the Beacon Hill Institute based at Suffolk University in Massachusetts, integrates just those sorts of assumptions. The model is based on historical data on how tax burdens have changed economic patterns in Arizona. When you take into account the unexpected $1 billion tax load that would exist as a result of Proposition 204, you discover that overall private employment growth could be lower by at least 15,000 jobs each year than it otherwise would be as a result of the higher and newly-permanent sales tax rate.

There will be job growth as a result of Prop 204, but likely only at the construction firms that receive government contracts as a result of the tax hike and the education bureaucracy. The state would be better off with 15,000 jobs created across all parts of the economy than more jobs created that are dependent on the growth of government.

Stephen Slivinski is a senior economist with the Goldwater Institute.

Learn More:

Goldwater Institute: Proposition 204 – Not as Advertised

Goldwater Institute: The Construction Industry Actually is “Doing Just Fine”

Goldwater Institute: Arizona’s Secret Growth Industry

Filed Under: Arizona Politics, Ballot Measures, Economics, Taxation Tagged With:

Lessons from Texas on Building an Economically Healthier Arizona

October 17, 2012 by 2 Comments

By Byron Schlomach, Ph.D., Goldwater Institute

During the recent recession, the experience of Texas provides a marked contrast to that of Arizona. Arizona’s gross domestic product (GDP) fell at more than double the rate in the nation while Texas’s GDP barely fell at all. Texas’s employment in 2011 was at an all-time high and even greater than in 2007; by contrast, Arizona’s total employment in 2011 was 10 percent below its peak. Although most of the nation has seen hard times like Arizona has since 2007, Arizona’s economic challenges did not begin with the Great Recession. In fact, Arizona’s inflation-adjusted per capita income has lagged the nation’s for decades and stands steady at around 87 percent of the national level. While Arizona’s per capita personal income growth was fifth lowest among the states, Texas’s was seventh highest despite a large influx of people without jobs.

Arizona performs poorly because it taxes and regulates as if it were a state with natural advantages that can absorb bad public policy. In a comparison of several economic policy indexes between Arizona and its six neighbor states, Arizona outranks only California and New Mexico. These policy indexes include measures of economic freedom, business friendliness, tax systems and burdens, and cost of living. Texas ranks first in one measure, ranks second in two measures, and receives eight top-10 rankings.

Although many think oil and gas are the secret of Texas’s success, energy production is half the relative size of Texas’s economy now compared to what it was in the 1980s. The real secret is Texas’s policies. Those policies include no personal income tax, relatively low business taxes, a mostly simple tax structure that is fairly easy to enforce and comply with, gentle regulation that allows its natural advantages to be exploited, and private ownership of most of the state’s land.

Arizona has its advantages, including mineral wealth, balmy winters, stable geology, an outsized allocation from the Colorado River, and an advantageous state constitution that protects individual property rights and liberties. Arizona’s natural disadvantages are significant and very costly, though. They include lack of access to a water port, remoteness from the majority of Americans who live near and east of the Mississippi River, relatively limited labor and energy resources, and geological features that are visually stunning but topography that presents a surface transportation nightmare. Lawmakers need to take these issues into account when formulating policy and not add costs in a state that is already at some cost disadvantages.

The experience of Texas shows that Arizona can best exploit its comparative advantages with lean, unobtrusive government. The state should adopt Texas-style policies that (1) lower taxes and keep them low; (2) simplify the tax system, especially sales taxes and property taxes; (3) restructure the tax system to eliminate income taxes; (4) reduce business property taxes; (5) reduce regulations such as licensing, land use planning, and zoning; (6) sell state trusts, increasing the stock of private land; and (7) reduce the size of government and end state revenue sharing with local government.

Read “Lessons from Texas on Building an Economically Healthier Arizona” 

Filed Under: Arizona Politics, Economic Development, Economics, Government Reform, State Budget, State Economy, State Government, Taxation

The Hidden Cost of the Income Tax

September 26, 2012 by 3 Comments

By Stephen Slivinski, Goldwater Institute

Decades of experience have shown us that high taxes dampen economic growth. State policymakers hoping to encourage job growth are right to worry about their state’s tax load on the private sector.

What needs more attention than it gets now is what a state taxes. As it turns out, most states actually rely on the very tax that slows job growth the most: the income tax.

Most states, for instance, assess higher income tax rates on those with higher incomes. Not only does that penalize those who are most successful in the private sector, it inhibits job growth by making small businesses – which are typically the creators of the largest share of jobs in most states and pay their income taxes through the personal income tax code – pay higher taxes the more they grow.

States with graduated-rate income taxes, like Arizona, also tend to see government revenues grow faster than personal incomes and that means the government gets richer faster than the private sector. That’s always bad for long-term economic growth.

The best way out of the trap is to eliminate the tax that is the most damaging to economic growth. Eliminating the income tax in Arizona could not only remedy these problems but also help launch the state into the ranks of the economic powerhouses like Texas. This policy change could still create more than 20,000 new jobs in the first year because it gets rid of the hidden economic costs associated with an income tax.

Every state has natural advantages and disadvantages that policymakers cannot control. But they can control tax policy. Getting rid of the income tax is the only policy bold enough to fundamentally boost long-term economic growth in Arizona.

Stephen Slivinski is a senior economist at the Goldwater Institute.

Learn more:

Goldwater Institute: A New Tax Plan for a New Economy: How Eliminating the Income Tax Can Create Jobs

Cato Institute: State Income Taxes and Economic Growth

National Taxpayers Union Foundation: The Economic Impact of the Adoption of a State Income Tax in New Hampshire

Filed Under: Economic Development, Economics, Jobs/Labor, State Budget, State Economy, State Government, Taxation

Eliminating Arizona’s Income Tax Could Create 20,000 New Jobs in First Year

September 20, 2012 by 1 Comment

Phoenix, AZ—Eliminating Arizona’s state income tax could put 20,000 people to work in the first year alone and business activity in the state could rise by an additional $419 million each year, finds a new Goldwater Institute policy report released Thursday.

And Arizonans would have more money in their pockets to save, spend or invest.

In A New Tax Plan for a New Economy: How Eliminating the Income Tax Can Create Jobs, Goldwater Institute Senior Economist Stephen Slivinski argues that the income tax makes Arizona less attractive than our neighbors when companies want to expand and create new jobs, it takes hard-earned money out of worker’s pockets, and creates instability in state revenue levels. Slivinski recommends that lawmakers eliminate the income tax outright and shift to a broad-based sales tax.

“We are falling behind neighboring states in economic recovery, and just tweaking Arizona’s tax code around the edges will not bring about the long-term job growth that we need,” said Slivinski. “Eliminating the income tax is the only proposal bold enough to dramatically boost new economic growth and drive widespread job creation.”

Slivinski argues that Arizona’s tax structure is outdated, weighing the state down and getting in the way of long-term economic and job growth. Arizona lost nearly 300,000 jobs during the recession and has an unemployment rate of 8.3 percent, among the highest in the nation.

According to Slivinski, eliminating the state income tax would make Arizona more attractive to companies who want to expand. When job-creators can keep more of their earnings to reinvest in their businesses, they are more likely to expand and hire new workers. Under this tax plan, Arizona workers will enjoy not only more opportunities to find work, they will also keep more of the money they earn.

National economic data shows that states without an income tax see substantially stronger economic growth than the national average and states with income taxes. In Texas, for example, where there is no income tax, the state gained over 400,000 new jobs between May of 2007 and May of 2012, and the state has regained all the jobs that it lost during the recession.

Besides creating jobs and letting families keep more of their paychecks, eliminating the income tax will also help stabilize the state budget. Having a budget dependent on income taxes make state revenues more vulnerable to economic ups and downs, according to Slivinski. Income taxes make up nearly half of all state revenues and they are much more volatile than sales taxes. During a boom period in the economy, as incomes spike, so too does tax revenue, which allows for large increases in government spending. But when a recession hits and incomes dive, so too do tax collections and there is a big reduction in state revenues. This was a major cause of the most recent budget deficits and sent policymakers scrambling to cover the new spending they took on during the boom period.

In his report, Slivinski shows how to eliminate the income tax, keep the sales tax at the rate it is now, and still bring in the same amount of government revenue we see today. The report also recommends reforms to maximize this tax plan’s effectiveness, including unifying the sales tax base statewide and creating a constitutional amendment to stop state and local governments from creating an income tax in the future.

“By taking steps to eliminate the income tax, Arizona will signal to job-creators around the country that we are open for business and committed to making our state competitive,” said Slivinski. “The faster a plan to eliminate the income tax is enacted, the stronger the economic boost our state will receive.”

To read Stephen Slivinski’s biography, click here.

To read the report, click here.

The Goldwater Institute protects America’s greatest inheritance—the liberty and economic freedom of the individual—by holding government accountable and standing up for regular taxpayers just like you. Lear more about the Goldwater Institute at www.goldwaterinstitute.org.

Filed Under: Arizona Politics, Economic Development, Economics, Taxation

CBO: Richard Carmona’s Healthcare Tax Will Hit Millions Of Middle-Class Families With A Massive Tax Hike

September 20, 2012 by 3 Comments

NEW NON-PARTSIAN REPORT ON OBAMACARE

CBO: Richard Carmona’s Healthcare Tax Will Hit Millions Of Middle-Class Families With A Massive Tax Hike 

WASHINGTON — Over two years ago, President Obama’s $1.76 trillion healthcare tax law was passed, which forced every Arizonan to purchase health insurance.  Now, the non-partisan Congressional Budget Office released a report on how devastating this tax is for middle-class families. Yet Democrat Richard Carmona supports the law and even called the President “brave” for pushing it.

According to the report, nearly 6 million Americans – most of whom are middle class individuals – will be forced to pay the ObamaCare tax penalty for not purchasing healthcare.  Additionally, this tax is expected to cost each individual approximately $1,200.

As the Associated Press reports:

“Nearly 6 million Americans – most of them in the middle class – will face a tax penalty for not carrying medical coverage once President Barack Obama’s health care overhaul law is fully in place, congressional budget analysts said Wednesday. … And the budget office analysis found that nearly 80 percent of those who’ll face the penalty would be making up to or less than five times the federal poverty level. Currently that would work out to $55,850 or less for an individual and $115,250 or less for a family of four.”  (Ricardo Alonso-Zaldivar, Tax Penalty To Hit Nearly 6M Uninsured People,Associated Press, 9/19/12)

Notably, the Wall Street Journal reported that ObamaCare was the largest tax increase ever on the middle class.

“This non-partisan report makes clear that Democrat Richard Carmona’s healthcare law is a massive tax on Arizona families and small businesses,”  said National Republican Senatorial Committee (NRSC) spokesman Jahan Wilcox.  “In Democrat Richard Carmona’s world, President Obama would get re-elected, we would have higher tax hikes, and an even bigger government debt.”

BACKGROUND….

CBO: ObamaCare Tax Hits Middle Class

New CBO Data Shows That 80 Percent Of Those Paying ObamaCare’s Mandate Tax Will BeFamilies Earning Less Than $123K

  • “Congressional budget analysts are now estimating that nearly 6 million Americans — most of them in the middle class — will have to pay a tax penalty for not getting health insurance once President Barack Obama’s health care law is fully in place. That’s 2 million more than a previous estimate found…”(“Tax Penalty To Hit Nearly 6M Uninsured People,” AP, 9/19/12) 

Household Income Down: ‘Middle Class Lost Ground Again Last Year’

The Washington Post: “The middle class lost ground again last year, falling to an all-time low in their share of how much income they take in, new census data released Wednesday showed.” (“Census: Middle Class Shrinks To An All-Time Low,” The Washington Post, 9/12/12) 

U.S. Census Bureau: “Real median household income in the United States in 2011 was $50,054, a 1.5 percent decline from the 2010 median and the second consecutive annual drop.” (“Income, Poverty And Health Insurance Coverage In The United States: 2011 Press Release” U.S. Census Bureau, 9/12/12) 

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Filed Under: Arizona Politics, Campaigns & Elections, Economics, Federal Budget, Health Care, Press Release, Taxation Tagged With: , , ,

Obama’s Economy, Healthcare Law Still Hammering Away at Arizona, Hispanics

September 20, 2012 by 3 Comments

Healthcare Law Penalizes Uninsured, Hispanics Twice As Likely to Lack Health Insurance

PHOENIX – When President Obama’s healthcare law goes into full effect in 2014, millions of Americans who don’t have health insurance will be forced to pay an average penalty of $1,200.  As seen in a new report from the non-partisan Congressional Budget Office released yesterday,  government officials are still measuring the impact of the healthcare law passed more than two years ago, and the news is not good.

Arizona will be especially hard-hit by Obama’s healthcare law, because not only is the unemployment rate among Hispanics already up to 10.2% — more than two points higher than the national average — the uninsured rate among Hispanics is 30%, nearly twice the national average of 16%.  Arizona’s Hispanic population is about 30% of Arizona’s 6.5 million residents.

As the Associated Press reports:

“Nearly 6 million Americans — significantly more than first estimated— will face a tax penalty under President Barack Obama’s health overhaul for not getting insurance, congressional analysts said Wednesday. Most would be in the middle class.  The new estimate amounts to an inconvenient fact for the administration, a reminder of what critics see as broken promises.  The numbers from the nonpartisan Congressional Budget Office are 50 percent higher than a previous projection by the same office in 2010, shortly after the law passed.  The earlier estimate found 4 million people would be affected in 2016, when the penalty is fully in effect.” (Ricardo Alonso-Zaldivar, Associated Press, 9/19/2012)

“President Obama and Democrats like Richard “Rubberstamp” Carmona that support this new healthcare law are ignoring Arizona’s residents, especially Hispanics,” said Arizona Republican Party spokesman Tim Sifert.  “Every day we hear bad news about either the economy or healthcare, but today it’s both — and the only good news is that we have the opportunity to stop Obama and Carmona and put Mitt Romney in the White House and Jeff Flake in the U.S. Senate.”

BACKGROUND…

Health Insurance and Hispanics

  • Uninsured rate national average among all groups is 15.7% (“Income, Poverty and Health Insurance Coverage in the United States: 2011″ United States Census Bureau, Table 7)
  • Uninsured rate among Hispanics is 30.1%, or 15.8 million people (“Income, Poverty and Health Insurance Coverage in the United States: 2011″ United States Census Bureau, Table 7)

Obama’s Healthcare Penalizes Uninsured

After accounting for those who will not be subject to the penalty tax, CBO and JCT now estimate that about 6 million people will pay a penalty because they are uninsured in 2016 (a figure that includes uninsured dependents who have the penalty paid on their behalf) and that total collections will be about $7 billion in 2016 and average about $8 billion per year over the 2017–2022 period. Those estimates differ from projections that CBO and JCT made in April 2010: About two million more uninsured people are now projected to pay the penalty each year, and collections are now expected to be about $3 billion more per year.  (“Payments of Penalties for Being Uninsured Under the Affordable Care Act,” Congressional Budget Office, 9/19/12)

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Filed Under: Arizona Politics, Campaigns & Elections, Economics, Entitlements, Federal Budget, Health Care, Latinos, Press Release Tagged With: , , ,

Sewers vs. Sports Arenas

September 19, 2012 by 1 Comment

By Stephen Slivinski, Goldwater Institute

When government issues debt, you probably think it’s paying for the construction of a highway or water and sewer improvements – the sort of things that we usually expect government to provide.

For almost a quarter of state and local government debt in Arizona, however, the bonds pay for projects that directly benefit private interests instead of the public at large. And none of this debt is subject to the constitutional debt limits, nor did voters approve much of it.

The city of Glendale, Ariz. is a prime example of what can happen when government is not bound by constitutional debt limits. Over 40 percent of Glendale’s current long-term debt load ($475 million out of just over $1.12 billion in debt) goes to finance the hockey arena, the Cardinals stadium, hotel and retail centers, and subsidies to retail giant Cabelas. Glendale has used financing methods that keep its debt outside of the debt limits in the state constitution.

Repayment of the bonds is premised on the revenue that these projects are expected to generate from, say, well-attended hockey games or highly popular retail centers. But if that revenue never materializes, as has happened often, someone else will have to pay the bonds. Taxpayers are the likely target.

One way to protect the public’s money from special debt-financed subsidies to private interests is to put an overall cap on all government debt and to subject all local debt issuance to voter approval. These steps would require elected officials to make the case to voters that a bond to give subsidies to a sports team or a big retail corporation is more important than keeping open some of their bonding capacity for things like sewer improvements or public safety. When the trade-offs are so explicit, it’s unlikely that voters will approve letting local governments abuse their power to issue debt.

Stephen Slivinski is a senior economist at the Goldwater Institute.

Learn More:

Goldwater Institute: Cutting up the Credit Cards: Seven Ideas to Reform the Culture of Debt in State and Local Government

Goldwater Institute: Debt and Taxes: Arizona Taxpayers on Hook for $66 Billion Tab Run Up by State, Local Governments

City of Glendale: Debt Management Plan

Filed Under: City Government, Debt, Economic Development, Economics Tagged With:

Passengers in the Same Cab: Free Speech and Economic Liberty

September 13, 2012 by 3 Comments

By Nick Dranias, Goldwater Institute

Last week the Arizona Supreme Court ruled in the Goldwater Institute’s favor that the First Amendment protected a tattoo business from being shut down by the City of Mesa, Arizona. The Court held that tattooing is a form of protected communication, just like painting or writing. Just as booksellers and art dealers are protected by First Amendment, so too are tattoo businesses. The decision illustrates that there is often no real distinction between economic liberty and free speech.

But that hasn’t stopped taxi regulators in New York City from trying to ban a smart phone app that hails cabs. Although the app simply allows passengers and taxi drivers to communicate with each other, regulators don’t like how the app bypasses laws that force passengers to call a service company’s dispatch center to arrange a ride. It is okay for a would-be passenger to stand in the rain on a street corner and wave their hand or whistle, but it is forbidden to sit at a table in Starbucks and press a button on a smart phone that communicates the same information directly to a taxi driver. Regulators want to stop taxi drivers and passengers from more conveniently communicating with each other—in practice, they want to ban a form of speech.

This is not just absurd regulation; like Mesa’s effort to close down a tattoo business, New York City’s action highlights the artificial divide between economic liberty and free speech that still drives much of constitutional law. In footnote 4 of a case called United States v. Carolene Products, the Supreme Court famously declared that economic liberty deserved less constitutional protection from the judiciary than so-called fundamental rights, like free speech. Most conservatives and libertarians have long denounced this decision, arguing that there is no principled way to justify treating free speech as more fundamental than economic liberty. This is because, in reality, neither right can be exercised freely without the other.

Modern technology is making this point ever more clear. Communication is increasingly the most important and dominant element of economic activity. Economic activities that previously required vast investments in physical and human capital, such as dispatched taxi service, now only need a couple of smartphones and the willingness to communicate through them.  It is becoming easier and easier to see that the regulation of most economic activities is, in substance, equally the regulation of speech—if not more so.

These trends will eventually swamp the artificial constitutional divide between free speech and economic liberty. And courts will have to decide whether to protect all forms of liberty equally. Let’s hope they follow the Arizona Supreme Court’s lead and choose to robustly protect both economic liberty and free speech, recognizing that freedom is freedom.

Nick Dranias holds the Clarence J. and Katherine P. Duncan Chair for Constitutional Government and is director of the Joseph and Dorothy Donnelly Moller Center for Constitutional Government at the Goldwater Institute.

Learn More:

New York Times: As a Taxi-Hailing App Comes to New York, Its Legality Is Questioned

U.S. Supreme Court: United States v. Carolene Products

Filed Under: Constitutional Law, Economic Development, Economics, Jobs/Labor, Regulations

Licensing Hurts

September 11, 2012 by 7 Comments

By Byron Schlomach, Ph.D., Goldwater Institute

After Hurricane Isaac blew through Louisiana, Gov. Bobby Jindal temporarily suspended licensing rules to allow EMTs to travel from other states and care for Louisianans. Similarly, after hurricanes ravaged Florida in 2004, then-Gov. Jeb Bush sought to ease licensing rules for roofers.

Professional licensing supposedly protects vulnerable people from the unscrupulous by putting government between us and those we would hire for services like plumbing and medicine. Yet, when unforeseen events like hurricanes make people even more vulnerable, authorities often ease or suspend licensing rules. These examples bear testimony to the fact that professional licensing hurts consumers of licensed professional services. When free enterprise prevails and demand rises, more individuals offer their services, even moving across states if necessary. Licensing prevents this, and leads to higher prices, lost opportunities, lives unsaved, and roofs unrepaired.

At a time when health care costs have risen faster than general inflation for decades, licensing laws prevent more people from practicing all aspects of medicine. A proposed law to allow out-of-state doctors to administer aid temporarily at a free clinic in Arizona was actively opposed by licensing advocates. Their offered “compromises” always consisted of red tape that would have prevented caring out-of-state doctors from bothering to come here.

Despite the heavy cost of licensing, every legislative session more professions seek to be licensed. Legislators should resist these efforts. Instead, if they want Arizona to be a land of opportunity, legislators should make private certification a more viable alternative to licensing and start repealing the licensing laws we already have on the books.

Dr. Byron Schlomach is the director of the Goldwater Institute’s Center for Economic Prosperity.

Learn more:

Goldwater Institute: Six Reforms to Occupational Licensing Laws

National Roofing Contractors Association: Florida roofing licensing laws complicate reroofing effort

WSLS 10: Gov. Jindal suspends EMT licensing requirements

Filed Under: Economic Development, Economics, Government Reform, Jobs/Labor

Every Arizonan Owes More than $7,500 in State Debt

August 30, 2012 by Leave a Comment

Contact: Lucy Caldwell, (602) 633-8986

FOR IMMEDIATE RELEASE: 

Phoenix, AZ—Every Arizona household’s debt is getting bigger—but most people don’t even know they owe. In Arizona, every man, woman and child owes state and local governments more than $7,500 for bills ranging from sports stadiums to parking garages.

State and local per-person long-term debt grew from $4,568 per Arizonan in 2000 to $7,587 in 2009, an increase of 66 percent in less than a decade. Arizona’s per-person debt load is almost $1,000 more than the national median of around $6,800 in per-person debt.

The $7,587 owed by every Arizonan to pay off state and local debts is in addition to the $51,000 per-American share of the mounting federal debt.

In a new report, Cutting up the Credit Cards: Seven Ideas to Reform the Culture of Debt in State and Local Government, Goldwater Institute Senior Economist Stephen Slivinski examines the vastness of the state’s debt and recommends seven key reforms to rein in Arizona’s debt culture.

“In economic times like these, most people have their hands full trying to balance their own checkbooks,” said Slivinski. “Yet our policymakers can’t restrain themselves from committing to more and more new debt that Arizona families ultimately will have to pay off.”

Although Arizona’s framers established a constitutional debt limit to cap state debt to $350,000—roughly $8 million in today’s dollars—the limit is not effective at actually limiting debt. This is because the courts have interpreted the debt limit to apply only to a specific type of debt: the “full, faith, and credit,” or general obligation debt. Politicians are able to commit current and future taxpayers to paying off a variety of debt instruments—usually called “non-guaranteed debt”—that are not subject to the constitutional limit and often do not require voter approval.

Debt-service payments were the fastest growing category in Arizona’s noncapital budget for state general expenditures in the last decade, growing 170 percent from 2002 and 2009. Almost one quarter of all state and local debts in Arizona are for projects primarily benefitting private interests, such as shopping centers or sports arenas.

For many local governments, debt payments have caused cities to cut essential services.

For example, Glendale, Arizona recently fired 49 employees, including a handful of policemen, to help cover its $35 million spending gap. The city has paid the National Hockey League $50 million over the past two years to keep the Coyotes hockey team in the city’s taxpayer-financed Jobing.com Arena, fearing that if the Coyotes move, the city will be unable to pay off the debts it owes from constructing the arena in 2002. Meanwhile, the city has had to table plans to complete the remodel of the city’s courthouse and to build a new library.

“When our elected officials commit funds to private-interest projects like sports stadiums, it doesn’t just drive up our families’ tax bills—it often means cutting the services we rely on, like law enforcement in our neighborhoods and libraries for our children,” said Slivinski.

In his paper, Slivinski recommends seven reforms to rein in Arizona’s debt, including a strict cap on debt for state and local governments, voter approval of all debt at the local level, and transparency requirements for all state and local debt.

To read the entire report, click here.

For a bio and high definition photo of Goldwater Institute Senior Economist Stephen Slivinski, click here.

The Goldwater Institute protects America’s greatest inheritance – the liberty and economic freedom of the individual – by holding government accountable and standing up for regular taxpayers just like you.

Filed Under: Arizona Politics, Debt, Economic Development, Economics, Press Release, State Budget, State Economy, State Government

NEW REPORT: “Uncertainty” Dominates the Top Five Small-Business Concerns

August 22, 2012 by Leave a Comment

Only the cost of health insurance is greater

WASHINGTON, D.C., August 22, 2012 — Small-business owners prominently rank “Uncertainty Over Economic Conditions” and “Uncertainty Over Government Actions” as their second and fourth most serious problems in the quadrennial National Federation of Independent Business (NFIB) report, Problems and Priorities. The top problem remains “Cost of Health Insurance,” which has historically been the No. 1 problem for small employers; 52 percent labeled it as “critical”. Nearly 40 percent of those surveyed said that economic uncertainty is the most critical problem, followed by 35 percent who identified “Energy Costs, Except Electricity” as critical for their firms; another 35 percent of owners named  “Uncertainty Over Government Actions” as their most critical issue.

“This year’s survey was conducted on the heels of the worst U.S. recession since the 1930s; historically high levels of unemployment and housing foreclosures, and historically low levels of consumer confidence and hiring still plague the small-business community,” said Holly Wade, senior policy analyst and survey author. “The high level of uncertainty cited by small employers helps to explain the sector’s inability to recover and expand. Fears over increasing health insurance costs continue to dominate the list of concerns for small businesses, very much in spite of the president’s health insurance reform law—certainly not an endorsement of the policy, nor a good sign for the future of the sector.”

The “Cost of Health Insurance” has been the top problem for small employers for the 25 years of the survey history. The percent of small-business owners who cite this problem as critical overshadowed the runner-up by 14 percentage points. Health-insurance costs for small firms have risen 103 percent in the last decade, an increase outpacing wages and inflation, and rendering insurance unaffordable for many small-business owners. The contention around the Patient Protection and Affordable Care Act (PPACA), commonly called “Obamacare,” has proven valid, as it has failed to address the fundamental causes of rising health-care cost while opting to focus on coverage. NFIB challenged the law in the Supreme Court of the United States, after the overwhelming majority of its membership expressed a desire to have it repealed. Without a major refocus of current thinking, the cost of health insurance will almost certainly be the most critical business problem facing small-business owners again in four years.

Uncertainty has emerged as a major hurdle to small-business recovery and growth, prompting the addition of two new problems, “Uncertainty over Economic Conditions” and “Uncertainty over Government Actions” to this year’s survey. Small-business owners ranked these two problems as the second and fourth (respectively) most severe problems facing their businesses. In the last four years, the federal government has enacted significant policy changes of an immense nature; their impact will continue as the regulatory system works to implement new policy directives. Uncertainty also surrounds pending government action on the expiring 2001 and 2003 tax cuts, the debt ceiling and the federal budget. All of these policy changes create a huge “question mark” for small-business owners, impeding their ability to make short and long-term business decisions.

Other notable survey findings include:

  • As a category, “Taxes” takes the top position as the most severe problem cluster in the 2012 survey, followed by the category “Regulations.” Five of the top 10 most severe problems are tax-related, including “Tax Complexity,” “Frequent Changes to Tax Rules and Regulations,” and “Federal and State Taxes on Business Income.” Comparatively, the most severe problem cluster in 2008 was “Costs.”
  • Regulations and financing lead the problems of increasing importance to small-business owners. “Environmental Regulations” topped the list, rising 20 positions from a rank of 47th in 2008 to 27th in 2012. “Finding Out about Regulatory Requirements” increased 13 positions from a ranking of 38th in 2008 to its current 25th position. “Obtaining Long-Term (five years or more) Business Loans” moved up 17 positions from 73rd to 56th. “Obtaining Short-Term (less than 12 months or revolving) Business Loans” follows moving 14 positions from 72nd to 58th.
  • The least severe problems identified by small-business owners include: “Exporting My Products/Services,” “Undocumented Workers,” “Access to High-Speed Internet.” Exporting, the least severe problem proves critical for three percent of small business owners, virtually unchanged from 2008. “Undocumented Workers” and “Access to High-Speed Internet” are both a critical problem for seven percent of respondents.
  • While the critical nature of some problems increased, for others, it declined, perhaps as a sign of the times. The largest decline in the ranking was “Interest Rates”, falling 30 positions from 32nd to 62nd. Also declining in importance and severity were “Finding and Keeping Skilled Employees” and “Employee Turnover”. Both fell 21 positions from 17th to 38th for the former and 51st to 72nd for the latter.

While small-business owners tended to evaluate most problems in the 2012 survey as they did in 2008, the major changes that did occur are largely related to the recession and increased regulations. The magnitude and duration of the recession significantly altered the small-business landscape along with the problems owners now face in operating their businesses. The four years between the last edition published in 2008 and the current edition saw a near collapse of the financial system and housing market, unprecedented government bailouts of the banking and automotive industries, and the enactment of massive economic stimulus programs. While the economy is over two years into its recovery, progress is painfully slow as economic headwinds and uncertainty remain. The effects of the recession and fragile economic recovery are reflected in owners’ assessment of business problems.

The findings of this publication are based on the responses of 3,856 NFIB small-business owner/members to a mail survey conducted from mid-January through April 2012. A sample of 23,000 members was drawn for a response rate of 17 percent. Owners evaluated 75 potential business problems individually and assessed their severity on a scale of “1” for a “Critical Problem” to “7” for “Not a Problem.” A mean (average) was calculated from the responses for each problem. Problems are ranked by mean score. A copy of the report is available at http://nfib.com/priorities. More information about the NFIB Small Business Research Foundation is available at http://nfib.com/research.

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NFIB is the nation’s leading small business association, with offices in Washington, D.C., and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information is available online at www.NFIB.com/newsroom.

Filed Under: Debt, Economics, Federal Budget, Government, Health Care, Polls, Press Release, Regulations, Small Business, Spending, Taxation Tagged With: ,

Richard Carmona Supporter Harry Reid Passes Massive Tax Hike

July 25, 2012 by Leave a Comment

Richard Carmona Supporter and Liberal Democrat Senate Leader Harry Reid Passes Massive Tax Hike
Would Obama’s Highest Profile Democrat in Arizona, Richard Carmona, Rather Toe His Party’s Line or Listen to Taxpayers?

PHOENIX – The Democrat tax hike proposal passed by a vote of 51 to 48 in the U.S. Senate, where Democrats hold the majority, despite warnings from business groups like the U.S. Chamber of Commerce which urged its members to oppose the tax hike legislation.

The U.S. Chamber of Commerce, and the National Federation of Independent Business, both a widely-respected authorities on policies that create a pro-business environment and more jobs, says the Democrat tax hike will undermine economic recovery and result in 710,000 fewer jobs.

“Democrat Richard Carmona joined a party that is way out of touch with job-creators, and instead is raising taxes on the same small businesses that are trying to bring about our economic recovery,” said Arizona Republican Party spokesman Tim Sifert. “Carmona has fallen in line with the liberal Democrats, and given up trying to represent Arizona taxpayers and small business owners.”

BACKGROUND …

If 2001 and 2003 tax cuts are not extended, economy will shrink

  • Increasing taxes now will undermine economic recovery, choke off job creation, and take money out of the hands of the individuals and businesses that create jobs, spur investment, boost consumption, and promote economic growth.
  • The failure to avert a tax hike would impact every facet of the American economy. Approximately a million small businesses would face increased taxes resulting in 710,000 fewer jobs, 1.8 percent lower wages, 2.4 percent less investment, and a 1.3 percent smaller economy. Retirees and those saving for retirement would be hurt by increased investment tax rates. Businesses would have less money to invest in and create jobs as an increased estate tax rate and lower exemption amount would impose significant costs.
  • The Chamber has long urged Congress and the Administration to swiftly enact legislation that appropriately addresses America’s impending fiscal cliff. Extending all of the 2001 and 2003 rates, such as in the McConnell-Hatch alternative, would be a strong first step, but more work remains. Congress must extend all of the expired and expiring tax business tax provisions, and must act expediently to find spending cuts to replace a sequestration never intended to go into effect. (“Letter to Congress,” R. Bruce Josten, U.S. Chamber of Commerce, 7/24/2012)

The Democrat Hike Will Destroy Jobs and Harm the Economy

A recent Ernst & Young report shows that the Democrats’ tax increases will:

  • Hit almost one million job creators
  • Slash 710,000 jobs
  • Cut wages by nearly 2 percent

“This legislation would raise tax rates on small businesses at a particularly fragile time for the economy, stifling growth and investment when we can least afford it.” (National Federation Of Independent Business, Letter To Senators, 7/24/12)

“This tax hike disproportionately impacts small businesses… will shrink the economy by 1.3 percent and result in the loss of 710,000 jobs.” (National Federation Of Independent Business, Letter To Senators, 7/24/12)

“…the maximum estate tax rate will revert to 55 percent while the exemption level will drop to $ 1 million. This will increase the number of estates hit with the tax from 3,600 to 46,700, including 21,700 small businesses.” (National Federation Of Independent Business, Letter To Senators, 7/24/12)

Carmona Supporter Harry Reid a top liberal in the U.S. Senate

Reid: Carmona “Has A Wonderful Story,” (Shane Goldmacher, National Journal, Hotline on Call, July 12, 2012)

“Tied for first—Senate Majority Leader Harry Reid, D-Nev” (Carrie Mihalcik, “Most Liberal Members of Congress,” National Journal, February 26, 2011)

 

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Filed Under: Arizona Politics, Campaigns & Elections, Economics, Elected Officials, Federal Government, Press Release, Taxation Tagged With: , , ,

Rep. David Schweikert Introduces Amendment to Dismantle Dodd-Frank

July 25, 2012 by Leave a Comment

Washington, D.C. – Rep. David Schweikert (R-AZ), Vice Chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, introduced the Schweikert Amendment to H.R. 4078 that would halt all rule promulgation of Dodd-Frank. This amendment is the first introduced to dismantle Dodd-Frank that has seen a vote in the House of Representatives.

“Fresh off the second anniversary of Dodd-Frank, we are still waiting for the transparency, simplification, and safeguards that we were promised when this bill was introduced. Instead what we have is 2,300 pages, 400 new rule proposals, and 24,180,856 hours each year required for compliance.

“Every day, we discover new powers that unconstitutionally appointed bureaucrats and regulators have bestowed upon themselves. Dodd-Frank’s marketplace disturbances were endless then and they are endless now.

“The Schweikert Amendment is key to dismantling these suffocating, nonsensical regulations. I hope all of my colleagues realize this and support it,” said Rep. Schweikert.

BACKGROUND: This amendment will halt all outstanding promulgation of Dodd-Frank regulations by requiring costs to businesses be recognized in evaluating the bill’s “annual cost to the economy” guidelines.

By more specifically defining “annual cost to the economy,” the Schweikert Amendment will prevent the Office of Management and Budget (OMB) from ignoring real costs borne by corporations due to new rulemakings.

Most significantly, the Schweikert Amendment also ensures that preparatory costs are part of that calculation, which would include actions companies have taken to prepare themselves for Dodd-Frank rulemakings that have cost them revenues. Those costs will now be a part of the calculations for “annual cost to the economy.”

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Filed Under: Economics, Elected Officials, Government Reform, Legislation, Press Release, Regulations Tagged With: , , ,

Top Democrats Ready to Push Economy Over Fiscal Cliff and Risk a Recession, Is Ann Kirkpatrick?

July 17, 2012 by Leave a Comment

Democrats Wage Political War For Tax Increases to Feed Their Spending Addiction and 700,000 Jobs are the Casualties 

WASHINGTON — Washington Democrats have proposed their fiscal plan – to attack job creators with new tax hikes to fuel their massive government spending addiction. As Democrat leaders champion devastating tax hikes in order to grow the government even more, will Ann Kirkpatrick join their cause?

“Democrats are so addicted to spending that they’re doubling down on sky high tax increases on small businesses that could send the economy spiraling further into financial decline,” said NRCC Communications Director Paul Lindsay. “Will Ann Kirkpatrick stand up against her party’s political ploys and demand that tax hikes for small businesses be taken off the table?”

A newly-released Ernest & Young report exposed that Democrats’ proposed tax hikes will devastate the economy and cost more than 700,000 jobs. (Robert Carroll & Gerald Prante, “Long-run macroeconomic impact of increasing tax rates on high-income taxpayers in 2013,” Ernst & Young LLP, 7/17/2012)

But Senate Democrat Leader Patty Murray refuses to give up her party’s addiction to limitless spending sprees and government takeovers in favor of economic stability:

“’If we can’t get a good deal, a balanced deal that calls on the wealthy to pay their fair share, then I will absolutely continue this debate into 2013,’ Murray plans to say, according to excerpts of the speech provided to The Washington Post.” (Lori Montgomery, “Democrats threaten to go over ‘fiscal cliff’ if GOP fails to raise taxes,” Washington Post, 7/15/2012)

According to the CBO, if Washington Democrats were successful in pushing America over a fiscal cliff, the economy could fall into a recession as early as next year:

“A stalemate over how to tackle a series of fiscal deadlines at year’s end would likely push the United States economy into recession in the first half of next year, the Congressional Budget Office warned on Tuesday. A wave of U.S. tax hikes and automatic spending cuts – dubbed the “fiscal cliff” – are set to take effect in January unless Congress and the White House agree on ways to delay or revise at least some of them.” (“’Fiscal cliff’ could cause U.S. recession: CBO,” Reuters, 5/23/2012)

Filed Under: Arizona Politics, Campaigns & Elections, Economics, Federal Budget, Federal Government, Liberals, Press Release, Spending, Taxation Tagged With: , , ,

More Evidence that Obama’s Recruiting of Democrat Carmona Will Haunt Arizona

July 17, 2012 by Leave a Comment

PHOENIX – On the heels of last week’s devastating 8% unemployment report, two new reports on the economy confirm President Obama’s tax hike plan and defense spending cuts will destroy even more jobs, including 50,000 in Arizona.  Democrat Richard Carmona, who was recruited to run for the U.S. Senate by Obama, would increase the power of Democrats to push these damaging tax proposals and cuts in defense industry jobs.

Ernst & Young released a study today showing unemployment would increase by .5 percent – meaning roughly 710,000 fewer jobs nationally – if the president’s small business tax hike is imposed.  And new research prepared for the Aerospace Industries Association predicts a loss of 1.1 million jobs nationwide if defense spending cuts go into effect.

“At a time when our country is so desperate for economic recovery, President Obama and his Democrat friends like Richard Carmona are raising taxes and hurting job creators,” said Tim Sifert, spokesman for the Arizona Republican Party.  “Carmona and his liberal Democrat pals are once again showing how ineffective they are in encouraging job growth and a strong economy.”

BACKGROUND …

Democrat tax hikes will cost 710,000 jobs:

* Output in the long-run would fall by 1.3%, or $200 billion, in today’s economy.
* Employment in the long-run would fall by 0.5% or, roughly 710,000 fewer jobs, in today’s economy.
* Capital stock and investment in the long-run would fall by 1.4% and 2.4%, respectively.
* Real after-tax wages would fall by 1.8%, reflecting a decline in workers’ living standards (“Long-run macroeconomic impact of increasing tax rates on high-income taxpayers in 2013” Ernst & Young, July 2012)
Defense Cuts will kill 50,000 Arizona Jobs:
“Arizona: 49,189 Total Job Losses,” (Stephen Fuller, George Mason University, “State Employment Impacts of the Budget Control Act of 2011, Table 3.”) 

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Filed Under: Arizona Politics, Campaigns & Elections, Economics, Jobs/Labor, Press Release Tagged With: , , , ,

New Study: Higher Tax Rates Will Hurt Economy, Small Businesses

July 17, 2012 by Leave a Comment

WASHINGTON, D.C., July 17, 2012 —New research, released today by the National Federation of Independent Business, shows that allowing tax relief on the top individual rates to expire will hurt job creation and the economy. The report, published by top accounting firm Ernst & Young, shows raising top individual rates would hurt small-business job creators in particular.

“This report clearly shows that raising taxes on job creators will have a negative impact,” said NFIB President and CEO Dan Danner. “It is absolutely the wrong time to hike taxes on millions of business owners. On top of that, the threat that small businesses could get pushed over the Fiscal Cliff in order to push through this tax increase is creating an immeasurable amount of uncertainty among small businesses trying to plan for the future.”

Link: Long-run macroeconomic impact of increasing tax rates on high income taxpayers in 2013

The study, authored by Dr. Robert Carroll and Gerald Prante, estimated the effects of the policy advocated by President Obama and some Members of Congress to allow the top tax rates paid by small-business owners to rise sharply starting January 1, 2013. It finds that over time the economy would be 1.3 percent smaller and there would be 710,000 fewer jobs. More than 72 percent of S corporation income is earned by the half-million S corporation owners who pay the top two rates.

Increasing individual rates directly impacts small businesses organized as S corporations, partnerships, LLCs and sole proprietors, also known as “pass-through” businesses. NFIB research shows around 75 percent of all small businesses are organized in such a manner.

Together with the new 3.8 percent tax on investment income introduced in the health care reform law, the study finds that the top tax rate on pass-through business income would skyrocket from 35 to nearly 45 percent.

The study was commissioned by NFIB in partnership with the S Corporation Association, the U.S. Chamber of Commerce, and the Independent Community Bankers Association.

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NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information is available online at www.NFIB.com/newsroom.

Filed Under: Economics, Press Release, Small Business, Taxation Tagged With: , , , , , , , , ,
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