A m e r i c a n P o s t – G a z e t t e
Distributed by C O M M O N S E N S E , in Arizona
Friday, February 3, 2012
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Maricopa County better not settle expensive lawsuits of cronies
Maricopa County manager David Smith, the hatchet man for the County Supervisors, is proposing that the county settle the million dollar lawsuits filed by the Supervisors’ cronies against Maricopa County and its taxpayers for amounts of several hundred thousand dollars up to $15 million each. This is a bad, bad idea that will end up very costly to taxpayers. The greedy county bureacrats, who are suing the county over nothing more than “stress” from being prosecuted by Sheriff Arpaio and former County Attorney Andrew Thomas, should be forced to plead their cases in a court of law, so taxpayers can see how sketchy their lawsuits are.
OBAMACARE: A Panel Discussion at the Goldwater Institute
FOR IMMEDIATE PRESS RELEASE
A Panel Discussion: OBAMACARE
Phoenix, AZ – On Wednesday, February 8, 2012, Arizona Mainstream Project (AMP) will bring to the public a panel discussion on Obamacare. Speaking on this panel will be Goldwater Institute’s Senior Attorney Diane Cohen and Director – Center for Economic Prosperity Byron Schlomach, Dr. Jeff Singer, and former AZ Congressman John Shadegg. 550 KFYI Talk Host Terry Gilberg will be the moderator for the discussion.
Each panel member will share their personal expertise and direct involvement with uncovering the facts about The Affordable Care Act and how it has begun and will continue to negatively impact the lives of ALL Americans. You will gain a better understanding of this law and how it applies to your access to health care, the current legal battles, and how you can help stop this anti-American and socialistic agenda.
Diane Cohen:
The Affordable Care Act mandated states to establish insurance exchanges by 2014 or have exchanges set up by HHS. These exchanges are nothing more than invitation-only clubs where only government sanctioned insurers can play. They must meet all the federally mandated medical coverages/benefits specified by the Secretary of Health and Human Services. In an effort to preserve some sovereignty, states, even some who opposed the federal healthcare law, including Arizona, are rushing to get federal money to set up these exchanges. Diane Cohen, Senior Attorney, of the Goldwater Institute will refute this notion. Ms. Cohen has testified before Congress on the Independent Payment Advisory Board (IPAB). She will explain what effect this fifteen-member board of political appointees will have in our future.
Dr. Byron Schlomach:
Byron will discuss how government is at the root of our problems in health care, making it the problem, not the solution. He will show you how our income tax system plays a major role in determining what our health care system looks like and how it operates.
Dr. Jeff Singer:
Dr. Singer will discuss the ways in which “Obamacare” will affect the patient doctor relationship, the relationship of the doctor with the state, the relationship of the patient with the state, the loss of personal autonomy, and the ultimate decrease in quality and rationing of heath care that will inevitably result from “Obamacare.”
John Shadegg:
President Obama promised that the cost of health care would go down and it hasn’t. A recent HHS press release acknowledged that premiums have gone up by as much as 12.8% in the last year after the rates were reviewed by state bureaucrats under the provisions of Obamacare. Obama has also promised that if you liked your health care plan, you could keep it. Yet, we now know that Obamacare mandates will not allow anyone to keep the plan they had. As the nation’s economy struggles, Obamacare increases taxes by 800 billion dollars and crushes jobs. Learn how free market solutions will reform health care in ways that promotes quality and reduces costs for all Americans.
Date: Wednesday, February 8, 2012
Location: Goldwater Institute Auditorium
Address: 500 E. Coronado Road, Phoenix, AZ
Time: 6:00 pm – 8:30 pm (doors open at 5:30)
Light snacks and beverages will be served
Cost: $10.00 per person
To reserve your seat we encourage you to RSVP and purchase tickets in advance
Go to: http://www.arizonamainstreamproject.org/#q=Seminars-18
or send payment to:
Arizona Mainstream Project
15029 N. Thompson Peak Parkway
Suite B-111 Box 589
Scottsdale, AZ 85260
This panel discussion will be STREAMED LIVE from AMP’s website.
A “Live Stream” button will be available on our homepage www.ArizonaMainstreamProject.org on the day of the event. Follow the instructions to access the live video stream.
Contact: Honey Marques, Executive Director, at 808-283-3661 or honey@arizonamainstreamproject.org
Arizona Mainstream Project is a 501 (c) 3 non-profit charitable grassroots organization whose mission is to attract, educate, and mobilize the people of Arizona around America’s founding principles and leadership. AMP believes in the principles of a constitutionally limited government, free markets, fiscal responsibility, and individual liberty to promote the common good and prosperity for the people of Arizona.
Eliminating state capital gains tax could spark an entrepreneurial surge
By Stephen Slivinski
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.
Tax policy can either obstruct the new capital that businesses need or it can step out of the way and allow thousands of flowers to bloom. A number of studies have shown that taxes on capital gains – the return an entrepreneur or investor receives on their investment – have been shown to be a barrier to entrepreneurship and the job growth it creates.
Capital flows where it can find high returns and low barriers to allocation, and businesses in states with lower capital gains taxes receive more investment than their higher-tax counterparts. A 1998 study by Harvard University professors Paul Gompers and Josh Lerner concluded that entrepreneurial activity is sensitive to the taxation of capital gains. In particular, the authors found that a reduction in capital gains taxes is associated with an increase in venture capital funding in a state.
A 2010 study by William Gentry of Williams College came to the same conclusion. His paper noted that “capital gains taxes could distort a number of important decisions of entrepreneurs. These decisions include starting a new business, expanding the business, and obtaining outside financing; the capital gains tax can also affect whether and when an entrepreneur sells his or her business.”
Arizona, like most states with an income tax, treats capital gains as “normal” income and taxes it at the same rate as all other income. But nine states, including New Mexico, tax investment at a lower rate than their standard income tax.
In the material released after the State of the State speech, Governor Brewer indicated she understands that Arizona needs to lower its tax barriers to capital investment – an important step. But the governor and legislature should go further and eliminate the tax on capital gains altogether.
Arizona can be the first state with an income tax to do that and could, as a consequence, end up being a hub for new venture capital activity.
Stephen Slivinski is a Senior Economist with the Goldwater Institute.
Learn more:
American Council for Capital Formation: Capital Gains Taxation and Entrepreneurship
Harvard University: What Drives Venture Capital Fundraising? (PDF)
American Action Forum: Employment Effects of Reducing Capital Gains Tax Rates in Ohio
“Conservatives” Angling for a NEW National Tax?
Right when we should be CUTTING spending (not just the rate of increase, but ACTUAL spending) and lowering taxes, certain elements of the RNC and “think tanks” are angling not just to keep existing spending and taxes going but ADD an entirely NEW federal tax for us to pay.
What the heck is going on, aren’t we in the midst of a teaparty?
Alcohol and Substance Abuse Prevention and Early Intervention Health Initiative files for 2012 Ballot
This was just filed with the Arizona Secretary of State’s Office. Supporters of this ballot initiative would like to see it appear on the 2012 November ballot:
ALCOHOL AND SUBSTANCE ABUSE PREVENTION AND EARLY INTERVENTION HEALTH INITIATIVE, proposes an alcohol tax of 25 cents on a gallon of spirituous liquor, and one dollar each on a gallon of beer and wine, the equivalent of less than ten cents per drink. Proceeds will fund prevention and early intervention services for any entity that affiliates with a community based prevention coalition. The initiative establishes an eighteen member commission which sets policy. Only the thirteen members, including three tribal representatives are voting members. The non voting members are directors or deputy directors of the Arizona’s governmental departments.
Should this pass it would require the taxpayers of Arizona to create another new tax on a “sin” and get the State of Arizona involved and investing in keeping yet another source of revenue.
One would think that the solution to alcohol and substance abuse prevention would be parents, family, friends, neighbors and the faith-based community and perhaps an ounce of discipline.
Rep. Jeff Flake: So Just How Broke Are We?
FOR IMMEDIATE RELEASE: January 17, 2012
CONTACT: Genevieve Frye Rozansky
Washington, D.C. – Republican Congressman Jeff Flake, who represents Arizona’s Sixth District, today illustrated the size and scope of the growing national debt.
For a $2 fee and by placing a minimum order of either $8 or $10, some residents in the greater Washington, D.C. area could enjoy home delivery from fast food giant Burger King. It was announced over the weekend that Burger King has been testing home delivery for its menu items from four of its locations in the D.C. suburbs.
The U.S. is so broke that even adding the $2 delivery fee and based on a minimum purchase of $10, our $15.2 trillion federal debt could pay for $1.3 billion at-home Burger King deliveries.
“The level our debt has reached is a real Whopper,” said Flake.
Along with Senators McCain and Rubio, Congressman Flake introduced H.R. 634, the Debt Buy-Down Act, which allows taxpayers to designate up to 10 percent of their federal income tax liability to reduce the national debt. The bill then requires Congress to reduce federal spending by that amount. More information on the Debt Buy-Down Act can be found here.
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Arizona House Speaker Promotes Economic Development
FOR IMMEDIATE RELEASE: January 12, 2012
CONTACT: Rey Torres
Commends Governor Brewer’s Tax Proposal
STATE CAPITOL, PHOENIX (January 12, 2012) – Speaker Andy Tobin today commended Governor Jan Brewer on her announcement of a series of tax reforms designed to spur economic growth. “I am very supportive of the Governor’s tax reform proposals,” said Speaker Tobin. “The fiscal health of our economy remains the number one issue facing our state.” Speaker Tobin further iterated the importance of promoting capital investment and workforce development as well as reducing the administrative and regulatory burdens placed on businesses.
Last year, House Republicans spearheaded Arizona’s Jobs Bill, which laid down the foundation for the state’s economic recovery, and which Governor Brewer signed into law. This year, Speaker Tobin is advocating for additional tax cuts as well as regulatory reforms to cement Arizona’s status as a place businesses want to set up shop.
In addition to the Governor’s tax reforms, Speaker Tobin is proposing a regulatory tax credit. This plan will provide a dollar for dollar tax credit equal to the cost of excessive government regulations. “The cornerstone of job creation is lowering the cost of doing business in our state,” said Speaker Tobin. “This tax credit will supplement the Governor’s other tax reforms to help encourage business expansion as well as new businesses locating across the state.”
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It’s the Same Old Song
By Jonathan Butcher, Goldwater Institute
In 1965, The Four Tops released a follow-up to their hit single, “I Can’t Help Myself (Sugar Pie Honey Bunch)” with a number called “It’s the Same Old Song.” It was, actually, nearly the same song as “Can’t Help Myself,” admits singer Abdul “Duke” Fakir, as he and songwriter Lamont Dozier were in a rush to produce something and “reversed [‘Can’t Help Myself’] with the same chord changes” to write “Same Old Song.”
In Arizona, we’re hearing the same old song about more money for education, now in the form of continuing the “temporary” 1 percent sales tax.
The Arizona Education Network says, “Studies show Arizona continually lags among the bottom of all states in terms of public education funding and academic performance,” as though speaking of money and student achievement in the same breath will somehow link them together.
As history shows, increases in education funding do not lead to higher levels of student achievement. In fact, education funding has been on the rise for decades with nothing to show for all that additional money.
Between 1985 and 2007, federal school spending increased 138 percent, and per-pupil expenditures around the country have more than doubled since 1970, says Stanford University’s Eric Hanushek.
In Arizona, reading scores for 4th graders on the Nation’s Report Card have changed little in the last decade, despite a 47 percent increase in total spending per pupil between 2000 and 2009. Interestingly, even when funding ticked down 4 percent between 2009 and 2010, not only does that make but a small dent in the earlier increases but scores did not change. Suggestions that Arizona’s low achievement levels are a result of funding levels ignore these findings.
Lawmakers should follow Gov. Jan Brewer’s lead and mark Arizona as the nation’s leader in education reform, as the East Valley Tribune reported last week, and keep the state committed to sound fiscal practices and a balanced budget.
Jonathan Butcher is education director for the Goldwater Institute.
Learn more:
East Valley Tribune: Brewer wants to revamp public education funding, expand private school options
Rolling Stone: The Four Tops Turn Fifty
Arizona Education Network: Arizona Voters Support Sales Tax Continuation to Fund Public Education
Arizona Auditor General: Arizona School District Spending
No surprise: Jobs and money go where taxes are low, and Arizona can do better
by Stephen Slivinski
Goldwater Institute
Every year, people and their income move between states. They move for a number of reasons, but there’s ample evidence that cost of living and its relationship to tax burdens are a factor.
The Internal Revenue Service publishes data that shows the movement of income and people between the states by tracking federal “adjusted gross income” flows. A database, created by The Tax Foundation in Washington, D.C., lets the public compare states.
Arizona fares reasonably well. The state saw a net influx of about $2.89 billion in income since the start of the recession at the end of 2007 through the end of 2010. Perhaps not surprisingly, the largest chunk – just over 20%, or $688 million – came from people fleeing California. The next two biggest chunks came from the basket-case economies of Illinois ($380 million) and Michigan ($294 million). People clearly see Arizona as a better place to live and work than states with high tax burdens and winnowing job prospects.
But we are losing income to other states as well. The biggest out-migration of income for Arizona in that period ($170 million) went to Texas, a state that, along with Nevada and Colorado, grabbed more income from California than we did. The first two states have no income tax and the third has a flat income tax.
Taxes aren’t the only thing affecting migration. But they are one of the most direct tools state policymakers can use to influence job creation and economic opportunity. Arizona legislators can and should make the state attractive in as many ways as possible to compete with other states that may have more natural advantages than we do. Eliminating the income tax would catapult Arizona ahead of neighboring states that we are competing with for jobs.
Stephen Slivinski is senior economist for the Goldwater Institute.
Learn More:
Goldwater Institute: The Tax Man and the Moving Van: Fiscal Policy and State Policy Shifts
Tax Foundation: State to State Migration Data
Ally Miller: Pima County Board of Supervisors Anti-Business Decisions Continue
FOR IMMEDIATE RELEASE: December 17, 2011
CONTACT: Dean Miller
On Dec. 13, 2011, Pima County Board of Supervisors handed down a decision to appeal Raytheon property tax valuation as determined by the AZ State Board of Equalization. “This is yet another example of the short sighted and irresponsible behavior by the members of this board” stated Ally Miller, a candidate for District 1 Board of Supervisors in attendance at the meeting.
Pima County Board of Supervisors voted 4-0 to appeal the decision approved by the AZ State board of equalization to lower the assessed value of properties owned by Raytheon Missile Systems in Tucson. Supervisor Richard Elias was absent.
The appeal submitted by Raytheon, based on the valuation of similar properties was approved by the State board of equalization and resulted in valuations lowered from approximately $46.4 mil to $25.6 Mil for 2011 on 19 parcels identified on the board agenda. The 2011 change in valuation would result in a loss of approximately $571 thousand in tax revenue.
Raytheon reportedly pays $130 million in state and local taxes annually.
“Workers in this community are desperate for jobs yet the Board of Supervisors continues with their anti-business practices spending taxpayer money on litigation which could potentially alienate the largest private employer in our community.” Miller added.
“Did the members of the Pima County Board of Supervisors forget about the recent move by Raytheon to build a facility and locate approximately 300 high paying jobs to Huntsville, Alabama?” asked Miller.
After a trip to Huntsville earlier this year it was reported Supervisor Bronson determined tax incentives and fast tracking the development process were among the reasons Raytheon decided to build this facility in Huntsville versus Tucson.
For more information, contact Ally Miller campaign office or visit the campaign website at www.allyforsupervisor.com
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Jeff Flake: Payroll-tax gimmicks hinder serious reform
By Jeff Flake (reposted from The Arizona Republic)
House Republicans have worked hard this year to prove to Americans that we recognize the extent of our fiscal crisis. With tremendous political risk, Republicans passed a budget crafted by Budget Committee Chairman Paul Ryan that made tough, but necessary, decisions to corral out-of-control federal spending and bring about much-needed reforms to entitlement programs.
So after leading by example by embracing the Ryan budget, why are Republicans ending this year’s congressional session by passing another “now-you-see-it, now-you-don’t” temporary payroll-tax holiday? Because politics is dictating policy.
A year ago, Americans were told that a temporary reduction in payroll taxes would jump-start economic growth, improve the economy and put people back to work. This was misguided from the beginning. To begin with, temporary tax reductions don’t improve economic conditions. And make no mistake, this temporary reduction was always sold as a 12-month tax holiday. When short-term tax cuts expire, taxes go back up and the net result is effectively a non-stimulus. Don’t just take my word for it. Economic growth has been hovering between an anemic 1 and 2 percent.
How the payroll-tax holiday is “paid for” is another example in the art of congressional budgeting. Senate Democrats favored raising taxes on high-income earners as a spending offset. But they couldn’t get 60 votes in the Senate to pass it (thank goodness). House Republicans, on the other hand, opted for subterfuge, telling Americans that budget cuts will pay for a new payroll-tax holiday. Non-binding budget cuts that is, spread out over 10 years. That’s right, Congress is proposing to pay for one year’s worth of non-stimulative tax cuts with 10 years’ worth of budget cuts. Don’t get me wrong, I’m all for budget cuts. But budget cuts that kick in years from now aren’t really budget cuts. We’ve been down that road before.
Because payroll taxes fund the Social Security Trust Fund, another short-term tax holiday exacerbates the insolvency of the fund. It is pretty remarkable to see Democrats, self-proclaimed protectors of Social Security, so forcefully embrace blowing a huge hole in the Trust Fund, and Republicans, fierce critics of deficit spending (at least rhetorically), so willing to resort to gimmicks to mask larger deficits.
More than anything, the economy needs serious tax and regulatory reform, reform that would result in a permanent reduction in marginal rates for all income earners brought about by removing credits, deductions, loopholes and tax expenditures (like that envisioned by the Simpson-Bowles Commission). Ideally, capital-gains taxes would be eliminated for everyone, but at a minimum, the tax rates cannot increase.
America’s corporate-tax rate, currently the second-highest in the world, should immediately be reduced to 25 percent. Permanent reforms like these would unleash a torrent of economic activity and move the economy and unemployment rate in positive directions. Another round of a nickel-and-dime “now-you-see-it, now-you-don’t” tax holiday is misguided.
Jeff Flake is the U.S. representative for Congressional District 6, which includes parts of Mesa and Chandler and all of Gilbert, Queen Creek and Apache Junction.
A state with prosperity, lower taxes is possible
If we could start from scratch and redesign Arizona’s state-government programs in the interest of efficiency, effectiveness and fairness, they would look very different than they do now.
Ideally, state government would provide genuine public goods (in the strictest sense of the economic term “public good”) and provide a social safety net, with minimal harm to taxpayers and minimal drag on economic growth.
Government support for K-12 and college education (which now take up over half of the state budget) would be voucherized, with money going directly to families to empower them to shop among competing private and non-profit schools.
The vouchers would be means-tested so that low-income families received bigger vouchers, with a formula for extra subsidies for children diagnosed as having special needs.
If K-12 vouchers were deposited into tax-exempt education-savings accounts, families would have a strong incentive to bargain for lower tuition and to save and invest excess funds for future education, health and retirement purposes.
AHCCCS/Medicaid, which currently takes up a quarter of the state budget, needs radical reform. By correcting flaws in the federal tax code, we could encourage the vast majority of citizens to buy portable health-insurance coverage through tax-exempt health-savings accounts, with means-tested government support for the poor (including block-granted federal dollars).
For people who are too sick to be easily insurable in low-premium, high-deductible HSA plans, the government could maintain high-risk pools in coordination with private charities.
Along the same lines, unemployment insurance would be based on contributions to private, individual accounts so that individuals saved their own money when they were working and spent their own money when they lost their jobs, thus creating strong incentives to quickly find new jobs.
Many state highways and roads (which often involve public-good holdout problems) could be made self-funding through long-term private concessions to finance, build, maintain and operate new roads and new highway lane-mile capacity.
With the above reforms, Arizona’s general-fund budget would be $9 billion a year. Ideally, that would be funded with a broad-based retail sales-tax rate of less than 4 percent — no personal or corporate income taxes, and no local education property taxes (which currently take up at least half of people’s property-tax bills).
As long as we’re talking about the ideal world, let’s go further and assume that the federal government was limited to its proper functions under Article 1, Section 8 of the U.S. Constitution.
With a federal government one-fifth of its current size and funded by a 5 percent national retail-sales tax (eliminating federal income, capital gains, dividend and death taxes), Arizona taxpayers could readily afford to replace and reform many of the federal entitlement programs.
By paying for those functions with an additional statewide sales tax of 5 percent, we could limit the total combined federal, state and local sales-tax rate to about 15 percent.
With a total tax burden about 15 percent of GDP, Arizonans would have the most efficient, most pro-growth tax system in the developed world, resulting in real annual per capita economic growth around 3 percent.
At that rate, Arizonans would double their real wealth every 25 years.
The tough question is not whether this would be good for Arizona.
The tough political question is how we get there from here.
Tom Jenney is Arizona director of Americans for Prosperity, which seeks to educate citizens about economic policy.
Gosar Votes to Continue Cuts to Federal Spending
FOR IMMEDIATE RELEASE: December 16, 2011
CONTACT: Apryl Marie Fogel
Calls Bill a “Crap Sandwich”
WASHINGTON, DC –Today, Congressman Paul Gosar, DDS (AZ-01) voted to support the Fiscal Year 2012 Consolidated Appropriations Act (H.R. 2055). This bill averts a government shutdown while decreasing federal spending from over $6 billion from fiscal year 2011 funding. This legislation means the total annual discretionary funding for fiscal year 2012 is $95 billion less than last year’s budget – a victory for conservatives.
“I have consistently said throughout my time in Washington that the American people deserve more from their government. This bill is a crap sandwich! You definitely do not want to bite into it, you cannot stand the taste, but you know you have to eat it. I hoped that this bill would include far more cuts, greater reforms, and more regulatory relief. I’m disappointed that it does not! Let me be the first to admit, this legislation is far from perfect! It does however inch us forward towards our ultimate goal of restoring fiscal sanity.
It is important to remember that conservatives control just one-half of one-third of the federal government. We are a vocal and influential minority. Tough decisions have to be made and included in this bill are key provisions to strengthen our national defense and border security. In addition, it defunds several portions of Obamacare and supports important forest health initiatives.”
H.R. 2055 makes important cuts while ensuring our service members abroad and the brave national guard and border patrol here at home have the resources they need to protect our country. Additionally, it provides badly needed transparency and conditions on foreign aid, will provide the resources necessary for wildfire suppressions and prevention, and facilitates increased economic development on public lands, like grazing.
Congressman Paul A. Gosar, DDS hails from Flagstaff, Arizona and is serving his first term in Congress as the Representative from rural Arizona’s First Congressional District. As a health care provider and small business owner, Gosar is focused on bringing jobs back to the district, reforming health care, reining in government spending, and ensuring that the American people are involved in the solution making process.
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Congressman Flake Votes Against Omnibus Spending Bill
FOR IMMEDIATE RELEASE: December 16, 2011
CONTACT: Genevieve Frye Rozansky
Spending Levels Simply Too High
Washington, D.C. – Republican Congressman Jeff Flake, a member of the House Appropriations Committee, today voted against H.R. 2055, the Conference Report for the Military Construction, Veterans Affairs, and Consolidated Appropriations Act of 2012.
“Aside from spending levels being simply too high, this is a 1,200-page bill that we’re voting on only a few hours after it was finalized. We’ll be discovering for months to come what’s actually in it,” said Flake. “This is unacceptable. We promised to do better.”
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Special Poll: Stop Punishing Investment to Spur Job Growth
Small-business owners point to a way out of Arizona’s recession
PHOENIX, Ariz., Dec. 14, 2011 – Small-business owners believe Arizona needs further legislative action to spur job creation and overwhelmingly favor lowering the property tax burden on new equipment and machinery to do so, according to a special poll released today by their leading representative association.
“Small business wants job creation to continue to be the highest priority for Gov. Jan Brewer and the Arizona Legislature next session,” said Farrell Quinlan, Arizona state director for the National Federation of Independent Business, America’s largest small-business association. “Lowering the cost for small businesses to create jobs through meaningful property-tax relief and the further lifting of the regulatory burden will help restore Arizona’s economy and put our citizens back to work.”
The NFIB survey found near unanimous support among small business owners with 93 percent agreeing our leaders should keep job creation a high priority. It also found 77 percent of small business owners favor significantly increasing the amount of a business’ equipment and machinery that is exempt from personal property taxation.
The survey based its personal property tax questions on a legislative referral being developed by Senate Majority Leader Andy Biggs (Gilbert) and other lawmakers, including House Ways and Means Committee Chairman Jack Harper (Surprise). The legislation, called the Small Business Job Creation Act, asks voters to increase the Arizona Constitution’s exemption for new equipment and machinery to an amount equal to the annual wages of 50 Arizona workers or approximately $2.3 million from the current $67,000.
The NFIB survey dramatically reveals that lowering the tax burden on a business’ equipment and machinery would lead to a burst of job creation from small businesses. When asked if Sen. Biggs’ proposal becomes law, 46 percent of small business owners said raising the personal property tax exemption would likely lead their businesses to hire new workers while 56 percent said such a move would likely result in more equipment and machinery purchases.
“Clearly Arizona’s economy has yet to recover and that’s born out in continued weak job creation numbers and Arizona’s unemployment rate remaining stuck at 9 percent,” said Quinlan. “Small businesses have historically led our state and nation out of recessions through creating new jobs and investing in the future. Small business’ message to our political leaders is unmistakable, job creation is the top issue and lowering small business’ cost of creating those jobs is a great place to start.”
The poll was conducted September 6 to October 21, 2011 with 496 respondents who are Arizona small business owners. The entire poll can be read by clicking here. Results from NFIB’s fuller, annual survey on other issues will be released in the coming weeks.
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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.
Congressman Flake Votes for a Tax Hike and Against American Jobs
FOR IMMEDIATE RELEASE: December 13, 2011
CONTACT: Katie Martin
Phoenix, Arizona – Congressman Flake voted Tuesday to increase taxes by an average of $1000 a year for all American working families and voted against a new oil pipeline project that would create more than 20,000 new jobs. The Congressman voted against H.R. 3630, which will extend the payroll tax holiday and allow for the Keystone XL Pipeline to be constructed.
“Congressman Flake has been in Washington so long that he doesn’t understand Arizonans need lower, not higher taxes and America needs jobs,” said Wil Cardon, candidate for U.S. Senate. “Career politicians like Congressman Flake just don’t get it.
“The Congressman’s vote to deny working Arizonans more take home pay will continue to hurt working families in this bad economy. Additionally, Congressman Flake’s vote against creating 20,000 new jobs is unconscionable. But what can you expect from a politician who has never spent a day in the private sector, nor ever created a single job.
“In the Senate, I will fight every day to grow our economy by cutting taxes, reducing spending and promoting pro-growth policies that help businesses create jobs. That’s why I am running for the U.S. Senate.”
Last week, Cardon called for comprehensive pro-growth tax reform to fix the country’s dire economic situation and create a stable environment for job creators.
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State policymakers can give a gift of certainty next year
by Stephen Slivinski
Goldwater Institute
Since 2001, the federal tax code allowed business owners to write off more of the investment they make in their company each year and, today, businesses can write off 100 percent of the capital investments they made this year. But if Congress and the President don’t act, that tax cut will end in January 2012. State policymakers, on the other hand, could offer a little certainty in their state income tax code by allowing businesses to immediately write-off on their taxes the full value of their new capital investments.
To understand why and how they should act, first you need to know what happens when a business owner makes a capital investment in his operation. Let’s say he buys a productivity-enhancing machine — a computer, a copy-machine, or a large widget-making device. When purchased and put into service, the IRS allows only a small portion of that investment to be written off in the first year. Instead of writing off the full cost all at once, the business would have to take a number of smaller deductions each year over the usable life of the machine as it declines, or “depreciates,” in value.
This isn’t particularly helpful for economic growth and productivity. Not allowing businesses to immediately write-off the amount of the purchase forces them to understate the true cost of doing business that first year and pay more in taxes as a consequence. Factor in mild inflation and it could even result in the business never being able to fully deduct the business expense over the long term. This dampens investment today and that dampening effect negatively influences job and wage growth.
A simple change could lock this year’s 100-percent deduction into a state’s tax code forever. Short of eliminating the income tax, this would be a great way to maximize a state government’s ability to create a bit of economic certainty for businesses.
It would also counter most state’s tax bias against investment. Kansas governor Sam Brownback realized this was a problem in his state and one of his big, successful legislative pushes this year was enactment of just such a reform. The Sunflower State is, in fact, the only state with an income tax tied to the federal tax code to have cemented 100 percent expensing in their state, which will give them quite an economic advantage.
This would be an effective way to increase long-term business investment in any state with an income tax. State policymakers shouldn’t miss this golden opportunity to give the gift of some tax certainty as soon as they can. It truly can be a gift that keeps on giving.
Stephen Slivinski is senior economist for the Goldwater Institute.
Learn More:
Institute for Research on the Economics of Taxation: Administration Advocates Expensing: One Big Plus (Among the Minuses)
University of Kansas Center for Applied Economics: Expensing: A Competitive Leap for Kansas Tax Policy (September 2007)
BKD CPAs and Advisors: New Kansas Laws Include Expensing Provision, Incentive Repeal