Ugenti-Rita: Arizona Small Businesses Will Benefit from Tax Bill

Michelle Ugenti-RitaA little over a month ago, President Trump signed the Tax Cuts and Jobs Act into law, and Americans are already feeling better than ever about the state of our economy. In a recent poll from Quinnipiac University, 66 percent of Americans rated the nation’s economy as either “excellent” or “good”—a three percentage point jump since last month.

It’s difficult to not be excited about the impact the tax bill is having on Arizona and its small businesses. The relief could not have come sooner.

Arizona is home to nearly 500,000 small businesses that employ approximately one million people. For too long these entities have struggled under a burdensome tax code that has prevented growth. With the previous federal tax rate approaching 40 percent, small businesses saw much of their hard-earned revenue disappear into the pockets of Uncle Sam.

Fortunately, measures included in the new tax relief package will reduce this burden. The Tax Cuts and Jobs Act created a 20 percent standard deduction that applies to roughly 95 percent of small businesses and eliminates high tax brackets in favor of new, lower ones.

To put the standard deduction in layman’s terms, with the help of the new tax legislation, small businesses earning $200,000 a year are able to shield their first $40,000 of income from taxation. That extra cash can now be funneled into employee bonuses, wage increases, job creation, and business expansion. These measures will further bolster Arizona’s pro-business, pro-growth reputation.

According to a report by BMO Financial Group, Arizona’s business environment is already strong. While most state economies are expected to grow by an average of 2.2 percent, Arizona anticipates 2.8 percent growth in 2018. The tax cuts package will only accelerate that advancement.

In fact, we are already seeing some positive results in the state. Arizona-based YAM Worldwide announced it will be giving out $1.3 million in bonuses to its employees. Furthermore, over 1,000 JPMorgan Chase employees in Arizona will receive wage hikes or bonuses as part of the companies nationwide $20 billion, five-year plan to invest back into the country.

In addition, a report from the nonpartisan Tax Foundation found the bill will create almost 6,500 jobs in the state.

These must be the “crumbs” Nancy Pelosi and the Democrats scoffed at while trying to explain away the benefits resulting from tax relief. For some, these “crumbs” represent eased rent worries, the ability to afford childcare or help with the skyrocketing costs of healthcare.

The examples chronicled above are only a small piece of the benefits the tax bill has induced. Imagine the impacts Arizona will feel a year from now.

Rep. Michelle Ugenti-Rita (R) is the Chair of the Arizona House Ways and Means Committee and represents the 23rd House District

VOTER GUIDE: Democrat Kyrsten Sinema on Taxes, in Her Own Words [ @KyrstenSinema ]

Democrat congressional candidate and criminal defense lawyer Kyrsten Sinema served for six years in the State House under Republican control, and one year in the State Senate under Republican control. She complained throughout those years that Arizona families were undertaxed. She even called Arizona “our tax-starved state.” Fortunately, Republicans would not let tax increase bills be voted on during her years in office, denying her a chance to raise your taxes. (Now, like a guy who kills his parents then pleads for mercy as an orphan, Sinema boasts she did not vote for tax increases, after complaining for years that the GOP would not act on her tax increase demands!) She must think Arizona voters are stupid … or perhaps leeches. Let’s look at her own words.

Here is Sinema’s state tax increase plan as provided to the Arizona Republic. Note that each one of her ideas would devastate entire sectors of the state’s economy:

[R]aising taxes is more economically sound than cutting vital social services …. In Arizona, there are a number of techniques that we could use …. Broadening the sales tax to include services, closing exemptions on sales tax items, reinstating the state property tax, and eliminating tax credits are just some of the strategies to create a more broad revenue stream to fund Arizona’s important programs. I do not support irresponsible pledges to “not raise taxes” … our tax-starved state relies on.

We are a starved budget in a recession…. As mentioned above, I advocate broadening the sales tax to include taxing personal and business services, such as telemarketing, auto repair, and hair and manicure services. This alone would generate roughly $565 million to the state budget per year. I support restoring the sales tax to items currently exempted, such as health club memberships. By restoring the sales tax by closing these exemptions, the state’s revenue would increase about $1.4 billion per year. I support expanding the sales tax to include Internet sales…. I advocate eliminating tax credits such as the education tax credit … and the enterprise zone tax credit.

Wow: by her own calculations, in a failing economy, she is demanding $2 BILLION annually in new state taxes, and that’s not even counting her plan to reinstate the state property tax. She is virtually alone in America in calling for tax increases during a recession.

Separately, she promised to “greatly increase” capital gains taxes on families and “greatly increase” corporate taxes. [“Kyrsten Sinema – Political Positions,” Project Vote Smart 2006.] America already has the highest corporate taxes in the world, which helps drive jobs overseas. Even Barack Obama said he is open to reducing the corporate tax rate. What’s more, guess what happens when corporate taxes are increased? Companies raise their prices. So this is a hidden way for liberal Democrats to stick it to the middle class to fund their pet projects: raise taxes on businesses, and the higher retail prices that result are seldom linked back to the politicians who caused it.

But there’s more! Sinema wrote a bill to create a new, 25-CENT TAX on EVERY plastic bag you use at a supermarket, convenience store, fast food restaurant and other retail establishment – even including dry cleaner bags. She’d also nail you with a 15 cent tax for every paper bag. That’ll teach those work at home moms she calls leeches!

She also opposed a 2008 Arizona ballot initiative to ban all real property sales or transfer taxes, and another one to make it harder to raise taxes or increase government spending by requiring initiatives to pass by a majority of all registered voters. She called them “stinkers” and organized a group to oppose them. [“Unite and Conquer: How to build coalitions that win—and last,” by Kyrsten Sinema (2009), p. 67.]

What about federal taxes?

In June of this year, Sinema said we should let all the Bush-Obama tax relief expire this coming January, which would be a $5.4 TRILLION tax increase over 10 years. Even her Democratic primary opponents were flabbergasted by this job-killing promise. Fellow Democrat Andrei Cherny wrote:

“this is not the time to be raising taxes on the middle class. Just recently, one of my opponents, Kyrsten Sinema, vowed to repeal the Bush tax cuts in total …. This speaks to her values and approach and I think it is the wrong way to deal with a middle class that is getting battered.”

The Sinema tax increase would nail every middle class taxpayer in America and drive our teetering economy off a cliff. US economic growth in 2012 under President Obama is less than 2% (by contrast, growth in China is around 8%). Her tax increase would send us back into recession.

Finally, consider all her massive promises of more and bigger government programs: where will she get the funding for all of them? As a member of Obama’s health care taskforce, she already helped craft his healthcare takeover bill, Obamacare, which includes a $716 BILLION cut to Medicare over the next 10 years. She can’t pay for all her promises by raiding Medicare — she’ll need to jack up taxes, including on working families and job-creators. That’s bad news for all of us.

Kyrsten Sinema has been quite candid about her plans to raise your taxes. Will you let her? The clear choice for Arizona is Vernon Parker.

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The writer can be reached via Twitter. Be sure to share this with Arizona taxpayers you know.

Transformers aren’t just for kids…

Have You Seen Me?

Recently it has come to the attention of many Arizona conservative activists and tea party members that there are a number of Teachers Union candidates posing as Republicans in our legislative races — make no mistake about it, these are Trojan Horse candidates…also known as “Democrats in Disguise”, or “DID’s” for short.  They are supported by the Arizona Educational Association, Teach for America, the ASU bureaucracy and most administrative organizations.

Parents who choose Christian schooling, online education, charters, secular private schools and home schooling should be particularly alarmed because these DID candidates are instinctively opposed to expanding school choice.

These chameleon candidates have been emboldened by the passage of a $3 Billion tax hike; also known as Proposition 100. Their plan is to cross the tax hike threshold by planting DIDs in a few heavily Republican districts.  Voters will be fooled into thinking they are voting for a fiscally Republican conservative, but they aren’t, and by the time they’d find out who these candidates really are – the damages will have already been done. The Arizona Republic and Citizens for Tax Justice (www.CTJ.org) claimed that Arizonans want to pay higher taxes, but the elected representatives in the legislature weren’t listening. So, this is their plan to implore candidates to vote for higher taxes for public education.

Their website (www.ExpectMoreArizona.org) says nothing about better education, just higher taxes. In fact here is a snipit from a “blogger” on their  “Expect More Blog” by a supposed small buisiness owner:

“As a small business owner I believe we, the taxpayers of Arizona, should invest heavily in our public education system.  In fact, I am willing to step up and pay more in personal and business taxes so that we can hire the best teachers, build modern infrastructure and attract the most innovative and brilliant leaders…”

If successful, this group will turn the Arizona Legislature into a tax hike playground.  Most of the DIDs are teachers and school board members who are registered as Republicans but carry the platform of the teachers union and the Democratic Party. Make no mistake, these are NOT TRUE REPUBLICANS!

The Vote 4 Education DIDs generally file their petition signatures close to the deadline, and are running as traditionally funded candidates. Most have had no prior visible involvement in Republican Party politics and many are unknown to local Republican activists. Contrary to Conservative Republican views, they are proud supporters of government run education.  Many of these fake Republicans have endorsements from the infrastructure spending lobby, and have received significant PAC donations after the campaign finance filing deadlines so as to delay full disclosure to potential voters.

Take, for example, Heather Carter, Clinical Associate Professor at Arizona State University in the Mary Lou Fulton Teachers College and now Republican House candidate in Legislative District 7 that touts she is registered Republican since 1988 and is a “A REPUBLICAN EDUCATOR WHO IS PRO BUSINESS” on her website.  Carter has stated she was for Prop 100, against tax limiting Prop 13 Arizona, and for more taxpayer money for schools.  She talks about balancing the state budget and fiscal responsibility, but no where can we see that she is about lowering taxes. More taxpayer funds (meaning increased taxes) and pro-business are two phrases that just don’t go hand-in-hand on a Republican ticket. She claims to have more than $20,000 in PAC donations and has teachers and union members working on her campaign, going door to door on her behalf.

Carter is currently involved with Teach for America in the education department at ASU.  She is closely linked with the education lobby. Her website shows endorsements from the Arizona Education Association teachers union, the Professional Firefighters of Arizona PAC, and the big government advocates at the Phoenix Chamber of Commerce.

Dr. Craig Barton, former Professor at Ottawa University and University of Phoenix and now Republican House candidate in LD 7, is also a Vote 4 Education supporter.  Barton operates charter schools which depend on tax revenue to operate.  If elected, Barton will be able to vote more money to his and other charter schools.  Barton says he supports Prop 100 yet signed Grover Norquist’s Americans for Tax Reform (www.ATR.org) pledge not to raise taxes.

Note: LD7 Heather Carter and LD6’s David Braswell have teamed up for a fundraiser sponsored by the teacher’s union, on 22 July.   This needs to be exposed.  Quickly.  Voters need to know what they stand for, and who they really are.

Legislative Districts 6, 8, 10, 11, 21 and 22 all have known DIDs running for legislative seats.  The following candidates should be heavily scrutinized before the primary elections as all of them are suspected DID’s. Each one can potentially hold up a conservative reform agenda; not just educational reform, but tax and budget cuts.

  • David Braswell, LD6 Senate
  • Karen Fann, LD1 House
  • Venessa Whitener, LD21 House
  • Paul Howell, LD22 House
  • Steve Urie, LD22 House
  • Wade McLean, LD26 House
  • Doug Sposito, LD30 House

The Arizona Education Association claims 81% of its members believe the State Legislature is the biggest obstacle to achieving success in our schools.  All they need is more of your hard earned money. They say the legislature is standing in the way of their “success”. If you vote for one of their candidates you are moving us one step closer to a 2/3 majority in the legislature required to raise your taxes. Vote 4 Education is nothing more than a Vote 4 Higher Taxes plain and simple, and these candidates are aware of this. They are fooling the Arizona public into thinking that they are fiscal Republicans only because they know they would have no chance at winning an election as a Democrat in these districts. Do not be fooled. Please spread the word.

Arizona Tax Research Association Opposes Proposition 200

Taxpayers in the City of Tucson, courtesy of Proposition 200, are being asked to amend the city charter to strip the current and future city councils of their authority to establish budgets for the police and fire departments. The Arizona Tax Research Association (ATRA) strongly urges Tucson taxpayers to reject this effort at ballot-box-budgeting.

From local school districts to the state of Arizona, clearly the most important duty of our elected representatives is to establish an annual budget. Once adopted, those budgets reflect months of planning where elected officials are challenged with managing changing spending priorities against the budget decisions of previous elected officials.

The State of Arizona has become the poster child for the negative policy implications of ballot-box-budgeting. For the last two decades, a steady stream of special interest groups used the initiative process to either permanently earmark funds to their causes or establish guaranteed funding levels outside of legislative oversight and control. Collectively these initiatives have undermined the state’s budgeting process by handcuffing state lawmakers ability to react to changes in the economy or spending priorities. Today, the state of Arizona faces a $3 billion budget deficit. It would be an understatement to say that the challenge of closing the deficit is complicated by the fact that some major budgets units are “voter protected” and cannot be reduced.

The inherent flaw with ballot-box-budgeting is that citizens vote to mandate a spending obligation without understanding the long term budget impacts of the proposals and clearly the proponents prefer it that way. Side-stepping the cities budgeting process allows the proponents of Proposition 200 to have an isolated budget debate regarding police and fire protection without the unpleasantness of a tax increase to fund it. Make no mistake; in the end, this process always poorly serves taxpayers who are left questioning why citizens were not properly informed that these services are not free.

In fact, in order to force a more informed debate regarding the true costs of mandated spending initiatives, Arizona voters amended the state’s constitution in 2004 to require that such initiatives “also provide for an increased source of revenues sufficient to cover the entire immediate and future costs of the proposal.”

By any measure, Proposition 200 will force increased spending that will either drive future tax increases or impact other city services. With the current economic crisis facing Arizona serving as a painful reminder, Tucson taxpayers can be assured that, if approved, Proposition 200 will certainly force a tax increase at some future date.

Kevin McCarthy, President
Arizona Tax Research Association (ATRA)

ATRA is a sixty-nine year old statewide, non-profit, non-partisan taxpayer association