ICYMI: Jon Kyl Discusses President Obama’s Push to Raise Taxes on Americans Business Owners


Sales Tax Increase? Easy Answer

Alberta H. Charney, in the Eller College of Management Spring economic report, wrote an  article, “What Will It Cost If Voters Reject the One-Cent Sales Tax Hike?” The article is a textbook piece propaganda.

 Charney stated that passing the sales tax will raise about $1 billion annually (taking it from the private sector) But, she goes on to state, the government spends those dollars, pumping money back into the economy: “That spending by the public sector adds to aggregate demand just as private sector spending does.” 

My analysis: taking money from the private sector to pass through government to prime the pump of the private sector is not only inefficient but also ineffective:  government has to spend part of that tax money on its own operation. For example, the government tax removes $1 billion from the private sector but returns, for example, only $800 million to the private sector. In effect, government is always less efficient because it has to use part of the tax revenue to tax, collect and spend.

 Then she works her way through an analysis that the cost of the sales tax increase will cost Arizona only 7,400 jobs. Failing to approve the sales tax increase will cost Arizona 20,500 jobs. What she doesn’t say is the 7,400 jobs are in the private sector; the 20,500 jobs are in the public sector. Ergo, approving the sales tax increase will save over 13,000 jobs.

 As I read it, saying no to a sales tax increase reduces the size of government not the private sector. Saying yes to the sales tax increase reduces the size of the private sector by eliminating 7,400 private sector jobs, saves 13,000 plus public sector jobs, does not reduce the size of government and increases taxes by $1 billion during a recession.

 I know how I’m voting.