Thursday, March 13th, 2008...8:49 am
Crisis? What Crisis?
As I fully expected, the legislature has gone ahead and passed an ill-concieved extension of a property tax break. This is happening while the same legislature has to figure out how to fix a $1.2 Billion hole in the current state budget.
What is particularly funny is the contorted logic employed by supporters of this plan. One is that this would create a “stimulus” allowing the Arizona economy to grow out of its current budget mess. This is a common supply side argument which could be made (but I still won’t buy it) for a national economy where most of the money would be reinvested and spent domestically. However, given how many of the larger beneficiaries of this are large corporations, it is hard to argue that the lions share, or even a significant share, will be spent in Arizona.
Also, since this is an extension of a tax break given a couple of years ago, where is the additional “stimulus”?
The other silly argument was that somehow this would cure the mortgage crisis. I refer to the last point: if the current mess happened under the current tax break, how would extending it fix it?
If they are just anti-tax, why not say so instead of couching it as some sophisticated economic theory?
5 Comments
March 13th, 2008 at 11:25 am
Great post…and right on.
What they forget is that property taxes are also one of the most important funding sources for our schools, which are already strapped for state funds, and which rank extremely low.
The state Chambers of Commerce, TRIO and others have started talking about how an educated workforce (lack thereof here) is what brings economic development. It is among the worst of our problems, Joe Snell and TRIO say.
March 13th, 2008 at 12:03 pm
Can any backer of this bill explain how extending a tax break that won’t expire till 2010 will help business, the Arizona economy, the state’s underfunded schools or anything else in 2008? Your point about this being a benefit for corporations that are mostly controlled by non-Arizonans is a good one. It will be interesting to examine out-of-state contributions to certain legislative campaigns this year.
March 13th, 2008 at 3:14 pm
A solid argument could be made that just about everybody is going to get a tax increase anyway. I know that my most recent appraisal went up 20% over last year.
One might argue, if they weren’t class warfare inclined, that upping the property tax rate along with an increase in property valuation may be a tough pill to swallow for many who are facing an economic downturn.
But we don’t need those people anyway.
March 13th, 2008 at 3:29 pm
Class warfare aside, there’s no good time for tax increases OR school closures.
March 15th, 2008 at 8:11 pm
Arguing that ending a tax cut is the same thing as a tax increase is ludicrous. It’s like the argument that some Republicans are throwing out there that letting the Bush tax cuts expire as scheduled (and on the date that was written into the bill when they were passed in 2001) is the same thing as a tax increase. It isn’t.
A good analogy is this: If a supermarket that normally charges $3.49 for a gallon of milk puts it on sale for two weeks (with a sign saying, “On sale until”) for $2.00 per gallon, then ends the sale on schedule and goes back to charging $3.49 again, then are they raising their prices? I think not. They gave their customers a break for a couple of weeks, but there is absolutely no reason why the customers should expect them to permanently lower the price to the temporary sale price.
I’m distressed to see that so many people (including the AZ Republic headline writer on Friday) are buying into the hooey that letting temporary tax cuts expire on schedule is the same thing as raising taxes.
We need to call them out on it.
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