Thursday December 18, 2014
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I'll have to admit that this caught me completely by surprise. I was thinking about the extra 1% sales tax they've been asking us to vote onto our own backs. (I voted against it.) While I was checking things at the legislature I ran across the fact that they are working on corporate tax cuts--again.
I could not understand that, not at a time when we are almost broke, so I thought I'd check the bottom line, which is how many actual jobs have been added due to the corporate tax cuts we've seen so many times over the past few years.
Mind you, I am all in favor of tax cuts for startup businesses, but I've always believed that once a business is well established it should pay its way just like it competitors. And I see no sense in giving tax cuts to APS, Century Link, and other large corporations who have no choice but to come here if they want to do business. Giving them tax cuts is just plain dumb.
In case you have forgotten, we had a large corporate tax cut in 205 that is costing us a whopping $86 million each years, on top of the cuts in earlier years. This new corporate tax cut will cost us in the neighborhood of another $84 million eery year. Our corporate tax rate is set to fall by 30 percent between now and 2017, which means we could end up not only having the lowest corporate taxes in the nation, but conceivably in the entire world.
What is amazing is that between 1994 and 2008, through good times or bad, the only thing which held true of taxes is the downward trend in corporate taxes. As it is right now, two-thirds to nearly three-quarters of Arizona businesses that file state income tax returns are paying almost no tax, only a token amount, the $50 minimum.
"In Arizona?" I asked myself. "When did we suddenly get rich? I wish I could pay a $50 minimum."
The thing is, you see, we have a state constitution that requires us to balance the budget; if we don't get the money from the places it has been coming from the result is inevitable. No matter what anyone may say, when someone's taxes go down, you and I have to pay higher taxes to make up for it.
But the shock came when I researched the issue and uncovered two facts:
The drop in corporate taxes cannot be shown to have caused ANY increase in jobs. None!
And to quote the Arizona Republic, "More than half the $80 million in annual credits goes to businesses ... based outside the state."
Read those words again: "...based outside the state." If the legislature is going to give tax cuts to businesses, they should go to small and large businesses in our own state, not giants which are not actually Arizona businesses. No wonder we're broke!
I'd like to see a state personal income tax reduction. Make my tax the $50.
Hmm... since I'm moving from Arizona, I won't worry about it!
It looks like the rest of us will remain broke until at least 2017.
Check out where the sales tax goes that is collected at Cardinal games for souvenirs.
My guess would be Glendale.
I know that when the Coyotes were going to leave Glendale was all up in arms about the loss of souvenir tax money.
I am not sure about them, but when the ball teams first came to the valley they collected the sales tax and kept it. One of the perks of coming here. I don't know if it was for a limited time or not.
I didn't come up with that.
I'll say this, though. It is not right to force taxpayers to pay cough up money to build sports facilities. It would be fine if they put it to a vote each time because it would be turned down every time it is tried. It is not true that the town or city which pays for the facility earns enough in taxes to make up for its cost, something which is borne out by research. In fact, the coming of a large sports facility has a negative effect on local taxes because of the need for additional law enforcement, road construction and maintenance, and other things. Furthermore, most of the money earned goes straight out of town.
Pro sports is a business. It should maintain itself like any other business. When we talk about government using a hands-off approach with business we should remember that it is a two way street. Only the minimum regulation needed to keep people honest, and the minimum support needed to provide the same services provided to ordinary citizens are appropriate.
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