Earlier this year, Gov. Fife Symington announced that he would completely eliminate the state income tax if he is re-elected to a second term. "We are giving every Arizonan the economic freedom to succeed and to build a brighter future," he said. Could Arizona, the bastion of radical movements, become Symington's testing ground for the Laffer Curve and supply side economics?
The answer is an emphatic yes. So emphatic, in fact, that trickle down economics could quite possible turn into raging flood economics. According to the governor and other fiscal conservatives, people will purchase more products with the tax dollars they save. This sales and property taxes will increase as a result of a prosperous economy.
Supposedly, the bottom line is that the economy will boom without having the state losing the $1.5 million it generates every year. And people thought that the Clinton health care plan was complicated.
I'm not an economy major, but even I can see that getting rid of the state income tax doesn't seem very logical. Some very important questions need to be answered. First of all, will it work? Somehow I have a hard time believing that $1.5 million can be made up with sales and property tax alone. It's not like everyone will go out and buy a new car or house. Even if they do it will most likely be a Porsche, where the money will trickle its way to Germany. Most people will do other things with their money besides going out on a spending spree. As a starving student I would probably buy food, which is not taxed at all. Not yet at least.
Second, is it fair? The idea of an income tax is that it is a progressive tax. Those who make more pay more in taxes. That's the most equitable way of paying for taxes. Sales tax, on the other hand, is regressive and unfair to those who aren't well off. Everyone will pay that flat 6 percent state sales tax, regardless if you make $100 an hour or $100 a week. If you are part of the latter tax bracket that $1.23 won't go very far.
Lastly, would we actually want it? Part of the reason for the increase of property tax is because of the expected rise of incoming businesses and residents. I can see it now. People from every corner of the United States will flock to Arizona to escape the life-threatening state income tax. Then huge corporations such as General Motors will leave Detroit for Casa Grande. Our state will grow faster than snowbirds can leave at the first hint of summer. Housing developments will be built at the bottom of the Grand Canyon to accommodate for the massive tax base. Disney Universe will open in Scottsdale. Yuma will become the Southwest's art, fashion and cultural mecca. In other words, all hell would break loose. Hey, we already have 50,000 devils running around to the north of us.
I know that Symington is a fiscal conservative with an extensive background in business. Still, it makes me wonder why he's taking a plank out of the Libertarian platform. I thought that the GOP was always big on reducing taxes, not eliminating them. The Great Communicator, Ronald Reagan, didn't act out any parts involving abolishing the income tax. And to my very limited knowledge George Bush didn't lip sync it during his brief reign as king. Mr. Symington, if by any chance you're reading this, I have some advice for you. Don't worry so much about the state income tax. Come next year you may not receive any income at all.
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