Arizona Needs To Follow California, NOT Kansas Tax Strategy: Tax People Who Can Afford To Pay

Gov. Ducey need not follow the failed example of Kansas Gov. Brownback who learned that a state cannot slash and burn its way out of a budget crisis –not if “Dorothy” ever wants to find her way home.

Our state should have learned from past efforts to replicate here the failed anti-gay,  anti-women, anti-immigrant ideas of Kansas theoreticians who tried to bring their mean-spiritedness here.

It was a year ago that the Religious News Service pointed out that “gay rights are colliding with religious rights in states like Arizona and Kansas as the national debate over gay marriage morphs into a fight over the dividing line between religious liberty and anti-gay discrimination.”

Tim Schultz, the State Legislative Policy Director for the American Religious Freedom Program, called the Kansas bill “a thoughtful and balanced civil rights law,” saying that the legislation would “ensure that Kansans of all faiths continue to enjoy robust rights to the free exercise of religion for many generations to come.”

The ARFP is part of the Ethics and Public Policy Center (EPPC), a conservative Washington think-tank.

The effort was spearheaded locally by the Center for Arizona Policy, a social conservative group that opposes abortion and gay marriage. The group says the proposal is needed to protect against increasingly activist federal courts and simply clarifies existing state law.

 The same is true with taxes for these slash and burn folks.

The opposite approach was taken by Gov. Jerry Brown of California. He raised taxes on those who could afford to pay them, and took the state from deficit to surplus by spending the way out of the recession.

Jobs are up in California: 16% of US job growth. The state now has a thriving economy –8^th largest in the world.

Meanwhile, in Arizona there is a looming $1-Billion Dollars in red ink in a budget of nearly $10-Billion.  We can’t trim our way out of that because educational spending is nearly half of the budget.

And we owe the state’s schools $1.3-Billion from past efforts to grow big business on the backs of future voters.

Conservative economist Ben Stein on Fox News said, “I don’t think there is any way we can cut spending enough to make a meaningful difference. We are going to have to raise taxes on very rich people.”

Disguise it as “reversing” a 30% cut in the corporate income tax rate. Fudge it by reinstating an expired sales tax.  Call it the new Reaganomics.  We can even be honest and make those who earn more money actually pay more in taxes.

Progressive Taxation -Arizona Style

The prevailing view nationwide is that the U.S. tax system is generally progressive, meaning higher-income people and companies are expected to pay larger shares. Recent figures released by Arizona's Department of Revenue show the highest-earning 8.4 percent of individual taxpayers - those making $100,000 and more - paid 53 percent of all taxes from individuals in 2003, the most recent year available. But is that “progressive”?

Arizonans with adjusted gross income of $1 million or more, representing a mere 0.12 of a percent of all taxpayers, paid 13 percent of the total. Looked at another way, people who earned less than $50,000 represented 70.2 percent of all individual tax-return filers but paid only 19 percent of the take from individuals. But is that “progressive”?

The same pattern can be seen among corporations, where the top 1.1 percent of filers - firms with tax liabilities of $100,000 and up - accounted for 85 percent of all corporate income-tax revenue. But is that “progressive”?

These are interesting figures, as pointed out by Russ Wiles in the Arizona Republic on November 28, 2006. However, there is another way to look at the numbers. (Do you recall what Karl Rove said to Steve Inskeep of NPR before Election day, "You have your numbers; I have THE numbers.")

Check out an article by Ben Stein --Yes, THE Ben Stein-- in The NY Times of Sunday, Nov. 26, based on his interview with Warren Buffett --Yes, THE Warren Buffett. The title is "In Class Warfare, Guess Which Class Is Winning."

Stein discovered that, "Put simply, the rich pay a lot of taxes as a total percentage of taxes collected, but they don’t pay a lot of taxes as a percentage of what they can afford to pay, or as a percentage of what the government needs to close the deficit gap."

How did these two Republicans and giants of capitalism come to this conclusion? Stein explains:

"Mr. Buffett compiled a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all.

It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. Further, in conversation it came up that Mr. Buffett doesn’t use any tax planning at all. He just pays as the Internal Revenue Code requires. “How can this be fair?” he asked of how little he pays relative to his employees. “How can this be right?”

My answer: It isn't. Period.

Stein says that "conservatives were supposed to like balanced budgets. I thought it was the conservative position to not leave heavy indebtedness to our grandchildren. I thought it was the conservative view that there should be some balance between income and outflow. When did this change?

"Oh, now, now, now I recall. It changed when we figured that we could cut taxes and generate so much revenue that we would balance the budget. But isn’t that what doctors call magical thinking? Haven’t the facts proved that this theory, though charming and beguiling, was wrong?"