Tuesday, February 24, 2009

Welcome to the Ehrlenmeyer Flask

*cracking knuckles*

Well, well, well, this morning's paper brought the news that post-Janet Napolitano Arizona is rapidly being converted into a lab for experimental Total Republican Policy Immersion, and I'm not sure whether we're rats or fruit flies in this scenario. The state is already looking at a budget shortfall of $2.4 billion in the next fiscal year, so the next logical step after gutting education and human services--"logical" here meaning "prescribed under conservative fiscal dogma"--is to... cut taxes! Republicans on the House Ways and Means Committee voted Monday to permanently repeal the state property tax rather than allowing it to return this year after a scheduled three-year hiatus.
And lawmakers sent out clear signals that repealing the property tax may just be the beginning of Republican efforts to cut taxes, particularly on businesses.

Committee members began debating — but did not vote on — another bill from Rep. Rick Murphy, R-Glendale, who chairs the committee. The bill would cut corporate income taxes, reduce property taxes companies pay on equipment and slash the taxes paid on capital gains.

The reasoning is as expected; Arizona's existing property tax structure is on the ouch side, hitting businesses at twice the rate of domestic property taxes and rolling equipment in excess of $65K into the assessed valuation, and so discourages businesses from moving here. And the Republican reaction is equally expected; rather than modifying the structure, they want to eliminate the property tax outright and cut the corporate income tax rate in order to lure more companies here. And this will result in an immediate $250 million shortfall for the state this year.

It's a tossup. The equipment tax is a strong disincentive for more lucrative manufacturing operations. More companies opening up shop here means more jobs. Across-the-board property tax elimination, corporate rate cuts, and a proposed whopping 57 percent reduction of corporate capital gains taxes means less revenue for the state. And our new solidly Republican state government has already shown that less revenue means zero support for education and social services beyond the stuff that's federally mandated, because they cannot for the life of them recognize any connection between the quality of public education and the quality of the jobs that will be available to graduates of the system.

The revenue loss would mean less money for education, [Tucson High teacher Elizabeth Slaine] said. And Arizona's economy won't improve unless there are people qualified to be in business.

Rep. Andy Biggs, R-Gilbert, scoffed at that contention.

"Education does not create jobs," he said. "Entrepreneurs and businesses create jobs."

Good luck building your business with people who can't read or do basic math well enough to fill out your purchase orders, Andy. I'm not sure where the entrepreneurs you're counting on will be coming from, unless you're assuming they'll all have to be lured in from out-of-state with your massive tax breaks. Hell, while you're at it, why not simply convert Arizona to a mainland offshore island economy, where no uncomfortable questions are asked of corporate masters and a permanent underclass is being readied as we speak?

No comments: