Wednesday, February 25, 2009

Goldwater Institute: State on the verge of committing economic suicide

ByronBy Byron Schlomach, Ph.D.
The dreaded T-word has now entered the conversation at the capitol with lawmakers suggesting putting a "temporary" tax increase on the ballot. Any such tax increase would be in addition to the mid-year restoration of the state's property tax. That increase alone, once estimated at $250 million, would be one of the biggest tax increases in state history.

tax biteHow did we get here? Well, Janet Napolitano spent the last two years of her governorship with her head in the economic sand. None currently in leadership were involved in writing the budget that passed last June. That budget was really no budget at all because it ignored economic reality and constitutional balanced budget requirements.

Now we have people who had little or nothing to do with getting our state's finances in trouble contemplating economic suicide in order to get those finances back in order. A tax increase, however, is a little like trying to put out a fire with kerosene. Taxes discourage saving, investment, risk-taking, and innovation, and will hurt Arizona's chance at economic recovery.

Byron Schlomach, Ph.D, is director of economic policy at the Goldwater Institute.
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