Opinion: Proposition 208 is an extreme proposal with more pitfalls than promise, that deepens the divisions in our society and puts the state’s economy at risk.
Education funding has, rightfully, dominated Arizona’s political and fiscal attention in recent years. But Proposition 208, the Invest in Education Act, goes way too far. (Photo: The Republic)
Starved for years, Arizona schools remain undernourished.
The state has among the largest class sizes in the country, a nation-worst student-counselor ratio of more than 900 to 1, and districts short of nurses, librarians, aides and other support staff.
The crisis is most evident in the continued shortage of certified teachers in classrooms. A survey of schools document more than 1,700 positions that remain unfilled this year alone.
Proposition 208 promises to change much of that, by imposing a 78% tax increase on individual income above $250,000 (and household income above $500,000). It raises the top marginal tax rate from 4.5% to 8%.
An architect of the plan says passage of the ballot measure would mean reduced class sizes, diminished teacher shortage and markedly improved student achievement.
We wish it were so.
Proposition 208 puts our state’s economy at risk
Because Proposition 208 is not the solution. Far from it.
It is an extreme proposal with more pitfalls than promise, that deepens the divisions in our society and puts the state’s economy at risk.
The ballot initiative won’t generate the $940 million backers project.
An analysis by the Joint Legislative Budget Committee, a nonpartisan office, puts the figure closer to $827 million. And even that estimate comes with caveats that could further reduce actual revenue.
The tax increase threatens Arizona’s economic well-being by targeting a segment of taxpayers who create and sustain jobs.
A study by the Goldwater Institute estimates that more than half of the roughly 90,000 tax filers affected by the new tax are operators of small businesses — the backbone of our economy. The researchers project that tens of thousands of jobs and about $2.4 billion in taxes would be lost over the next decade if Proposition 208 passes.
Businesses’ response won’t benefit Arizona
Proponents of 208 argue that the tax hit on small business is manageable, and considerably less for mom-and-pop operations that barely meet the threshold. But a successful 208 will draw imitators, special-interest groups that will want higher-income earners to bear the burden of their pet cause, knowing you can get middle- and lower-income voters to support big-ticket initiatives that won’t cost them a dime. Pretty soon we will be punishing the job creators in our community and they will exercise their options.
If you don’t believe that, pay attention to the otherwise tax-friendly Democratic governors of New York and California who are pushing back against the latest efforts to tax the rich in their states.
Even if you question the specific estimates on Proposition 208, there’s no argument that the big tax hike will dampen growth. Businesses use capital to reinvest, including pay and benefits to keep workers