EDITORIAL FOR OCTOBER 6-9, 2020
I’m CAVE MANager Paul Lotsof. If you are like most people you almost certainly believe in generosity. We all believe that generosity is a virtue especially if it is someone else who is extending the generosity and someone else who is paying the bill. When someone suggests that we be more generous we usually come up with some reason why we are generous enough already. That’s why we support what are known as sin taxes. A sin tax is a tax that someone else has to pay. Let me give you a couple examples of sin taxes: If you commit the sin of smoking you pay a stiff tax on cigarettes and other tobacco products. But if you don’t smoke you pay nothing. There’s a similar high tax on alcoholic beverages. Buy that six pack of beer and pay the tax. Skip the beer and you pay nothing.
Yet another example of a sin tax is a system that the voters of Arizona enacted in 1998. Under so called “clean elections” we have publicly funded political campaigns so that a candidate can have tax dollars pay for his advertising. In this case the money comes mostly from surcharges on traffic fines. If you don’t commit a violation the tax costs you nothing. Since we’re all good drivers and we don’t get tickets the money for the political campaigns is paid for by someone else. Sin taxes are very popular because most of us don’t have to pay them or we think we don’t have to pay them.
The latest proposed sin tax is called Proposition 208. This proposal calls for raising millions to support education but hardly anyone will have to pay the tax. In this case the sin is having a very high income that very few people are fortunate enough to have. Unless you are making a quarter of a million dollars a year or half a million a year for a joint return, the tax will cost you nothing. So on the surface Proposition 208 looks like a windfall of free money to educate the kids. Those promoting 208 say it will raise over 800 million dollars a year. The rich are forced to be generous and for everyone else the money is free.
Needless to say, the people who will pay for the generosity have some things to say about Proposition 208. They argue that rich people are the ones who invest their money in businesses that provide us with jobs. Hit them with high income taxes and they are likely to move to a state like Wyoming , Texas, Nevada or Florida where there is no state income tax. And they’ll take their jobs with them. Similarly, some economic development groups have for years been trying to lure businesses from California to Arizona and their selling point is that Arizona has lower taxes. That strategy has brought jobs to Arizona but the tactic clearly won’t work if Arizona taxes rich people at the same rate that California does.
Another argument against 208 is that people with high incomes will be able to pay expensive tax attorneys who will figure out ways to escape the tax increase. So 208 could actually yield a lot less money than its backers think the tax will deliver.
But I think that the best argument against 208 is that it is needlessly complicated. The proposed change in state law is eight typewritten pages long. The people who wrote it decide exactly who gets the money with some of it going to private schools and some to public schools, some to tutoring services, some going to training teachers and some cash going to schools for the deaf and blind. There are complex formulas that determine who gets what and we the people of Arizona have no say in how the money is distributed. That’s all determined by the people who wrote 208. As voters we have two choices: Approve the package as presented or turn it down completely. Worst of all, if 208 passes and it doesn’t go as planned the only way to change a thing is another vote of the people.
The main thing 208 has going for it is that it is a sin tax that will be paid by others and that has a lot of appeal. The big drawback is that it is complicated and we have no say in the details. It’s take it or leave it. My suggestion is leave it and vote no on 208. There are better ways to fund education including electing some new people to the state legislature.
I also suggest voting no on Proposition 207 which is about marijuana. We’ll delve into that in a few days.
I’m CAVE MANager Paul Lotsof and the opinions you’ve just heard are mine and not necessarily anyone else’s. If you’d like a copy of this editorial or you’d like to express your opinions go to the CAVE web site and select “Editorials”. We’re at CAVEFM.com. That’s CAVEFM.com.