by AZ Free Enterprise Club | Apr 17, 2022 | Opinion
By the Arizona Free Enterprise Club |
It is no secret that the Club is critical of special interest tax credit programs that distort our tax code and pick winners and losers in the market. Though a few of these tax credits have been enacted by the legislature over the years, there is one program on the books that has grown into the billions and has successfully evaded any real scrutiny: the Research and Development tax credit program.
The Research and Development tax credit program piggybacks off the federal program and operates under the premise that it will increase the amount of investment corporations make in Arizona on research and development. The program is very generous, allowing corporations to claim a 24% credit on the first $2.5M in qualifying expenses and an additional 15% up and above the $2.5M. If a corporation effectively eliminates their tax liability, they are allowed to carry forward the excess credits for up to 10 years. For businesses with fewer than 150 employees, the pot is even sweeter…
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by Dr. Thomas Patterson | Apr 15, 2022 | Opinion
By Dr. Thomas Patterson |
Loma Verde, California is building a $24 million recreation center with a pool. Forest Lakes, Minnesota is getting a $1.5 million golf clubhouse, while San Antonio is purchasing a $15 million theme park.
These may seem frivolous when rampant inflation is threatening, but never mind, they’re all “free,” a synonym for “paid for by the feds.”
America is awash in cash. Hundreds of other communities are enjoying similar goodies. States in no fiscal difficulty whatsoever have been given billions in budget boosts.
Checks for thousands of dollars have gone to citizens not even claiming to be in need. Millions of Americans receive enough government cash that they can now avoid the inconvenience and degradation of work.
These are the outcomes of President Biden’s $1.9 trillion-dollar American Rescue Plan, although the link to COVID may seem obscure to some. But the bigger point is that our governing culture today sees government spending as a positive good, which may be prompted by any excuse or none at all.
This is a continuation of the age-old argument over the role of government. For those who see government as a benign force that can efficiently, by use of its taxing power, address the common welfare and assure equitable outcomes, every dollar transferred from private to public hands is a positive.
Moreover, Big Government clearly increases the power and prestige of government officials. It creates beneficiaries highly likely to vote for those politicians who “cared” enough to send Other Peoples’ Money their way.
Vastly expanded government has also affected the attitudes of Americans toward the role of government in their lives. To an extent unthinkable to earlier generations, Americans now assume the federal government will take responsibility for such matters as healthcare, education, childcare, and aging parents.
The founders of our Constitution would not be pleased. Their original intent was to create a more just and independent society than the autocracies which had plagued mankind for millennia. Regrettably, Americans have blandly looked on while much of their birthright has been stolen.
Much of the recent confiscation of our nation‘s economic output has come under the pretext of COVID spending. But remember that the COVID financial crisis was a self-inflicted wound. The lockdowns were unprecedented and proved ineffective as a pandemic response strategy, but they precipitated a huge expansion of government power.
America has so far spent $6.4 trillion in COVID relief bills. The $1.9 trillion in the 2021 American Rescue Plan alone was enough to buy every COVID vaccine, ventilator, and hospital in existence. But much of the money went to beyond-obvious pork and to support Democratic political constituencies.
New York, among others, is reportedly sitting on $12.7 billion in unneeded COVID funds that they hope will revert to “unassigned” dollars. The money was pushed out so carelessly that the Labor Department IG estimates $163 billion of the $872 billion in COVID unemployment funds were dissipated in fraud.
The consequences of all this unnecessary spending are predictable and enormous. In 2009, then-President Obama warned against continuing deficits when the debt had doubled from $5 trillion to $10 trillion under his predecessor.
It was $20 trillion by the time he left office, stands at $30 trillion today, and will reach $45 trillion by 2032 according to Biden’s own budget projections.
But trifles like stifling debt and lack of need can’t suppress the political urge to spend. With COVID receding and no extraordinary expenses pending, Joe Biden’s new budget proposal rings in at $5.8 trillion, fully 31% higher than in 2019.
Federal revenues rose 18% in 2021, then 26% this year, but it’s not enough. Biden‘s $2 trillion projected deficit means the debt will have climbed $7 trillion in just the last three years. Multi-trillion-dollar deficits have effectively been normalized.
It could be worse. We narrowly escaped passage of the $3.5 trillion Build Back Better boondoggle. Yet now Biden has the gall to demand $30 billion more for COVID expenses when at least $500 billion from the last COVID relief bill is still unspent.
The mindless, immoral imperative to spend more knows no bounds. Time is running out to reverse course. When will we come to our senses?
by Matt Salmon | Apr 14, 2022 | Opinion
By Matt Salmon |
If Tax Day were held in early November instead of April 15th, I doubt Republicans would lose a close election again.
The financial squeeze of the Internal Revenue Service’s (IRS) filing deadline always feels personal. But it especially hurts this year. On top of President Joe Biden’s proposal to hike taxes on everything from capital gains to married couples, families across the country are suffering from another hidden tax: historic inflation.
The nationwide Consumer Price Index (CPI) increased by 7.9 percent as of last month. In Arizona, where the average price of gas now exceeds $4.60 per gallon, the Phoenix area is suffering from a CPI increase closer to 11 percent. Wherever you look, workers’ paychecks just aren’t going as far as they used to.
It’s wrong.
Florida and Texas have it right. People deserve to keep the money they earn. That’s why, if I’m elected as Arizona’s next governor, I plan to eliminate our state’s income tax once and for all.
Republicans need to stay on offense. Democrats in the Grand Canyon State dream of turning us into California. They have been aggressive in their efforts to do so, from pushing a 78 percent hike on small businesses at the state level to ramping up tax and fee increases at the local level.
Conservatives cannot allow ourselves to be pacified by simply stopping these bad ideas. We should feel equally comfortable moving in the opposite direction. And so far, thanks to smart policymaking by Governor Doug Ducey and our state legislators, we have been successful in doing so.
Over the past few years, Arizona has indexed the state income tax rates to inflation; conformed the state income tax to the Internal Revenue Code after passage of the Tax Cuts and Jobs Act; exempted military retirement from the state income tax; and passed into law a 2.5 percent flat tax representing the single largest tax cut in our state’s 110-year history.
Along the way, Democrats repeatedly warned that further reductions in the income tax would plunge us into turmoil and bankrupt government services. In reality, our state budget is in better shape than ever, with $5.27 billion in projected surplus revenue this year and plenty of room to return money to taxpayers.
Our economy is booming, too. We experienced the third-fastest economic recovery in the United States coming out of the pandemic, and we are expected to add more than 720,000 jobs over the next ten years.
These are the fruits of freedom. It is well past time to go further.
By eliminating the state income tax, we will create a business environment so welcoming to new investment that we’ll be beating businesses and entrepreneurs off with a stick. These job creators won’t pay any income tax. But they will pay property taxes, sales taxes, and more—and our tax revenues, along with our economy, will continue to grow hand-in-hand.
The bottom line is that hardworking families deserve to keep the money they earn, especially in inflationary times like these when the American Dream feels so far out of reach.
Zeroing out this tax—and ringing in Arizona’s final Tax Day—is not just the smart thing to do. It’s the right thing to do. I am the only candidate for governor who has endorsed it. And, as our next governor, it’s exactly what we will do.
Matt Salmon, a former U.S. representative and co-founder of the Freedom Caucus, is a Republican candidate for governor of Arizona.
by AZ Free Enterprise Club | Apr 10, 2022 | Opinion
By the Arizona Free Enterprise Club |
“Punish the rich” tax proposals never seem to go out of style—at least for the Democrats. In the 2020 Democratic presidential primaries, it was all the rage for Senators Elizabeth Warren and Bernie Sanders. But after they both failed in their White House bids, they decided to double down on their wealth tax with an ill-conceived proposal on Capitol Hill in early 2021.
So far nothing has come of that. But enter President Biden.
At the end of March, Biden unveiled his Billionaire Minimum Income Tax proposal, and it’s every bit the disaster that you would imagine it to be.
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by AZ Free Enterprise Club | Apr 3, 2022 | Opinion
By the Arizona Free Enterprise Club |
For years now, we’ve heard the same old talking points from the left when it comes to our state’s schools. It always goes a little something like this:
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- Education is underfunded in Arizona…
- Teachers aren’t paid enough…
- We need to raise taxes to pay our teachers more…
Do these lines sound familiar? They should. Anytime a new proposition is rolled out to voters, teachers’ unions and other liberals push this same narrative. We heard it when they campaigned for Prop 208 a couple years ago. And despite the fact that the Arizona Supreme Court struck down Prop 208 because Arizona is already funding schools at historic levels, we continue to hear it from Red4Ed and others as they target the state’s $1.8 billion tax cuts.
That’s what makes the latest news out of Mesa Public Schools (MPS) even more outrageous.
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by Dr. Thomas Patterson | Apr 1, 2022 | Opinion
By Dr. Thomas Patterson |
Biden’s bungling of the Iranian nuclear negotiations may well go down as the most consequential error in the history of statecraft. He has granted concession after concession to coax Iran into doing what they want to anyway, which is to revive the nuclear treaty (JCPOA) under which they would eventually acquire full nuclear capability.
The foolishness of equipping Iran’s ruling mullahs with nuclear arms is nearly beyond comprehension. These are fanatically religious Muslims, not like the Iranian people or the friendly neighbors most Americans meet. Their heartfelt belief is that life’s only purpose is submission to Allah, and he has already dialed in his directions.
The entire world must eventually become a Muslim caliphate. Take your time but use any and all means necessary to achieve successful jihad, including converting or killing all those under your control, lying when needed, and actively undermining host nations. Weapons of mass destruction would be the ultimate implement.
Yet the JCPOA negotiated with Iran by the Obama administration was full of concessions and loopholes. Iran was theoretically banned from enriching uranium to weapons grade, but enforcement was lax, inspections had to be announced beforehand, and sanctions for violations were ignored.
Worse, the agreement included a 10-year sunset after which all limits were off. The Obama administration was so eager to accommodate (remember the $1.9 billion cash on pallets shipped secretly to seal the deal?) they essentially created a framework assuring Iran’s future nuclear capability.
Fortunately, the JCPOA was never ratified by the Senate, so Trump was able to cancel it, which he did. Progress in nuclear development was slowed. Tough economic sanctions were imposed for violations, crippling Iran’s economy.
By the conclusion of Trump’s tenure, the Iranian people were growing restive and were protesting. Iran’s oppression against both America and their regional neighbors was stymied for lack of funding.
But Biden and his handlers could only see the hand of Trump in the success and therefore it had to be reversed. Now Biden is frantically conceding away, preparing to sign an agreement even worse than Obama’s infamously one-sided pact.
Biden’s proposed deal would intentionally weaken the enforcement structure needed to prevent Iran’s nuclear program development. Their illegal infrastructure housing the program would be effectively ignored.
Biden would also lift the economic sanctions in place, giving Iran $100 billion sorely needed to reboot its terrorism program. Propping up Iran’s economy is a huge favor to the ruling autocrats, too.
Almost unbelievably, Biden is assuring that Russia is also a beneficiary of the deal. Yes, that Russia, the one the whole free world is trying to weaken and punish to end their brutal, unprovoked assault on Ukraine.
Biden effectively put Russia in charge of the negotiations, where they serve as go-between, since the Iranians refuse to negotiate directly with us. In turn, Russia is demanding that Russian – Iranian trade be exempted from the sanctions imposed in response to the Ukraine invasion. Russia will effectively have a “sanctions-aversion hub” so its atrocities can continue.
Further, Biden is apparently offering an “inherent guarantee,” providing that if there is a claimed breach of the agreement by future administrations, Iran can resume full-scale development of their military nuclear capability. One way or the other, Joe will ensure their nukes.
Finally, the Iranian Revolutionary Guard Corps is the agent for Iran’s long running proxy war which has included hundreds of terrorist attacks on military bases, civilians, and ships at sea and killed hundreds of Americans. Biden‘s brainstorm is to rescind the IRGC terrorist designation, limiting the rights of victims, including the right to sue for damages.
Over 1,000 American Gold star families have written Biden urging him not to further empower the terrorists who killed their family members. No response has been received.
For all these concessions, Biden has received nearly nothing. Instead, Iran keeps “moving the goalposts,” testing the limits of his gullibility. Observers are reportedly astonished at the Iranians’ improbable success.
Our leadership’s weakness, incoherence, and appeasement are leading us into an extremely dangerous position. An unhinged, fanatical regional power that chants “Death to America” will soon have nuclear capability and empowered allies.
Where is Ronald Reagan when we need him?
