Katie Hobbs Tried to Increase Arizona’s Tax Agency, Like Biden Just Did

Katie Hobbs Tried to Increase Arizona’s Tax Agency, Like Biden Just Did

By Corinne Murdock |

During her last year in the State Senate in 2018, Democratic gubernatorial candidate Katie Hobbs backed a bill to add 131 new tax auditors, managers, and staff to the Arizona Department of Revenue (ADOR) using $8.3 million in state funds. At the time, Hobbs was the State Senate’s minority leader.

Throughout her gubernatorial campaign, Hobbs said she would lighten the tax process burden for the working class if elected. Hobbs also pledged to cut income taxes for 800,000 families if elected governor. 

Additionally, Hobbs promised that working-class Arizonans wouldn’t pay “a center higher” for her economic plan, nor would they face unnecessary tax burdens.

Hobbs’ proposed plan to increase ADOR was similar to the Biden administration’s recent accomplishment: expanding the IRS. In August, Congress voted to increase the size of the IRS by about 87,000 agents through the Inflation Reduction Act (IRA), a repackaged version of President Joe Biden’s Build Back Better (BBB) Act. Republicans decried the provision as a weaponization of the IRS that would cause disproportionate harm to the working class. Democrats dismissed those concerns, insisting that the IRS would only target the wealthy not paying their fair share of taxes, and that the IRA would mitigate inflation.

Last year, over 50 percent of all IRS audits targeted taxpayers making under $75,000 a year, which applies to about 171.6 million Americans (52 percent). About 25 percent of IRS audits applied to taxpayers making between $75,000 to $200,000, which applies to about 118.8 million Americans (36 percent).

In all, 75 percent of audits may apply to the 290.4 million Americans that comprise 88 percent of the population (about 330 million).

The bill that Hobbs cosponsored in 2018, SB1324, proposed the addition of two corporate income tax audit managers, 28 corporate income tax auditors, two transaction privilege tax managers, 28 transaction privilege tax auditors, two transaction privilege tax license compliance staff managers, 18 transaction privilege tax license compliance staff members, 40 tax collectors, and 11 support staff members.

The bill died quietly, having never received a vote in any committee. Its House companion, HB2137, experienced the same fate. 

At the time, Governor Doug Ducey expressed a desire to expand ADOR — but by 25 tax collector positions that had been eliminated several years prior, about 80 percent less than what HB2137/SB1324 proposed. Ducey was looking for ways to make up about $83 million in lost audit revenue. 

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.

It’s Time to Deal with Politicians Who Keep Bringing Us Massive Needless Spending Bills

It’s Time to Deal with Politicians Who Keep Bringing Us Massive Needless Spending Bills

By Dr. Thomas Patterson |

Manchin and Sinema had a chance to go down in history as heroes. They courageously withstood withering criticism to save the republic from trillions of dollars of inflation-fanning intergenerational theft.

But finally, they fell for the oldest trick in the book—the “dad can I have a pony” swindle, traditionally practiced by clever youngsters who were willing to settle for a puppy in the first place. Exhausted by the mental energy required to resist intraparty pressure and not wanting to be responsible for poor election outcomes, they caved.

Manchin and Sinema supported the Inflation Reduction Act for $740 billion after sinking (again, thank you) the original $3.6 trillion version.

But what they got was possibly the most deceitful bill in the history of bills. The “IRA will reduce the deficit by $300 billion,” claimed huckster-in-chief Joe Biden. “And we’ll do it without raising taxes a penny on those making less than $400,000 per year.”

Are you joking? Let’s start with the IRS, which received an $80 billion spending boost, an amount the Treasury Department reported would result in 87,000 new FTEs, mostly auditors and examiners.

That’s bad news for the middle class. Only 1.8% of American taxpayers earn more than $400,000 yearly. It’s inevitable that the other 98.2%, who make about 75% of the total income, will also receive increased scrutiny.

The only purpose of hiring an army of new auditors would be to increase collections. Anyone familiar with IRS audits knows that even taxpayers who have done no wrong often capitulate to aggressive harassment. The bottom line is that the Congressional Joint Committee on Taxation estimates that 70% to 90% of the money raised from unreported income would likely come from those making less than $200,000 per year.

The bill writers, sensing the problem, added this gem: “Nothing in this section is intended to increase taxes on any taxpayer or small business with a taxable income under $400,000.”

Get it? Nothing here provides actual protection to any lower income taxpayers. Instead, the party of good intentions is attempting to avoid accountability while claiming any unfortunate outcomes won’t be their fault.

The Inflation Reduction Act, it is now well established, will not reduce inflation and won’t reduce the deficit either, according to the bipartisan Joint Committee on Taxation. Instead, all of us will pay for this boondoggle 1) by forking over more money to the IRS (see above) 2) through the effects of the new 15% corporate minimum tax passed on to workers and consumers and 3) through another government spending spree which will (again) be inflationary. Even Bernie Sanders gets it this time.

But the damage doesn’t stop there. As Steve Moore recently noted in the Wall Street Journal, the IRA will transfer $250 billion from Big Pharma to Big Climate.

Bad idea. Pharmaceutical companies spend $100 billion yearly on R&D, bringing us lifesaving and misery-reducing drugs which have, among other benefits, reduced death rates from cancer and heart disease by half in the last 50 years.

The IRA price controls will inhibit innovation with a resulting cost in lost years of life estimated to be 30 times that from COVID, in addition to the increased human suffering and economic losses.

The climate change funds will go mainly to subsidies of wind and solar, which after decades of “startup” funding, produce 7% of America’s total energy. They’re not only unreliable but expensive too. A University of Texas study showed subsidies per megawatt hour of electricity range from 50 cents for coal up to $43 to $320 for solar. Yet we’re going to spend $380 billion more to chase the chimera of avoiding mostly inevitable climate change by vastly reducing our quality of life.

Americans deserve better governments than this. Passing trillion-dollar spending bills for no essential reason has become the new normal.

It’s tempting to feel helpless, but what we can do is vote smarter. For starters, Arizonans should remember this in November: Mark Kelly was a tie-breaking vote on the Inflation Reduction Act. With just 51 votes, it couldn’t have passed without him.

He campaigns as a bipartisan centrist but votes like a socialist. It’s time for us to wise up.

Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.