Fool’s Gold: Sales tax increase will cost jobs

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by David Safier

Once again, I'm in Jim Nintzel's debt for doing the heavy lifting on this one.

The Goldwater Institute has been pushing the meme that a 1 cent sales tax increase will cost Arizona somewhere between 9,000 and 13,000 jobs. The problem is, the figure is wrong, for a few reasons. The most important one is, G.I. doesn't factor in the $442.5 million in federal matching funds we'll lose through cuts to programs if the tax hike doesn't pass.

Nintzel quotes at length from a very wonky take-down of G.I.'s numbers by economist Alberta Charney at the UA Eller Institute. Her conclusion is, if the sales tax hike is defeated, the state stands to lose 13,000 jobs.

G.I.'s entire argument comes from what it calls "economic modeling," a "study" or an "economic analysis" (the term changes in each reference), conducted by the Beacon Hill Institute. Sounds like a formal, written report, filled with numbers, charts, detailed economic analysis and explanations, right? But it isn't. According to Charney,

A thorough search of the Beacon Hill website does not reveal a report for Arizona or a discussion of the model used for Arizona.

G.I. has been using this information from Beacon Hill for over a year. A friend called G.I. asking to see the "report" and was told it's not actually a formal report. There is no way to check how Beacon Hill derived its figures except for a half page table.

What is Beacon Hill? It's a conservative-to-libertarian institute out of Suffolk University which, according to its mission statement, is "grounded in the principles of limited government, fiscal responsibility and free markets." Without going further, you know what kind of conclusions the institute will come up with. Beacon Hill has an anti-tax hammer, and for them, every tax increase is a job killing nail to be pounded into the ground.

G.I. has been leaning on this information since March, 2009. I've received at least 5 separate G.I. emails referring to this economic modeling/study/economic analysis — which doesn't exist in the real world.

The job loss figure was also used in a Republican legislative power point presentation, and it's been referred to in the Arizona Republic. I'm sure it's been quoted as sacred text in countless other Republican speeches and articles.

This is G.I.'s M.O. Come up with a bogus number or factoid, then repeat it so often, it takes on the aura of fact.

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2 thoughts on “Fool’s Gold: Sales tax increase will cost jobs”

  2. Watching the Prop 100 debate the other night, I was utterly dumbfounded and extremely disappointed to listen to multiple people reference the GI number of 14,000 lost jobs if sales tax passes. Especially some guy from the university, whose pontificating was painful
    to watch. I expected a university professor to be smart and use his brain to set the record straight, so he was a major disappointment.

    I know it’s just a made up number; and I know the GI is not a honest broker of information. So to watch otherwise intelligent people spout the GI nonsense like it is normal, everyday accepted fact, was disheartening. Representatives from the press, and from our university didn’t have the smarts to smack down that number as the complete B.S. it is and finally sweep it into the dustbin of propaganda where it belongs. I actually experienced their acceptance and use of that number as an affront to educated, intelligent people everywhere.

    Now, Ana Eve Pederson was truly impressive, had admirable poise, and had a sharp, smart mind that dealt effectively with the topic and most of the nonsense from other side. Her opposition, the small business association representative was also a smart, impressive guy. Quick and knowledgeable, even though he is on wrong side of the issue. But the press and university guy embarrassed themselves, especially by spouting that GI number we all know is just pure B.S.

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