GOP insane clown posse headed down the wrong track

The GOP insane clown posse refuses to acknowledge The First Rule of Holes: "The first rule of holes, when you're in one, stop digging."– Molly Ivins.

Arizona is in the deficit hole it is in due to twenty years of GOP tax cutting that has reduced the tax base to the point that it can no longer sustain constitutionally mandated government services. You can guess what follows.

On Monday, the House Ways and Means Committee advanced the bogus-named "Jobs Recovery Act" (it is actually a tax cut package) on a 6-2 vote. House committee approves bill to cut taxes

For ideological conservative Republicans in the Arizona Legislature supply-side economics, i.e., tax cuts for corporations and the wealthy on the premise that they will invest money in business and trickle-down new jobs and grow the economy, is not so much an economic theory as it is an article of faith, religious dogma, if you will.

Supply-side economic theory has been entirely disproved and discredited over the past decade. The Bush Years Were a Lost Decade It has been a catastrophe for the nation and for the state of Arizona. Yet the GOP insane clown posse still believe it – "I believe!" – as a matter of faith. It is probably the world's first religio-economic cult.

When one believes things that are demonstrably false, untrue and disproved, it is time for a New Rule: Mental Competency Exams for Politicians. It was Albert Einstein who said that "the definition of insanity is doing the same thing over and over and expecting different results." Well, the crazy train has left the station with the GOP insane clown posse at the controls barreling down the wrong track to a certain train wreck.

Once again, anyone who still believes in supply-side economics is unserious and unfit to serve in public office. Period.

Here is what the supply-side Republicans propose to do without any analysis or economic justification to support their plan. For them, it is a matter of faith.

Arizona faces a combined $4.5 billion deficit through the 2011 fiscal year. An across-the-board income tax cut envisioned in House Bill 2250 would be phased in over four years, beginning in July 2011, House Speaker Kirk Adams, R-Mesa, chief sponsor of the plan, said. That means the cuts would have little to no impact on the state budget this year and next. House committee approves bill to cut taxes

"[T]he 10 percent cut in the individual income tax, as well as the reduction in the corporate income tax to 4.5 percent from 6.97 percent is not targeted to specific industries." Corporations currently pay a flat rate of slightly less than 7 percent. HB2250 would phase that down to 4.5 percent. House panel OKs business tax breaks | eastvalleytribune.com "[T]he measure also slashes individual income tax rates, which are on a sliding scale, across the board by 10 percent. Adams said this is necessary to stimulate business because 80 percent of all firms in this state are organized in a way so they pay no income taxes themselves, with the earnings instead passed on to owners who pay at the individual rate," i.e., small businesses.

House Bill 2250 has special programs to provide job training funds and tax rebates to firms that locate or expand in the state. But "If a company doesn't meet certain criteria, such as having a payroll of at least $2 million in new jobs within its first year, it would not qualify for various incentives, said Adams." That would exclude the 80 percent of small businesses that are the engine of job creation (small businesses have taxable income of $250,000 or less, otherwise they would incorporate).

The bill would repeal the state education equalization tax, a property tax that raises about $250 million a year. It would also reduce the rate at which business properties are taxed.

"The House bill would, over time, lower the assessment ratio on business property, used to compute how much property tax each firm owes. The figure is now 21 percent of the full cash value of land, buildings and equipment, down from 25 percent a few years ago. The bill would eventually reduce that to 15 percent." Businesses targeted for tax breaks in bill

"[R]educing the assessed valuation of businesses in a city, county or school district means the tax rate has to go up. And that burden would fall on homeowners whose land and buildings are now valued for tax purposes at 10 percent."

The bogus-named "Jobs Recovery Act" is really just an attempt by the Legislature to shirk its constitutional duty and tax obligations and pass the buck on to the counties to raise your property taxes. Higher county property taxes will more than offset the small savings you might realize from any income tax reduction. The only winners are large corporations.

Democrats on the committee rightly objected to the lack of an analysis of the fiscal impact the measure will have on the state’s general fund. GOP jobs bill sails through committee A motion to hold the bill until the fiscal analysis was complete was voted down by Republicans, who outnumber the Democrats 5-3.

Ah, but you see, when it is a matter of faith, facts don't matter. "We don't need no stinkin' analysis!"

Democratic lawmakers rightly criticized the bill for not doing anything to solve the state’s current budget deficit, which legislative budget analysts say totals about $4 billion over the next 18 months. House Democrats issued the following press release prior to the committee hearing:

Republicans' Corporate Bailout Package On The Wrong Track For Arizona

STATE CAPITOL, PHOENIX – Arizonans have watched Republican lawmakers fail multiple times to solve the budget deficit, and today Republicans’ corporate bailout package will take Arizona one step farther down the wrong track.

House Republicans’ plan to bail out big corporations and the rich while making middle-class families pay for it will be heard in the House Ways and Means Committee today at 2 p.m.

“Bottom line, this is no ‘jobs creation package’ and Arizonans know it,” Assistant House Democratic Leader Kyrsten Sinema said. “The reality is that it’s a corporate bailout package to benefit big corporations and the rich, while middle-class families foot the tax bill.”

According to Republicans’ plan, business property class assessment ratio will be reduced from 20 percent to 15 percent, meaning businesses will pay less in property tax while homeowners pay more.

Republicans also want to give away a nearly 30 percent income tax break to big corporations without a guarantee or incentive that big corporations will use it to create more jobs.

“The headquarters of a big corporate retailer, for example, located in another state like Arkansas or Minnesota, would get to decide how to use Arizona’s tax break,” said House Democratic Policy Leader Steve Farley. “It could be used for any number of things like salary raises for corporate executives who already are paid hundreds of thousands of dollars.”

Republicans also want to repeal the education equalization tax, which they failed to do last year, and which directly funds education. Education took the biggest cut in Arizona history last year, and this year, Gov. Jan Brewer is proposing $750 million more in cuts to kids’ classrooms.

Republicans’ plan also appears to violate the gift clause in the state constitution, by giving big corporations money just to move to Arizona, when that money could fund schools.

“This is more about Republicans bailing out big corporations and the rich and giving away middle-class Arizonans’ hard-earned cash,” House Democratic Whip Chad Campbell said. “With Republicans’ corporate bailout package, corporate Arizona is getting a second Christmas. Clearly Republicans are just pushing Arizona further down the wrong track.”