Guest Commentary by John Wright: Education and Taxes

Wright
The Arizona Chamber of Commerce and
Industry along with other business interests are calling for the repeal of the State Equalization Rate
and by doing so are focusing only on a piece of the puzzle. It is looking more
like single-entry bookkeeping. Remember Enron? Taxes are but one side of the
ledger. For more news
and facts about the State Equalization Rate, click here.

Taxes are the dues we pay for
living in a civilized, prosperous society. They are our collective investment
in our future and the future of our children. Taxes should not be too high.
They should not be too low. They should be just right. They should be fair and
equitable to create the kind of future to which all of us in Arizona aspire.

Arizona’s
system of revenue generation has been dwindling for several decades and, now,
is an inequitable system taxing the poorest Arizonans at the highest rates.

For example, when we add up all the
taxes people in Arizona pay (e.g., property,
income, sales, cigarette, and gas), the poorest people in Arizona pay about $12.50 out of every $100
of their income in state and local taxes. The same figure for the richest
people, those making on the average more than $800,000 a year, is less than
$4.90. Such an inequitable system of taxation is harmful to our future economic
success. We must wake up and take another look at our tax structure.

We must also wake up to the new
economic reality. We live now in a knowledge-based global economy. Low taxes no
longer guarantee economic prosperity. Evidence shows that the top 10
“most-business-tax-friendly” states (low taxes) grew exactly at the
same rate as the bottom 10 “least-business-tax-friendly” states
(high taxes)—exactly at 4.2%. Business leaders consistently say they want
a high-quality workforce, infrastructure, and public services. An inequitable,
dwindling system of taxation undermines what business leaders say they want.

Furthermore, in the new economy,
dollar for dollar, investment in public education grows the economy more than
tax cuts and tax subsidies given in the name of economic development.
Unfortunately, public education in Arizona
is grossly underfunded. It will take an additional investment of $2 billion to
make up the current funding deficiency.

Keeping public education
underfunded is bad for Arizona’s
economy. On the contrary, additional investment in public education is good for
Arizona’s
economy. For example, the additional investment of approximately $200 million
in public education that will occur in 2009, when the suspended state
assistance property tax expires, will create at least 11,000 new jobs and add $337
million to the personal income of the people of Arizona.

The bottom line is that there are
two visions for Arizona.
In one, the state economy takes off, served by the kind of high-quality
services, including great public schools and universities, quality
transportation, and health care needed in the 21st century knowledge-based
economy, and funded by a sound and equitable system of taxation. In the other,
we fall farther and farther behind our development goals, dragged down by
deteriorating services and poor amenities funded by a revenue system that is
characterized by inequitable taxes and structural deficits extending far into
the future. Unfortunately, Arizona’s
conservative legislature and those that support their campaigns want more of
the latter.


The commentator is John Wright, President of the Arizona
Education Association.


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