by David Safier
I've never heard any progressives say they're against increasing the amount of money spent per student in Arizona. Everyone knows our per student spending is at rock bottom among the states, thousands of dollars below average. But some progressives oppose the Quality Education and Jobs Initiative which would increase education spending by close to $600 per student — we'd still be at or near the bottom in national per student spending, even with the increase — because it's a sales tax, and sales taxes are regressive, period. End of discussion.
But the discussion shouldn't end there. Our children deserve a closer look at the issue before supporters of education reject our best chance for improving our young people's educational prospects.
Agreed, sales tax is regressive, placing the burden on everyone who buys taxable items regardless of income. Agreed, if it were possible in this state, tax loopholes should be closed and income taxes, which are a third lower now than they were a few decades ago, should be raised — the emphasis should be on raising them on the rich — and a considerable portion of the increased revenue should go toward education. But it ain't gonna happen in the near future, folks, and meanwhile our children are getting cheated out of educational opportunities because our spending on their educations is shamefully low.
So let's see what the one cent sales tax renewal will mean for low income Arizonans, who are the ones progressives are rightly concerned about.
No one in Arizona will pay a penny more in sales tax than they're paying now if the initiative passes since it will kick in when the current one cent sales tax ends. It's a renewal, not a new tax. The only difference is, about 80% of the sales tax revenues will be added to the current spending on education.
So the question is, how much does a one cent sales tax cost people with low incomes? The answer is, if someone makes between $30,000 and $40,000 a year, it will cost about $6.50 to $8 a month. That amount is lower for people with lower incomes. I understand, any amount of money is significant when your income is low, and low income people shouldn't be shouldering the burden which higher income people can and should carry. But we're talking less than $10 a month to add close to $600 per year to each child's education. It may make purists feel righteous to proclaim, "No! Not a penny more in sales tax!" But my feeling is, you shouldn't make children bear the burden of an ideological battle when the stakes are so high for the children and comparatively low for the taxpayers you're trying to protect.
HOW I CAME UP WITH MY SALES TAX FIGURE: A substantial portion of our incomes is spent on nontaxable items like rent/mortgage payments, utilities, food, car payments, loan payments, etc. How much does that leave in items where we pay sales tax? I used the IRS Sales Tax Deduction calculator as a reasonable approximation. I plugged in a Tucson family of 4 with a $30,000-40,000 income. The result was $862 spent in sales tax per year at a 9.1% rate, or $94 per 1%. That's $7.83 per month. Plugging in different family sizes gave me the $6.50-$8 range.
While the IRS figure may not be absolutely accurate, it's a reasonable figure which helps puts the sales tax argument in perspective.
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Bob, Your points are very good and progressives should be concerned about our increasing reliance on regressive sales taxes. Our three-legged revenue stool, i.e. income, property and sales taxes is out of whack in Arizona. I think you are right that we need to raise the issue of unfairness. But what’s a progressive to do in this atmosphere?
I agree with David that the benefit to lower income families by the increase in school revenues weighs in favor of the added sales tax. It’s not the way it should be. But given our political reality and the reality that individual kids have very few years to obtain these opportunities, I support a “noisy vote.” Support the initiative, but continue with the message. I live in Arizona in 2012. It is demoralizing and we all struggle with how we can live in this madness. I would rather live in an Arizona that approves continuing the 1 cent tax than votes it down. That might be the last straw.
No, David, that’s exactly what happened. First, progressive taxes (income, corporate income, and inheritance) were reduced, then education funding was cut because the revenue wasn’t there, then a sales tax was enacted to restore the funding. So the net result is that we swapped progressive taxes for regressive taxes. We may have had no choice but to agree because the conservatives held our kids’ education hostage. Remember, I said I struggle with this issue; I didn’t say I disagreed with you. If you focus on the immediate issue — education funding — and it’s ok to do that, you’re right. But if you look at the larger picture, the bully stole our lunch money here and got away with it, and that should trouble us.
Another point, Bob. This isn’t a replacement of one tax with another, where a progressive tax is eliminated and a sales tax is put in its place. This is value added. It adds money for education on top of what the legislature budgeted for in 2011 and 2012. In a world of tradeoffs and compromises — which is all we progressives get in Arizona — this is one of the better deals.
Bob, I understand the point but underfunding education is more dangerous in my view. When we cannot get the legislature changed to reflect a more just tax code than we have to do what we can.
I struggle with this issue, because I think it’s a bit more complicated than David puts it. Prior the passage of the sales tax initiative, there were cuts in the state income tax for rich individuals and corporations. Arizona also abandoned the state inheritance tax when the credit for state inheritance taxes at the federal level was eliminated. So, what’s happened in the larger picture is that we’ve replaced taxes that impact the wealthy with taxes that impact the poor and middle class. And I think it sets a dangerous precedent for progressives to be submissive in policy choices that are allowing more and more wealth to flow to the top.
A couple of points:
Progressives (and most fair-minded people) value public education and fully funded public schools. We think the responsibility for ensuring that all children have access to high quality educational opportunities lies with our governmental entities. Our Republican controlled state government is incapable of doing its job in this area, so the sales tax is all we have.
The corporatists and extremists in the Legislature have fought tooth and nail to keep the sales tax off of the November ballot. Therefore, It must be be a step in the right direction for Arizona’s school children and a better quality of life for all Arizonans, not just the privileged few for whom the AZ GOP is working.