Issue Position: Limit Government Spending and Taxes

Issue Position

Unlike the federal government Arizona must balance the state budget every year and it must do this by controlling the spending or adjusting the revenue (taxes and fees) since it can not print money. Starting in 1980 the Arizona Constitution limits the states spending to a maximum of 7.41 percent of personal income. The actual current rate is 5.54 percent and has never reached the maximum allowed. If the people of the state are doing well the state spending can go up, however if the income level goes down the spending must follow accordingly.

Income tax in Arizona is a progressive tax based on income. There are 5 brackets ranging from 2.5% ($10,000 income) to 4.54% ($150,000 income). I believe that Arizona should join the many states who are eliminating their state income tax and replacing it with a fair tax based on consumer spending. Arizona should no longer tax production, but rather tax consumption. This would insure that even if money is obtained illegally it will still be taxed when spent. I estimate that this fair tax would be around 6 percent with certain items such as food being exempt.

Sales tax (Arizona Transaction Privilege Tax) is set at 5.6 percent at the state level which ranks 28th in the country. Each county then adds on their rate which ranges from .5 percent to 1.125 percent. Then each municipality can tack on their rate. The average rate paid in Arizona is 8.17 percent ranking 11th highest in the country. The state does limit the maximum tax rate a municipality can apply to 5.3 percent and the average in Arizona is 2.5 percent. The 8.17 percent average is too high and perhaps the maximum levels that the counties and local municipalities can apply should be adjusted.

As a state, Arizona does not apply a property tax, that is done at the county and local levels and the rate varies in each county and municipality. I do not see a need to change this at this time. If any change is needed it may be to include a maximum rate not to be exceeded.

In summary my tax policy would be to eliminate the state income tax and replace with a fair consumption tax exempting items such as food, clothing, medical care, prescription drugs etc. Counties and local municipalities should have a maximum sales and property tax rate.

Source