Tax Increase without Oversight Will Lead to Less Business in Arizona
TEMPE, Ariz., Nov. 17, 2020 /PRNewswire-PRWeb/
Arizona Proposition 208, also known as The Invest in Education Act, recently passed enacting a 3.50% income tax, in addition to the existing income tax, 4.50% in 2020, on income above $250,000 for single filers or $500,000 for joint filers. While the proposition claims to distribute the revenue from the 3.50% income tax to teacher and classroom support staff salaries, teacher mentoring and retention programs, career and technical education programs and the Arizona Teachers Academy, however, the lack of reform is cause for concern.
Tom Wheelwright, CPA and CEO of WealthAbility, believes that the way Prop 208 is written it will not deter businesses from moving to Arizona, but the money won’t reach the intended target. Wheelwright’s concerns include:
Where is the money going?
We can all agree that teachers deserve to be paid fairly, but unfortunately, Prop 208 does not include specific legislative oversight to ensure that the funds produced by this tax are actually going to teachers. Since it was passed, the only way to change this would by a court challenge or another proposition. There’s nothing the legislature can do to prevent administrative bloat.
Effect on Business in Arizona
The passing of Prop 208 nearly doubled Arizona’s top tax rate effectively deterring businesses to come to Arizona. While taxes may not be the determining factor for businesses looking to relocate, it would be ignorant to think that they don’t play a large role. Any savvy entrepreneur or CEO will always be looking for ways to reduce their taxes, so why would they choose to do business in what is now one of the top 10 highest taxing states in the U.S.? This in turn will cost Arizona jobs and the exponential growth that the state has seen over the recent years.
Passing a proposition without legislation sets a dangerous precedent for our state. Without legislative oversight, there’s no telling where this money is going and if it’s being used appropriately. It seems that the public has an easy time spending other’s hard-earned money even if they don’t know how it’s being spent.
Wheelwright believes that we will likely see Prop 208 go to court to be overturned. He hopes that with more education on the topic, Arizonans will find a better way to fund education in the state.
About Tom Wheelwright – Tax and Wealth Expert
Tom Wheelwright is a CPA, CEO of WealthAbility®, Best-Selling Author of Tax-Free Wealth (Rich Dad Advisors Series), Speaker, Entrepreneur and Host of 2 popular podcasts: The WealthAbility™ Show with Tom Wheelwright CPA and The WealthAbility® for CPAs Show. Wheelwright has spoken on stage on every continent to over 100k entrepreneurs, small business owners and investors. His goal is to help people achieve their financial dreams faster by permanently and legally reducing their taxes. Wheelwright is a Contributor to Entrepreneur magazine, and his work has been seen in Forbes, The Wall Street Journal, The Washington Post and on FOX and Friends, Marketplace / NPR, ABC News Radio and hundreds of media. For more information, visit https://tomwheelwright.com/ and https://wealthability.com/tom/.