.
. WHEN
. WHEN HE
. WHEN HE RAN FOR GOVERNOR WAY BACK IN 2014, CANDIDATE DOUG
SEA PLEDGED TO GET ARIZONA'S
INCOME TAX RATES QUOTE AS CLOSE
TO ZERO AS POSSIBLE WITH JUST A
YEAR AND A HALF LEFT OFFICE,
GOVERNOR DUCEY HASN'T GIVEN UP.
THE CAPITAL HAS BEEN BUZZING
FOR WEEKS ABOUT A REPUBLICAN
FLAT TAX ALL INCOME EARNERS
WOULD PAY THE SAME INCOME TAX
RATE.
IT WILL BE THE MOST SWEEPING
CHANGE TO OUR TAX CODE IN YEARS
.
THE IMPACT SPREAD FAR AND WIDE.
JOINING US THERE, JULIA LEE,
COMMUNICATIONS CONSULTANT AT
ROUGHLY UNCOMFORT AND PAUL
BENTS SENIOR VICE PRESIDENT FOR
RESEARCH AND STRATEGY AND THE
POLLING GUY AT HIGHGROUND
CONSULTING HERE IN PHOENIX.
AND A REMINDER AGAIN MONDAY IS
TAX DAY.
GET YOUR TAXES IN ON TIME.
PAUL, JUST A QUICK START WITH
YOU.
A DISCLOSURE YOU ARE INVOLVED
IN A GROUP THAT'S INVOLVED IN
THE FLAT TAX.
SURE.
WE'VE DONE A LOT OF WORK WITH
THE LEAGUE OF CITIES AND OTHER
MUNICIPALITY AND LOCAL
GOVERNMENTS THROUGHOUT THE LAST
FEW YEARS AND I CAN TELL YOU
THAT THERE IS A LOT OF CONCERN
WHEN IT COMES TO THE FLAT TAX
AND WHAT IT WOULD MEAN BECAUSE
QUITE FRANKLY IT WOULD BE THE
LARGEST TAX CUT TO LOCAL
GOVERNMENT IN STATE HISTORY AND
THAT'S ONE OF THE IMPACTS AND
WE'RE JUST I WANT TO GET IT ON
FOLKS RADAR RIGHT NOW BECAUSE
YOU KNOW, I THINK I TEASED IT
EARLIER BY SAYING THIS COULD
PASS IN THE MIDDLE OF THE NIGHT
.
PAUL, YOU'VE BEEN AROUND THE
CAPITAL FOR YEARS.
HOW DOES A PROPOSAL YOU KNOW
OF THIS SIZE, THIS MAGNITUDE IN
THIS COMPLICATED HOW CAN THAT
POSSIBLY JUST PASS IN THE
MIDDLE OF THE NIGHT WITHOUT
MUCH PUBLIC DEBATE?
ONE OF THE THINGS FOR YOU TO
REMEMBER IS THAT ONE OF THE
MOST IMPORTANT THINGS THAT THE
STATE GOVERNMENT AND
LEGISLATURE DOES IS SET A
BUDGET.
BUT MOST OF THE BUDGET
NEGOTIATIONS HAPPEN BEHIND
CLOSED DOORS.
IT'S MOSTLY SETTLED AHEAD
OF TIME AND IT'S ROLLED OUT AS
A BUDGET PACKAGE AND VOTED ON
FAIRLY QUICKLY.
AND SO THERE'S A LOT
OF NEGOTIATIONS GOING ON BEHIND
THE SCENES RIGHT NOW AND I
SUSPECT BY THE TIME THAT THE
PACKAGES ARE INTRODUCED THAT IT
WILL MOSTLY BE SETTLED AND THAT
THEY WILL BE DECIDED UPON.
SO SOMETHING LIKE THIS HAS BEEN
IN THE WORKS FOR A WHILE.
IT'S ONE OF THE GOVERNOR'S TOP
PRIORITIES AND SO THAT'S IT'S
BEEN BANDIED ABOUT YOU MIGHT
NOT HAVE HEARD IT PUBLICLY BUT
IT'S DEFINITELY HAPPENING
BEHIND CLOSED DOORS RIGHT NOW.
OK, LET'S PUT SOME DETAILS ON
THIS AT LEAST THE DETAILS AS WE
KNOW THEM RIGHT NOW AND AS YOU
JUST SAID, IT'S SUBJECT TO
CHANGE CURRENT INCOME TAX RATES
ARE PROGRESSIVE FROM TWO POINT
SIX PERCENT FOR MARRIED COUPLES
EARNING UP TO FIFTY THREE
THOUSAND DOLLARS, UP TO 4.5
PERCENT FOR PEOPLE EARNING MORE
THAN THREE HUNDRED AND EIGHTEEN
THOUSAND DOLLARS.
THE PLAN NOW CIRCULATING WOULD
CREATE A SINGLE 2.5 PERCENT TAX
BRACKET PHASED IN OVER SEVEN
YEARS.
THE LOST TAX REVENUE WOULD NOT
BE BACKFILLED BY A SALES TAX
INCREASE OR AS FAR AS WE KNOW
ANY OTHER TAX INCREASE.
AN ESTIMATED ONE POINT FIVE
BILLION DOLLARS IN LOST REVENUE
BECAUSE OF THIS.
JULIE, WHERE DO YOU SEE THE
IMPACTS OF A FLAT TAX?
WELL, FIRST AND FOREMOST I
THINK REPUBLICANS ARE GOING TO
BE THE ONES TO DO EXACTLY WHAT
THEY SAID THEY DIDN'T WANT
DEMOCRATS TO DO, WHICH IS TO
DEFUND THE POLICE BECAUSE IF
YOU'RE TALKING ABOUT THIS KIND
OF MASSIVE TAX CUT TO CITIES
AND TOWNS AND THIS WOULD BE A
MASSIVE TAX CUT, THE CITIES AND
TOWNS YOU'RE TALKING ABOUT
THOSE CITIES AND TOWNS HAVING
TO CUT NECESSITIES LIKE POLICE,
LIKE FIRE, LIKE LIBRARIES MUCH
THE WAY THEY HAD TO DURING THE
GREAT RECESSION.
MANY OF THESE CITIES AND TOWNS
ARE JUST GETTING BACK TO
PRERECESSION TIME AND NOW
YOU'RE TALKING ABOUT THE STATE
PUTTING THEM IN A SITUATION
WHERE THEY'RE GOING TO HAVE TO
GO BACKWARDS YET AGAIN.
THEY WILL LIKELY HAVE TO CUT
THESE SERVICES.
THEY WILL LIKELY HAVE TO PUT
YET ANOTHER HIRING FREEZE ON ON
POLICE AND FIRE.
THEY WILL LIKELY HAVE TO CUT
SOME OF THE PROGRAMS THAT
THEY'VE BEEN CREATING SUCH
INTERVENTIONS FOR MENTAL
HEALTH.
SOME OF THE PROGRESSIVE THINGS
THAT THEY'VE BEEN TRYING TO DO,
YOU KNOW, THEY MAY EVEN HAVE TO
IMPLEMENT A FOOD TAX AGAIN LIKE
THEY HAD TO DURING THE GREAT
RECESSION JUST TO BALANCE THEIR
BUDGET.
I MEAN THIS IS A VERY SERIOUS
PROPOSAL IN ADDITION TO THAT,
WHAT'S IT GOING TO DO TO 08?
OK, WE'LL GET TO THAT.
GIVE PAUL AN OPPORTUNITY TO
JUMP IN.
AND PAUL, I'LL ASK YOU TO ARGUE
THE OTHER SIDE BECAUSE IT IS
HEY, FLAT TAX IS FAIR AND FLAT
TAX IS GOOD FOR THE ECONOMY
MAKES US MORE COMPETITIVE WITH
PLACES LIKE TEXAS, FOR EXAMPLE
.
DO YOU SEE THOSE ARGUMENTS?
I DEFINITELY SEE THOSE
ARGUMENTS.
I'M SURE THEY APPEAL TO OUR
REPUBLICAN LEGISLATORS.
I SUSPECT THAT THIS PROPOSAL
WOULD BE VERY POPULAR AMONG
REPUBLICANS AND PROBABLY LESS
SO AMONG UNAFFILIATED VOTERS
AND DEFINITELY LESS SO AMONG
DEMOCRATS.
I THINK THE BIG CHALLENGE THAT
THEY HAVE IS THAT LOCAL
GOVERNMENT WHEN WE DO OUR
POLLING IS MUCH MORE POPULAR
THAN THE STATE OR LEGISLATOR
THE LEGISLATURE.
AND SO YOU'RE GOING TO HAVE
VERY WELL REGARDED, VERY WELL
RESPECTED, VERY WELL-LIKED
LOCAL LEADERS SPEAKING OUT
AGAINST THIS BECAUSE THEY'RE
THE ONES OFFERING THOSE
SERVICES, AS JULIE MENTIONED,
PUBLIC SAFETY AND OTHER THINGS
THAT WOULD INEVITABLY BE CUT IF
YOU PUT A ONE POINT FIVE
DOLLARS BILLION, MAYBE 15
BILLION DOLLARS OF THE NEXT TEN
YEARS CUT ON THE STATE BUDGET
AND IT SEEMS LIKE WE'RE WE'RE
FLUSH WITH CASH RIGHT NOW.
THE BUDGET IS FLUSH WITH CASH
RAINY DAY, RAINY DAY FUND
SURPLUS.
IS THAT A BIT MISLEADING?
GOOD TIMES.
THERE WILL BE BAD TIMES AS WE
KNOW DOING THIS IN GOOD TIMES
WHEN THE BAD TIMES CATCH UP TO
US WHAT MIGHT HAPPEN PAUL SO WE
ARE DEFINITELY IN GOOD TIMES
RIGHT NOW.
WE ALSO HAVE THE STIMULUS
PACKAGE BUT I THINK IT'S
IMPORTANT TO NOTE THAT THE
AMERICAN RELIEF PLAN PRECLUDES
CITIES OR OTHER FOLKS FROM BACK
FILLING TAX CUTS.
YOU CAN'T TAKE THE FEDERAL
MONEY AND THEN OFFER TAX CUTS.
SO THAT'S A WHOLE NOTHER ANGLE
THAT WE'RE NOT THINKING ABOUT
HERE IS THAT IT MIGHT BE GOOD
RIGHT NOW BUT TO REMOVE ONE
OF THE REVENUE STREAMS THAT
KEEPS US SORT OF BALANCED AND
STABLE IT'S A THREE LEGGED
STOOL IS THE WAY IT'S DESCRIBED
THROUGH PROPERTY TAXES, INCOME
TAXES AND SALES TAX.
IF YOU CUT ONE OF THE LEGS OFF
THE STOOL CAN'T STAND.
JULIE, LET'S GO BACK TO PROP
TWO, 08.
YOU BROUGHT IT UP A MINUTE
EARLY THIS THIS LEGISLATION AS
IT STANDS NOW IS KIND OF A BANK
SHOT IN THAT IF YOU OVERHAUL
THE TAX CODE YOU'RE BASICALLY
MAKING PROP TWO, 08 IRRELEVANT
.
CORRECT.
. CORRECT. AND IT'S PURPOSEFUL, RIGHT.
BECAUSE REPUBLICANS WERE UPSET
THAT THE VOTERS APPROVED IT AND
SO WHAT THEY'RE GOING TO DO IS
THEY'RE GOING TO SAY HEY
VOTERS, WE KNOW THAT YOU
DECIDED THAT THE TOP ONE
PERCENT OF ARIZONA TAXPAYERS
THAT THEY SHOULD PAY MORE, THEY
SHOULD PAY THEIR FAIR SHARE.
BUT NOW WE'RE GOING TO
COMPLETELY UPEND THE TAX
CODE SO NONE OF THIS MONEY
COMES IN FOR PROP TO 08.
AND IN ADDITION TO THAT, THE
TOP ONE PERCENT WILL GET YET
ANOTHER TAX CUT MORE THAN WHAT
THEY ALREADY HAVE RIGHT NOW
BECAUSE ONE OF THE THINGS
THAT'S IMPORTANT ABOUT THIS
FLAT TAX IS THAT IT'S
INCREDIBLY REGRESSIVE MEANING
THE VAST MAJORITY OF THE
BENEFITS GO TO THE TOP ONE
PERCENT, THE TOP 20 PERCENT IN
FACT 90 PERCENT OF THE BENEFITS
GO TO THE TOP 20 PERCENT
OF ARIZONA TAXPAYERS AND SO
BACKFILL ON THE PROP TO 08 PROP
TO 08 VOTER APPROVED LAST YEAR
WOULD ADD A TAX INCOME TAX
SURCHARGE ON HIGH WAGE EARNERS
AND IT'S ALL BASED ON TAX
BRACKETS AND THE TAX BRACKETS
WOULD CHANGE MAKING UP TO 08
MOOT.
ALL RIGHT.
WE'VE GOT TO MOVE ON WHEN WE
COME BACK, TWO YEARS AFTER HIS
STUNNING STATEWIDE VICTORIES,
WHY ARE DEMOCRATS HAVING
TROUBLE LINING UP CANDIDATES
FOR TOP OFFICES AND WILL
REPUBLICANS HAVE A PRIMARY
PROBLEM IN