This is what is most important to understand about Proposition 208, the Invest in Ed initiative: It constitutes a gigantic gamble with Arizona’s economy.
The measure would increase the top individual income tax rate in Arizona from 4.5% to 8%.
Arizona’s current maximum rate of 4.5% is not a low-tax outlier. In fact, it is in the mainstream of our region and the country .
All of Arizona’s neighboring states, except California, have a top rate of less than 5%. Nevada doesn’t have an individual income tax. Neither does Texas, just on the other side of New Mexico.
In fact, 23 states have a maximum individual income tax rate of 5% or less. Seven states have no individual income tax whatsoever. Two only tax investment income.
So, a top rate of 8% would put Arizona well above the mainstream in our region. In fact, it would give Arizona the ninth-highest income tax rate in the entire country. Generally, higher taxes mean less growth As a general rule, income tax rates are inversely related to economic growth. It’s not an ironclad relationship. There are some high-tax states that do well economically. And there are some low-tax states that don’t.Prop. 208 is a gamble that Arizona […]
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