Hamer: More taxes not a solution - East Valley Tribune: Opinion

Hamer: More taxes not a solution

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Posted: Thursday, December 11, 2008 3:17 pm | Updated: 11:19 pm, Fri Oct 7, 2011.

In November, 37,000 Arizonans lost their jobs - a monthly record since the Arizona Department of Economic Security started compiling this number in 1971. Our unemployment rate stands at 6.1 percent and seems destined to increase. Arizona faces a number of challenges, including a budget deficit that as a percentage of our general fund is the worst in the nation. Still, far and away the most pressing challenge is getting Arizona's jobs machine back on track. A few years ago Arizona was creating more jobs than almost all other states. Now we are close to the very bottom.

Glenn Hamer

It is clear President-elect Barack Obama has shelved some of his campaign plans to raise taxes, understanding they would cost jobs. Instead, he is focused like a laser beam on job creation.

Yet, in Arizona, there are serious reports offered that suggest raising taxes is the best way to balance the state's budget. Arizona, unlike the federal government, is constitutionally required to balance the budget, but that cannot come at the expense of the overall health of our economy.

It is a terrible idea to raise taxes during a severe economic downturn, particularly when other states are holding the line. If our tax rates go up or policymakers signal their desire for higher taxes when neighboring states promise to hold the line, more jobs will be lost here. Higher taxes mean more layoffs when directed at business. When taxes are raised on individuals, there is less disposable income for consumers to spend at restaurants or on cars or other goods. This means more foreclosures, blighted neighborhoods, vacant retail spaces and asphalt where car dealers used to operate.

In Arizona, our best thinking needs to be on creating an economic climate that allows Arizona's economy to rebound. The Arizona chamber released a paper (www.azchamber.com/news/view_article.cfm?ID=63) earlier in the year that includes big ideas for job creation, such as competitive tax rates on business property and a more competitive corporate income tax rate. In January, the chamber will release updated recommendations for dealing with the budget crisis, while maintaining focus on a competitive tax climate that creates jobs.

Glenn Hamer is president and CEO of the Arizona Chamber of Commerce & Industry.

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