New pro-Prop. 208 ad again fails to disclose huge tax increase, impact on small business

Proponents of Proposition 208 released their third television ad on Tuesday and, just like their first two ads, the latest ad says nothing about the initiative’s central provision: a 77.7% income tax increase. 

“Proponents of Proposition 208 are 0 for 3 when it comes to telling Arizona exactly what their initiative does,” No On Prop. 208 Chairman Jaime Molera said. “From the outset of the campaign, the tax proponents have failed to shoot straight with Arizona voters on the size of the tax increase, who’s impacted by it, and where the money goes.” 

Proposition 208 increases the top individual state income tax rate from the current 4.5% to 8%, a 77.7% increase, vaulting Arizona into the top-10-highest income tax rates nationally. The tax increase dramatically undermines Arizona’s welcoming environment for small businesses, which pay their taxes on the individual portion of the tax code, not the corporate tax code. Fifty percent of taxpayers whose tax rates will be directly targeted are small business owners. [source] 

“If Proposition 208 passes, small businesses will pay a higher top tax rate than big business—even the Fortune 500—but you wouldn’t know that by watching the proponents’ ads,” Molera said.  “The proponents’ ads fail to disclose that Proposition 208 won’t do anything to enhance teachers’ base pay. That’s because the initiative relies on the most volatile slice of tax revenues. No school district would base its budgets and teacher contracts on such an unpredictable source.”  

A broad coalition of stakeholders across Arizona, which includes associations representing businesses large and small, a host of industries, and elected officials, opposes Proposition 208, while the campaign in support of the huge tax increase is relying mostly on the financial support of a Portland, Oregon-based activist group.  

“Arizona voters want straight talk, not campaigns backed by out-of-state groups that aren’t willing to debate the central provisions of their initiative,” Molera said. “Proposition 208 would be the largest permanent tax increase in Arizona history, but I doubt we’ll see that fact in the proponents’ ads any time soon.” 

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