Why only raise the income tax on the wealthiest 1 percent?
Arizonans with lower incomes are already paying more as a portion of their income in state and local taxes (sales, income and property) than the wealthiest residents. Every previous tax cut to income and property taxes has increased our reliance on sales taxes which cost more as a share of income for lower income families. Because our tax code is so unbalanced, a person with a $30,000 per year income will still be paying more as a portion of his/her income than a person with $1 million income whose state income taxes increase because of this initiative.
Why not raise the state sales tax instead?
According to the Tax Foundation, Arizona’s sales tax is already the 11th highest in the country counting the state sales tax rate plus the average local sales tax rate (8.33%). In many of our communities, the total state, county and city or town sales tax is even higher with residents in some communities paying sales tax of more than 10%. Because we don’t tax most services or many on-line transactions, the sales tax is a shrinking base. Over time, the sales tax rate will have to grow higher and higher to keep the same amount of revenue. There is also a ballot initiative circulating right now to prevent the sales tax from being applied to services in the future.
How do new federal tax cuts impact our initiative?
The wealthiest one percent of Arizonans will receive an average federal tax cut of $47,940, or 27% of the tax cuts going to all Arizonans. They will owe an average state income tax increase of $29,708 from the Invest in Education Act. In contrast, the bottom 60 percent will receive only 14% of all of the federal tax cuts going to Arizonans for an average tax cut of $410. This initiative is a responsible way to ask those who are benefiting the most to help students and teachers.
How do new federal tax cuts impact our initiative?

The wealthiest one percent of Arizonans will receive an average federal tax cut of $47,940, or 27% of the tax cuts going to all Arizonans. They will owe an average state income tax increase of $29,708 from the Invest in Education Act. In contrast, the bottom 60 percent will receive only 14% of all of the federal tax cuts going to Arizonans for an average tax cut of $410. This initiative is a responsible way to ask those who are benefiting the most to help students and teachers.

What about corporate taxes?

Politicians have been expanding corporate tax credits over the past several years. For most of these tax credits, if a corporation does not owe enough income taxes to use the whole credit, they are allowed to save the unused portion of the credit and apply it against future tax liability. Today, individuals and corporations are carrying-forward a combined $1.2 billion balance in carry-forward tax credits. Even if the corporate income tax was increased today, it would not result in immediate revenue for teachers and students because it would take several years for corporations to use their tax credit carry-forward balances.

Why not other types of revenue?

Arizona’s tax code has many problems that need to be fixed. This initiative is the responsible route to a dedicated funding source to get needed resources into Arizona classrooms. We will always need to make sure we have state lawmakers who are committed to working for a tax code that is fair and raises sufficient revenues to properly fund the priorities Arizonans care about to create better economic opportunities and thriving communities.

How will a tax increase on the wealthiest Arizonans affect jobs and our economy?

99 percent of all Arizona tax filers will not have their taxes increased by this initiative. What this initiative will do is put an additional $690 million annually in new money into our public education system to pay for quality teachers in every classroom and ensure those classrooms have the resources needed to educate a skilled workforce for Arizona. When asked in a survey the past three years, Arizona’s top business leaders have consistently stated that the lack of a skilled workforce and a strong public education system are the biggest challenges to Arizona’s economy. This initiative will provide the investments needed to strengthen both.

Will this tax increase hurt small businesses in Arizona?
The small business argument is a red herring. We heard the same warnings about the dangers of raising the minimum wage in Arizona, yet jobs have continued to grow and most economists say there has been no overall negative impact. Most small businesses don’t have taxable income anywhere near the amount this initiative relates to (the median income for Arizona small businesses is $48,898 according to the U.S. Small Business Administration). Small businesses that are large and profitable enough to be in the top 1 percent of income earners should pay their fair share too because they will benefit from having a stronger public education system and the skilled workforce that results.
Why are we proposing an initiative that is expected to raise $690 million per year, when $1 billion has been cut from public schools since 2008?

The #RedforED movement brought unprecedented levels of grassroots engagement to the State Capitol in 2018, including teachers, support staff, parents and students, calling upon lawmakers to address the funding crisis in our public schools by appropriating new, sustainable revenue into public education.

It was because of the pressure to act which was placed upon lawmakers by this grassroots movement that the legislature appropriated an additional $400 million into classrooms for this year.

When combined with this investment, the Invest in Education Initiative will result in $1.1 billion in new investments into Arizona’s public schools starting in 2019.

Is a tax on the wealthiest Arizonans an unpredictable source of revenue?
Both income tax and sales taxes can be volatile based on the economic cycle. A revenue source that may vary over time is more secure than no dedicated revenue source at all. We know from past history that without a dedicated revenue source, funding for public education gets cut – and significantly cut – when the economy slows down. One of the best remedies for a volatile economy is a strong public education system, and this initiative will provide critical investments into Arizona classrooms to educate the skilled workforce we need to grow our economy.
How can we be sure that if this initiative passes, that a future legislature will not use the new money for something else?
The initiative includes language to ensure that the revenue generated by this proposal cannot be used “to supplant, replace or cause a reduction” in other school district funding sources. If approved by voters this November, this initiative will create a guaranteed, sustainable funding source to solve our teacher shortage and classroom resource crisis in a manner that is voter protected and which the Arizona Constitution says cannot be taken away by the legislature.