While tens of thousands march in Madison, Wi. as their governor attacks collective bargaining so he can unilaterally cut wages in the future without talking to workers, the Arizona state legislature passes a $538 million tax cut for corporations. The Republicans in the state argue that it will create more jobs, but there is no evidence that tax cuts create jobs. A drop in unemployment following a tax cut does not prove causality any more than a drop in unemployment after a tax raise.
As Jon Shure from the Center on Budget and Policy Priorities in Washington, D.C. points out in the Arizona Republic,
There is no guarantee the money a business saves from a tax cut, such as the nearly 30-percent cut to the corporate income tax Arizona lawmakers just approved, will stay in the state, he said.
Meanwhile, budget cuts could dull a state’s appeal to employers looking for skilled workers or a strong school system, he said.
“The role of taxes is making sure you have the resources to invest in the things that make a healthy economy,” Shure said. Those range from a reliable transportation network to safe, livable communities.
“There’s so much more that makes a business decide to move than taxes,” Shure said. “Such as, ‘How do I move goods to market, how near am I to my customers, what about a skilled work force?’ “
In the meantime, Governor Brewer and the Republican controlled legislature also cut programs that help thousands of Arizona. First, there are the cuts to Medicaid that have been approved by the Obama administration.
The effects, unsurprisingly, could be devastating. In Arizona, if Governor Jan Brewer’s budget is enacted, 280,000 poor people will lose their Medicaid benefits.
“HHS Secretary Kathleen Sebelius has approved a request by Arizona Governor Jan Brewer to cut the number of Medicaid beneficiaries in the state by 250,000, saving $541.5 million, according to a Bloomberg report.
Interesting that the tax cuts equal about $538 million, nearly the same amount as the cuts to Medicaid.
This cut is on top of the cuts to AHCCCS payments for transplants, a savings of a meager $1.4 million, which lead to two deaths of people on the top of the transplant list. As of November 2010, there were 98 people on the transplant waiting list in Arizona. http://www.cbsnews.com/video/watch/?id=7357081n If you want to lure people, jobs and corporations to Arizona, perhaps a functioning health system is a good place to start.
Forget about insuring children. KidsCare, a program to give insurance to children 200% below the poverty level is gone. Healthy Arizona, a program to insure poor adults, has also been eliminated. Do you see a pattern here? If you are poor and live in Arizona, help is NOT on the way. But please feel free to serve the rest of us our fast food, clean our toilets, stand outside holding signs with arrows pointing toward strip mall tax services or work our call centers for us.
Cutting health care for the poor will lead to higher use of more costly critical care services and in the long run not save the state money. However, most Republicans in Arizona can’t show any signs of weakness: caring for those less fortunate. Eventually the health care costs get passed on to the rest of us through higher insurance premiums, premiums the state dare not regulated.
As long as the increase is not paid for in taxes up front, the politicians in Phoenix can create distance between themselves and the rising health care costs. People in Arizona will continue to vote in a majority Republican legislature. That is until them scary Mexicans take over the state, but that’s for another article.
Moreover, state workers in Arizona have been given a 5% pay cut, mostly through furloughs. As long as corporations get their tax cuts, things will work out, right?
Corporations depend on consumer and government spending. The tax cuts that are created to help companies will lead to more public sector lay-offs and less consumer spending. These cuts and layoffs will further damage the already fragile consumer confidence of those lucky enough to have work while hurting those less well off in Arizona. This will hurt the companies Brewer thinks she is helping. Of course, we know what companies will really benefit with further layoffs and cuts in pay: the private prison industry. Brewer is indebted to them, specifically the Corrections Corporation of America, for supporting her reelection, so that’s no big deal. (Link)
Cuts to education, around $300 million dollars this year alone for k-12 and college http://www.wsws.org/articles/2010/mar2010/ariz-m22.shtml , will leave Arizona’s children unprepared for the workforce. With rising tuition, students will be priced out of universities unless they take on tens of thousand of dollars in debt. With few prospects of good jobs, fewer people will take on the cost of a four-year degree. Community colleges, the best U.S. contribution to education in the last fifty years, will have larger enrollments. However, with budget cuts, colleges will have trouble meeting the demands of this growing population.
So while the Arizona legislation cuts programs helping the poor and middle classes in Arizona, they give away money to corporations with the hopes that jobs will appear like manna from the sky.
Please call the Governor and tell her how wrong she is.
Telephone (602) 542-4331
Toll Free 1-(800) 253-0883 (within Arizona only)