This is the multimillion-dollar campaign you may never hear of.
Realtors, the supporters of Prop. 126, have poured at least $6.1 million into the campaign for the initiative. It would put in the state constitution a prohibition on taxes of services such as, say, those provided by Realtors — or tax preparers, or doctors, or barbers.
If we pass this proposition, we couldn’t impose taxes on services the same way we have a sales tax on goods like bicycles and clothing.
There is a campaign committee in favor of the proposition, called Citizens for Fair Tax Policy. It is chaired by a Realtor from Cottonwood, Holly Mabery, and run by Wes Gullett, a longtime Phoenix campaign consultant.
Gullett told me the campaign is airing ads in the state’s three media markets, Phoenix, Tucson and Yuma. But I know I haven’t seen them. They’re being overwhelmed by the onslaught of ads about Kyrsten Sinema and Martha McSally in the U.S. Senate race, Doug Ducey and David Garcia in the governor’s race, and the Clean Energy Initiative, which is confusingly called Prop. 127, just one digit off from this initiative.
“It’s challenging in this environment because there’s an enormous amount being spent on campaigns right now,” Gullett said.
His argument for the initiative is that it protects small-business people, whose income is already taxed. A service tax would amount to double-taxation, he said. It would also raise costs on consumers.
There is no particular groundswell of public sentiment against sales taxes on services, though. This is more of a pre-emptive strike by Realtors and their allies whose services could end up being taxed as governments look for different sources of tax money.
It would work, by the way, just like a sales tax on goods. You pay an extra 5.6 percent buying objects like towels or computers, but nothing extra when you buy services, which are an increasing part of our economy.
The same old taxes aren’t bringing in money the way they used to. When you buy goods online, you may or may not pay a state sales tax, and you won’t pay a local sales tax.
Also, our state laws already make it hard to impose new taxes on services. It would require a two-thirds majority of both houses of the Legislature, or voter approval, to add a service tax that brings new revenue. It would be possible, though, for the Legislature to approve a new service tax by a majority vote if it were revenue neutral, meaning that other sources of tax revenue were cut by the same amount raised by a service tax.
Me, I don’t get the need for a prohibition on taxing services. We have enough protections already, and we have a need to diversify our revenue base. I agree with Andrew Clark of the Arizona branch of Americans for Prosperity, a Koch brothers-backed group. He wrote in the secretary of state’s publicity pamphlet that exempting services from taxation would essentially reward the well-connected and create inequality under the law.
“What we should instead advocate for is a system where every business pays the same, lower tax rate. No more corporate welfare for the well-connected. No favors or exemptions for corporations who can afford effective political operatives running campaigns like this one.”
We'll see just how effective the political operatives can be in a year like this.
Kyl on Kavanaugh
It was clearly an advantage of Jon Kyl’s appointment as U.S. senator, replacing John McCain, that Kyl was a sure vote for Brett Kavanaugh’s appointment to the U.S. Supreme Court.
Kyl had been the lead “sherpa” for Kavanaugh, helping guide him through the nomination process, up till he was appointed to the Senate. Now that advantage looks problematic.
Up at The Arizona Republic, columnist E.J. Montini has argued that Kyl should recuse himself, not vote for Kavanaugh’s nomination, because of the conflict inherent in his role as sherpa.
I won’t go that far. But Kyl, who has gone relatively quiet since returning to the Capitol, must explain himself now that Kavanaugh has been accused of attempting a sexual assault. What we in Arizona deserve to know is whether he knew about this allegation and what he did about it. Is it new to him? Or did he investigate it and help Kavanaugh plan a response in case the allegation came out?
Ryan in Tucson
House Speaker Paul Ryan was in Tucson briefly over the last couple of days to help out Republican Lea Marquez Peterson’s campaign for the U.S. House in Congressional District 2.
The fundraiser Wednesday was scheduled to take place outdoors at auto dealer and Republican activist Jim Click’s house, but because of the rain it had to be moved inside to the Tucson Country Club, said David Eppihimer, chair of the Pima County GOP. More than 100 people attended, he estimated.
Ryan also attended a Thursday morning event where he thanked Marquez Peterson’s volunteers.
Dem endorses Ducey
The mayor of Douglas, Robert Uribe, has endorsed the Republican governor, Doug Ducey, in his re-election bid.
Uribe told me Thursday he made the decision because Ducey has been willing to help Douglas, pushing for the construction of a new port of entry and other improvements.
Via Twitter he explained: “I am the type of Mayor that is willing to reach across the aisle and work with whomever is willing to help #DouglasAZ succeed. Yes, I am a Democrat, but, for me, it’s Douglas over any political party, agenda, or career.”
Uribe told me he is not supporting any other Republicans this election and is all in for the election of Ann Kirkpatrick, the Democrat running for Congress in CD2, the district that includes Douglas.
LD 10 debate absence
An incumbent will be missing when the Arizona Clean Elections Commission holds its Legislative District 10 debate on Tuesday at Sahuaro High School.
Rep. Todd Clodfelter said he had already set up a previous campaign engagement that he couldn’t break when the commission chose Tuesday night for the district’s event.
“The clean-elections people don’t call us and say what’s a good date for you,” he said. “They say, ‘Save the date.’”
Clodfelter is not running as a Clean Elections candidate, so he isn’t required to attend. Clodfelter, a Republican, is running against two Democrats, incumbent Kirsten Engel and challenger Domingo DeGrazia.
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