| Unleash Prosperity Hotline Issue #355 08/24/2021 |
| 1) Arizona Gets A Flat Tax Great news from Arizona. The AZ Supreme Court has struck down the state’s Prop 208, a 2020 voter initiative that unconstitutionally raised the state’s income tax rate to 8%. The Court by a 6-1 majority declared that the tax and spending hike – which had been funded by millions of dollars of out-of-state teacher union dollars – breached the state’s constitutional spending cap. This will have to be verified by a lower court, but the evidence is crystal clear that the increased spending is above the legal cap. One Justice said this “almost certainly dooms” the tax and spending hike. Regular readers will recall that we at CTUP helped Governor Doug Ducey craft a 2.5% flat tax bill earlier this year, which was enacted into law. But the prop 208 surcharge brought that effective rate to about 6%. Add it all together and this means income tax rates will fall from a graduated structure that capped out at 8% this year to a new flat rate of 2.5% for everyone. This compares to New York where the tax rate is 15% and California where the rate is 13%. Hmmm, where to invest? Congratulations to our friends at the Goldwater Institute which brought this lawsuit against the tax hike. Time to buy property in Arizona. |
| 2) Can Pelosi’s $3.5 Billion Debt Bomb Bill Be Defused? If anything good comes out of the Afghanistan fiasco is that momentum for the $3.5 trillion “social infrastructure” bill has stalled. But don’t tell The Speaker that. On Saturday, Nancy sent a note to her 221 Democratic colleagues in the House promising three priorities. – First, the House is committed to pushing ahead a reconciliation bill with a price tag of $3.5 trillion. – Second, the House bill will be fully “paid for” with tax increases, we presume. – Third, the bill will be passed by the House by October 1. Is the Speaker now as detached from reality as Biden? We agree with our political forecasting friends at Cornerstone Macro who tell us they “strongly doubt there are the votes in either the House or Senate” for any of this to happen because there are already nine House Democrat moderates who say they won’t for any of this. Last night Pelosi pulled out all the stops to clear the first hurdle to achieve her impossible dream: passing the Bernie Sanders-authored, Senate budget blueprint through the House.  The budget vote was canceled last night, but as we go to press Pelosi reportedly has a deal expected on the floor later today to pass the budget with language included to express the non-binding “sense of the House” that a House vote on the bipartisan Senate infrastructure bill should occur by September 27. If this deal holds, Pelosi will manage to clear that first hurdle, but we’ll make some predictions about her promises on the reconciliation bill: This exercise isn’t going to be done by October 1; the Democrats would be lucky to enact this new law before Christmas. With Biden in full meltdown, (see item below), we believe that our chances of extracting some of the worst features of this godawful bill have risen dramatically. Our sole focus at CTUP will be to stop the tax increase (with tax rates of 50% or more); stop the forced union policies; stop the $40 billion to the IRS; stop the death tax hike; stop the Medicare, Obamacare, and Medicaid expansions; stop the green new deal subsidies; stop the $1 trillion student loan forgiveness, and stop the debt ceiling rise. We’ve said it before: This is the single most economically destructive bill in at least half a century. |
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