Prop 208 Tax Hike Punishes Small Businesses and Neglects Families in Need

Prop 208 Tax Hike Punishes Small Businesses and Neglects Families in Need

In a few months the Arizona residents will have the opportunity to vote on Proposition 208, a measure funded by out of state labor unions and special interest groups to impose a $1 Billion income tax increase on small businesses and entrepreneurs in the middle of a pandemic.  Not surprisingly, employers around the state are speaking out against the measure, as Prop 208 would kill thousands of jobs, punish small business owners and destroy our fragile economic recovery.

While the economic impacts may be devastating, what may be more infuriating to Arizona families is that Prop 208 does NOTHING to assist frustrated parents and students currently dealing with Covid-19 school closures and disrupted learning schedules. The revenue generated from this 78% tax increase would come with little accountability or oversight, leaving it up to school districts and administrators to spend the money how they see fit.

Prop 208 Crafted to Benefit Unions and Provide Pay Raises to Administrators

The backers of this massive tax increase do not care about families or small businesses in Arizona.  If they did, they would not have crafted a measure full of loopholes that allow funding to be siphoned off by district administrators and away from teachers and classrooms.  The initiative redefines teacher to include non-classroom administrative staff and changes existing law so that money is no longer earmarked for teachers and classroom spending. 

Of the $1 Billion anticipated to be collected if Prop 208 passes, not one dime will support parents as they battle to educate their children, not one dime is guaranteed to support teachers, and not one dime addresses improvements needed to overcome current environmental learning challenges.

Sadly, this lack of funding accountability in Prop 208 is by design. The backers of this measure know most people support K-12 and want to see improvements in the system. They are hoping that voters will not take a closer look at the fine print.

Measure will Derail AZ’s Economic Recovery by Punishing Job Creators and Small Businesses

According to the Tax Foundation, Prop 208 would give Arizona one of the highest small business tax rates in the country.  Under Prop 208, AZ small businesses will be taxed at a top rate of 8 percent (a 78 percent increase), giving us a higher income tax rate than Nevada, Utah, Colorado, New Mexico, and Texas. Employers and entrepreneurs will flee to these lower tax states, turning the Grand Canyon State into the mini-California of the Southwest.

Sadly, the small businesses who have survived so far are just starting to dig themselves out of the wreckage of the Covid-19 shutdown. It is undeniable that small businesses were hit hardest by the economic downturn, as most mom and pop shops were forced to close while big corporations (who are exempt from this tax increase) were allowed to stay open. Now just as they are seeing the light at the end of the tunnel, out-of-state labor unions and special interest groups want to hammer them with a massive tax hike at the ballot. They do not deserve this treatment.

Tone Deaf Measure Ignores Parents and Children in Desperate Need for Help

A cursory reading of Prop 208 shows that the backers of this tone-deaf initiative care little about Arizona families.  Currently the biggest crisis facing parents and students are the district-wide school closures and substandard online/distant learning conditions that have been forced upon them. They need help, yet the “solution” being offered up by the unions and special interest groups bankrolling this initiative is to dump more money into the system with no strings attached.

The only worthwhile investment in K-12 that should be considered right now is to provide direct aid to families to explore alternative educational opportunities and to help parents escape dysfunctional learning environments that are inflicting permanent damage on their kids.  Instead, Prop 208 soaks hardworking Arizona taxpayers with a massive tax hike that will likely result in nothing more than pay raises for school administrators in the middle of a pandemic.


Arizona voters should not be fooled – Prop 208 is bad for families, businesses, and our education system!