New poll shows voters are wary of income tax increase

Arizonans for Great Schools and a Strong Economy recently released a poll showing voter support for the ballot initiative to double the income tax rate (known as Invest in Ed) drops significantly when told about the level of the tax increase.

The survey asked respondents if they would support signing a petition for a 3 percent income tax increase versus a 76 percent tax increase on individuals earning more than $250,000 annually. According to the poll, 59 percent of respondents indicated they would sign a petition for a 3 percent increase, but that number falls to 29 percent when the tax is described as a 76 percent increase.

The initiative seeks to increase the income tax rate from 4.54 percent to 8 percent for individuals who have a taxable income between $250,000 and $500,00 and for families who generate between $500,000 and $1 million. For individuals and families that make more than $500,000 and $1 million, respectively, the tax rate would soar to 9 percent. This jump results in tax rate increases of 76.21 percent and 98.24 percent respectively.

Because most small businesses in Arizona file as a Limited Liability Company (LLC) or some other structure known as a pass through, they do not pay corporate taxes and instead pay the standard individual income tax rate, so the proposal impacts them as well.

“When Arizona voters get the real story, support for a major increase in the individual income tax completely falls apart,” Arizonans for Great Schools and a Strong Economy Chairman Jaime Molera said.

The description of the tax increase is the subject of a lawsuit filed last month.

According to the filing, the initiative description fails to disclose the repeal of an existing law that annually adjusts each income tax bracket for inflation and states that the description of the income tax increase on the petition is misleading. The petition description alleges that income taxes will increase by 3.46 percent and by 4.46 percent — a reference to the percentage point increase, not the overall tax increase percentage.

“I am confident that the judicial system will find the proponents’ work sloppy and misleading and will remove the initiative from the ballot,” Molera said. “But, if for some reason we must continue this campaign through the fall, this poll confirms that public opinion is on our side and that a near doubling of the income tax rate will be rejected by voters.”

OH Predictive Insights conducted the live caller survey of 400 registered Arizona voters August 2^nd -3^rd, with a +/- 4.9 percent margin of error.