The “No on 208” television ad that claims 208 will hurt small businesses is simply untrue.
Treasurer Yee and other opponents claim the 3.5 percent surcharge in 208 will adversely affect more than half of small businesses in the state. This is not the case. What they neglect to say is that the surcharge is on personal – not corporate – income. Moreover, a small business owner would have to show taxable income of over $250,000 (single) or $500,000 (joint) to be subject to the 3.5 percent surcharge.
Even then, the surcharge would only apply to that portion of income exceeding those amounts. So, for example, a small business owner filing a $501,000 joint personal return would pay an additional 3.5 percent on $1,000, or $35; hardly a deal breaker in my opinion.
Another contention is that the 3.5 percent surcharge will drive small businesses and jobs from Arizona to other states and will force many struggling small businesses to close. Now, if a small business is struggling, it seems unlikely the owner would report a taxable income of over $250,000 (or $500,000), so their personal tax rate would remain the same regardless of 208’s passage.
Furthermore, if one does report taxable income of over $250,000 (or $500,000), then that business isn’t likely to be struggling. A 3.5 percent tax ($35 per $1,000) would not be an excessive burden and it is estimated that less than 1 percent of small businesses are in the latter situation.
Please remember, this surcharge applies only to personal, not corporate, income. So, do the math, read the fine print and join me and multitudes of educators in voting yes on 208.