Arizona

Arizona Supreme Court Blocks Proposed Tax Hike, Saying It's Too Confusing

The ballot initiative, which would have raised money for education by hiking taxes on the wealthy, "creates a significant danger of confusion or unfairness."

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Rick D'Elia/ZUMA Press/Newscom

A proposed ballot initiative in Arizona would have raised money for public schools by hiking taxes. But it won't be on the ballot this November because its description is too confusing, the state's Supreme Court ruled Wednesday.

Proportion 207, also called Invest in Education, would have raised the income tax rate on Arizonians who make more than $250,000 a year (or couples who earn more than $500,000) from 4.54 percent to 8 percent. Individuals with income greater than $500,000 or couples who make more than $1 million would have had to relinquish 9 percent of their earnings to the state.

Proponents of the measure, which garnered roughly 270,000 signatures, say it would have raised $690 million for education each year. But the Supreme Court ruled that the petition's brief description wasn't worded well and "creates a significant danger of confusion or unfairness."

For one thing, the court thinks the proposal didn't accurately portray the tax hike. As the Arizona Republic reports:

The complaint alleged the petitions were misleading because they referred to the proposed tax-rate increase as a "percent" increase and not the more accurate "percentage point" increase. According to the complaint, the tax rate would have seen a 76 and 98 percent increase and not a 3.46 and 4.46 percent increase.

Another problem has to do with tax brackets. In 2014, Arizona passed legislation to index tax brackets, thus ensuring that people don't face tax hikes if their earnings don't rise faster than inflation. The ballot initiative would have eliminated this indexing, but the petition didn't inform potential signees of this fact.

Former Arizona state legislator David Lujan tells The New York Times that the ruling "takes away the voice of the people." But not everyone agrees. "It's been a great day for everyone looking out for freedom," Tom Jenney of Americans for Tax Prosperity tells KSAZ.