The Arizona legislature is considering two forms of the proposal that would wreak tremendous damage on rural areas, local governments, schools, and other vital services of Arizona’s people while bearing a disproportionate payout to already wealthy people through a series of new income tax cuts.
A multi-ethnic group of elementary-age children is playing together outside at recess. They are chasing each other and playing tag.
Arizona Legislature Proposals
Proponents declare it as harmless, but its complicated formulas hide a predatory, harmful effect. Although it’s ultimately a like with reckless, triggered income tax cuts being pushed in states across the country. Senate Concurrent Resolution 1035 and Senate Bill 1577 are two proposals that take two forms.
Though they’d take different paths to be. come law the resolution is a ballot question that legislators would put to voters without the governor’s approval and if the bill is moving through the standard legislative process they’d arrive at the same goal. Obscured by vocabulary like “structural surplus” and a complex set of formulas based on state revenue and spending data, each proposal would produce a series of costly tax cuts and could eventually eliminate the state’s income tax altogether would provide an outsized gain to wealthy taxpayers who need it least, at the ultimate expense of everyone else.
2023 Spending Plan
The state’s individual income tax will generate about $6 billion this 2023. For context, that’s nearly as much as the state gave K-12 schools in its 2023 spending proposal Arizona legislature. Arizona legislature can’t fail to revenue of that magnitude without doing great harm to children’s education and other vital services. To make up the difference, the state would have to sharply raise other taxes like sales taxes or property taxes both of which fall hardest on those with the least ability to pay.
The Arizona legislature would also harm Arizona’s local communities. Under state law, cities and towns have received 15 percent of state income tax collections annually for about the past half-century, and that share is slated to be 18 percent next year. If the state sharply cuts or eliminates the income tax, though, that major revenue source for localities would wither, forcing cities and towns to raise existing taxes, introduce new taxes on their residents, or slash funds for schools, emergency response, libraries, community health clinics, and more. Exactly how fast the income tax and the money provides to cities and towns would decline and depend on the economy over the next years. The legislation’s formulas would force especially sharp tax cuts in periods after a recession.
If enacted, the Arizona tax plan would also further grow the income and power of wealthy interests in the state at the expense of middle- and lower-income families. Income and wealth inequality has grown in Arizona, while the state’s legislature and courts have recently taken several moves that shift even more of the state’s income to these wealthy interests. Policymakers and the courts disrigartd the public will after Arizona voters approved growing taxes on millionaires to fund public schools. Instead, the legislature cut income taxes, particularly for high-income people, and restricted voters’ ability to ever again tax wealthy people via the ballot box.
The complex of the two proposals give them a benign appearance. But if enacted, the legislation would show a harmful impact, diverting revenue from schools, communities, and services that working families and small businesses need to cut taxes for the wealthy.
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