Tax Cuts R Us: Third Round of Massive Tax Cuts in House Ways & Means (video)

Posted on by Pamela Powers
Arizona House

How can a “pro-life” state be #50 for Adverse Childhood Experiences? Because the Arizona Legislature prioritizes corporate welfare over child welfare. It’s that simple.

The House Ways and Means Committee has passed six tax breaks in the past two weeks. Tomorrow’s agenda has 12 bills, including eight additional bills that are tax breaks or other means to reduce revenue. The Microsoft tax break (HB2771) that I warned you about a few weeks ago in on the agenda.

Ways and Means has passed six tax cuts so far in 2020. Has anyone done the math to determine the future annual hit if all of these tax breaks are passed. Probably not. We don’t have any JLBC costs estimates for some of them, and several are structured to automatically increase over time. The Tea Party– under Governor Jan Brewer, Senate President Russell Pearce, and several Legislators who are still in office– passed massive annual decreases in corporate income taxes, the results of which have been felt in the classrooms. When she left office, Brewer suggested that they may have gone overboard with the tax cuts. When Governor Dough Ducey took over, he said real men aren’t afraid to cuts taxes and has continued to cut, cut, cut. Let’s stop cutting and start investing. We have hundreds of millions of dollars in extra funds this year. Don’t let them give it away like they did last year.

Just to be clear– none of these 14 tax reductions would do anything to directly help public education, access to healthcare, reduction in poverty, workforce development or infrastructure. They are all about cutting taxes or giving tax credits to business.

Here are the bills that could reduce general fund revenue in the queue for Feb. 12. If you want the Legislature to invest in education, healthcare, and infrastructure– the People’s To Do List– instead of the corporate wish list, please voice your opinion on Request to Speak (RTS) or by phone or email to your Legislators (regardless of party).

HB2352: centrally assessed property; valuation; pipelines. (Pipeline company wants to pay less.)

HB2385: TPT; reimbursement; motion picture production. (When I moved to Arizona in the 1980s, we had film tax breaks. I was a freelance writer and photographer. When I rented equipment, I saw the movie crews. Film tax credits have been a boon to some states, but other states have lost their shirts on this. There is research about the sweet spot for this topic. I’m not sure anyone did the math on this one.)

HB2404: TPT; prime contracting; exemptions; certificates. (Not necessarily a tax break but by changing where/when contractors pay sales tax– TPT– could reduce revenue for cities and towns.)

HB2409: small business investment credit; extension. (Extension of the Angel Tax Credit– not technically new.)

HB2496: agricultural property classification; guest ranches. (Resorts can be classified as dude ranches and get an agricultural property tax classification, which is lower than the commercial classification.)

HB2771: tax credits; qualified facilities; extension. (This is the former Apple tax break that has been modified and expanded for Microsoft.)

HB2778: taxation; omnibus.

HB2779: state equalization assistance; rate; appropriation.

Here are the tax breaks that the House Ways and Means Committee passed in the last two weeks. These have not been debated on the Floor of the House yet. There is time to stop these also.

HB2732: tax credit; affordable housing. (I voted against this last year because it would have been a $100 million hit to the general fund as the tax credit grows over time. HB2732 would be a $750 million hit to the general fund in the future. We should restore the Housing Trust Fund and stop incentivizing luxury apartments at the local level.)

HB2629: TPT; exemption; pacemakers. (This may be a red herring. The Department of Revenue was unsure if pacemakers are taxed now or not. I voted “present” and asked for more information.)

HB2293: renewable energy storage equipment; valuation. (Tax break for electric utilities.)

HB2355: charitable contributions; deduction; inflation adjustment.

HB2356: charitable contributions; deduction; increase.

HB2358: dependent tax credit; inflation adjustment.

(HB2355, HB2356, and HB2358 all build on tax breaks from the 2019 session.)

Many of these tax giveaways automatically increase over time– like HB2732, HB2355, HB2358 and HB2732. This is irresponsible fiscal policy. Our country is being run my a mad man, markets are in turmoil, trade wars and real wars abound, too many people are living paycheck to paycheck, and too many Arizona children are living in poverty. Cutting taxes now and on into the future is folly.