Two of the 11 bills that make up the Republican budget for Arizona — HB2899 and HB2900 — were defeated 30-30 in the Arizona House on Monday, June 7.
These bills include the disastrous Flat Tax proposal and the income tax cap at 4.5%. Together, they are an attack on the will of the voters because they reduce the impact of Prop 208 (Invest in Ed) on Arizona’s wealthiest residents. Arizona’s 1% (about 30,000 people) would have been the biggest beneficiaries of the Republican’s $1.5 billion in tax cuts in their budget. This state has over 7 million people. Why are the Republicans working for 30,000 people? These bills — and the other nine that make up their budget deal — deserve to die.
I am so thankful for Rep. David Cook who voted “no” on both bills along with all 29 Democrats.￼ The flat tax would have really hurt cities and towns across Arizona. They would have lost more than $200 million in shared revenue if the Flat Tax had passed. It would have forced them to cut services or raise sales taxes dramatically.￼ Rep. Steve Kaiser stood up and gave a short but impassioned speech about how glorious it would be to live in a state like Texas or Nevada with no income tax. He failed to add how high the sales taxes and miscellaneous fees are in states that have low personal and/or corporate income taxes. (Somebody pays. Roads and schools are not free.)
Continue reading Two #AZGOP Budget Bills Defeated in #AZHouse (video)
The House Appropriations Committee was debating the budget as I drove to the Capitol on Tuesday morning. The Republicans started the budget process by introducing the 11 bills that make up the coming fiscal year’s budget on Monday, May 24. Except for leaked documents and rumors, this was the first time the Democrats and the public were able to see the whole proposal (available here).
Rumors have been swirling around the Capitol for weeks about the massive tax cut — biggest ever in Arizona history — and the flat tax proposal that the Republicans were planning. The rumor mill also said they didn’t have the votes to pass it. Republicans need ALL of their members to get in line on the budget, since the flat tax and other shortcomings make their budget a non-starter with Democrats, who make up 48% of the Arizona Legislature.
Continue reading #AZGOP Budget Has Flat Tax & Tax Breaks But Lacks Votes (video)
Governor Doug Ducey and Arizona Republicans are promoting a 2.5% flat tax on personal income and have included it in the budget package, currently under negotiation in the Arizona Legislature. They are also proposing that income over $250,000 for individuals and $500,000 for couples be taxed at 1%. Usually excess profits are taxed at a higher rate, not at a lower rate, but, hey, this is Arizona.
You’ll remember that in 2020 the voters approved Prop 208 Invest in Education. With this citizens initiative, the voters created a 3.5% fee on personal income over $250,000 for individuals and $500,000 for couples. The Republican tax plan will eliminate the Prop 208 “burden” on Arizona’s 1%. Who will pay the difference? You will.
Rather than requiring Arizona’s richest 30,000 residents pay their fair share of public education costs, the state is giving them a tax break, and the state is going to pay the bill for them. In the news, Rep. David Cook called the Flat Tax “unfair” because everyone will pay taxes, but the state will “backfill” the cost and help out “high-earners” (ie, Arizona’s richest residents).
Other states have tried flat taxes and they have broken the budget. It will not only hurt the states budget, but it will hurt the cities and towns also. The Republican budget is a nonstarter. Except for the 30,000 millionaires and billionaires who will benefit from Republican largesse, it is bad for Arizona.
The Flat Tax — along with all of the other tax breaks in the Republican budget — will fuel greater economic inequality in Arizona. Read the details of the Flat Tax plan here: Arizona budget plan would massively cut tax collections, create flat income tax rate.
Continue reading Republican Flat Tax Feeds Economic Inequality in #AZ (video)