High on their own supply-side theories and stuffed with the cheddar that Uncle Sam has been shipping to the state to keep the economy healthy through the pandemic, Gov. Doug Ducey and GOP lawmakers at the Legislature last week delivered the mother of all income tax breaks, creating a flat tax that will shift the burden of supporting the state government from Arizona’s wealthiest residents to the middle class.
And they are telling some whoppers to hide the real impact. The governor’s office suggested the average tax cut will be $350 a year—a number that only climbs that high because the amount of money being handed away to the highest-earning Arizonans is so colossal that it balances out the peanuts most Arizonans will receive. It’s like living on a block where nine houses are worth $100,000 each and a 10th is worth $1.1 million. On average, every house is worth $200,000—but that’s still twice the value of nine out of 10 houses.
Ducey had the cold stones to justify this giveaway to Arizona’s top earners by saying he was looking out for the “little guy.”
Everyone has their own definition of the little guy, but this proposal does the exact opposite. According to the state’s bean counters at the Joint Legislative Budget Committee, little guys—the ones who earn, say, between $40,000 to $50,000 a year and pay, on average, $683 in income taxes annually—will get about an average of $39 a year in this tax break. Meanwhile, people who earn between $200,000 and $500,000 will see, on average, a tax cut of $3,202. Those who earn between $500,000 and a million bucks a year will see a tax cut, on average, of $12,000, which will decrease their taxes by nearly 40%. And if you earn more than a million dollars a year, you’ll see a taxes decline by about 43%.
Why can’t Republicans be honest about the real beneficiaries of this taxpayer ripoff? Because they know good and well that Arizonans would rather see taxes invested in schools, highways, health care and other programs to improve their lives rather than given away to people who don’t need it—namely, people earning more than a million bucks a year.
Republicans rammed this budget through in a matter of days, with the Senate passing it literally in the middle of the night. The public didn’t have a chance to weigh in and even the Democratic caucus was shut down in the House of Representatives, with Speaker Rusty Bowers complaining that because Democrats hadn’t come to work earlier in the week and slowed the process down, they forfeited the right to speak out against this theft of the state’s treasury.
The few GOP holdouts against the budget—and most of them couldn’t wait to vote for this giveaway—came on board once Ducey agreed to increase the percentage of the income tax that goes to cities and towns from 15% to 18%. While that may hold cities and towns harmless, how long will it be before Republicans decide to cut that percentage or find other ways to shift costs to the local jurisdictions?
There’s a lot of good that money could have done for the state. Lawmakers could have funded schools, many of which are in disrepair. They could have invested in higher learning to reduce the ever-increasing cost of tuition. They could have funded special ed for kids who need extra help. They could have increased funding for our decaying highways. They could have put more money into affordable housing programs, making it easier for first-time homebuyers to get a house and begin building generational wealth.
But when your priorities are taking care of the rich, those sorts of projects are just going to have to be funded through bake sales.
This entire tax cut was Ducey’s revenge on the education community for having the temerity to ask voters to raise income taxes on the 1% to better fund schools. Voters, who want better schools, approved the measure last year, but Ducey would never let the will of the people stand in the way of making the rich richer.
While it’s highly unlikely that the flat tax could be reversed in the Arizona Legislature (as raising taxes requires a two-thirds majority vote), there’s a chance, however slim, that this could be reversed by voters. A coalition of groups are considering whether to hit the streets with petitions to force a referendum on the measure. The Legislature has set up a bunch of minefields in recent years to make it harder to get a referendum or initiative on the ballot, so we’ll see if organizers can sidestep those challenges and persuade voters to give up $3 a month in exchange for investments in the state’s people and infrastructure.
This article appears in Jul 1-7, 2021.
In 1992, Connecticut had more jobs than AZ. Now, AZ has 1.2 million more jobs than CT. Who was the beneficiary of these 1.2 million jobs? Overwhelmingly, the poor.
Tom, being a reporter and being from Tucson, it is a matter of faith with you that taxes don’t affect job creation. Hogwash.
The most powerful comparison is New York versus Texas. Texas doesn’t have an income tax. Back in 1992, New York also had more jobs than Texas. Now, Texas has 3 million more jobs than New York. There are thirty states that don’t have 3 million jobs total.
Yes, New York and Connecticut have bloated government payrolls, but what did they do for prosperity for the poor? Precious little.
Tom, it’s you who are comforting the comfortable: the bloated government bureaucrat.
If you rank the states by tax burden over the last fifty years and compare the top ten and the bottom ten, you find the following: the states in the top ten in taxation for all fifty years created jobs at half the rate of the states who were in the bottom ten for all fifty years.
Frugal government works more effectively and job creation happens when companies are not overly burdened.
The 1%ers have been the target of every democratic scam right down to the employees (middle and lower income class) of the yacht makers because of punishing tax rates. Robbing the wealthy destroys the workers, and a poor person hires nobody.
You don’t even understand trickle down when you yell for trickle down poverty because of taxes.
Did I miss the actual flat tax rate in your story? Flat tax means the more you make the more you pay. Not a punishment but a fair and equal amount to earnings.
Stop spending. Worked at my house.
I remember a time when elected politicians just did their job for all the people they represented and not just those of their own party.
Of course, now days there isn’t a lot a free time to work on anything but a partisan political agenda with all the multimedia video and soundbites necessary to garner money from every source available — no questions asked.
All and all, the people who put Ducey in office got their money’s worth at the expense of everything except charter schools, private prisons and the wealthy.
Unfortunately, that little blip with the last presidential election will probably get him on the enemies of Donald List and keep him from consideration in the next Republican administration — after they overturn every election that doesn’t go their way and make it virtually impossible for anyone but Republicans to vote.
Putin would be proud.
Jim,
more of the same from you, I did like the cold stone comment, good one!
Mr. Huppenthal has —- not for the first time if memory serves me well — engaged in meaningless comparisons. In this instance my native state is his choice of a whipping boy. I’d like him to know that in the 2020 census Connecticut had 3,605,944 residents while Arizona had 7,151,502. Common sense tells me that goes a long way to explain why AZ today has 1.2 million more jobs than CT. And if Mr. H had just looked and seen that CT has 5 seats in the House of Representatives to AZ’s 11, he’d have recognized the population disparity. But none of that serves his purpose. Please leave my native state alone, Mr. Huppenthal.
“The far-left liberals like the communists of the past must destroy those who are threats. Unfortunately for them, the majority of Americans are their threat and President Trump is only the current leader.”-Joe Hoft
Leaders are emerging by the minute.
Response to Frankly,
Yes, by choosing higher taxes, Connecticut chose not to grow. That’s a choice. Not a good choice for the poor who need jobs, but a choice. Not a good choice for immigrants, but a choice. Not a good choice for pension funds, but a choice.
By keeping taxes reasonable at the state level, Arizona has chosen to grown. A good choice for the poor, plenty of jobs for our 80,000 high school and college graduates.
The Huppster, with mathematical logic, proves there were strawberries in the flat tax, and that Connecticut African American test scores are lower than Arizona because their taxes are higher. In fact, this is the same logic Ducey uses to prove massive tax cuts for the rich, are good for the middle class, because yacht sales are up.
So, you’re saying everyone is getting a tax cut from what they used to pay, right?
I think it was Mark Twain who made the astute observation that America is a country full of temporarily embarrassed millionaires.
Important laws like this need to be discussed in full sunshine: not when one party is absent, not passed during the night and Certainly not in a way that avoids honoring what the people of the state have voted in. This is not in anyway bipartisan or right in view of the Constitution: don’t forget “we the people.” For anyone, this tax cut policy does not have the public effect that supporting schools (public), infrastructure and other expectations of our tax dollars.
No, it is not bipartisan, the democrats cut and ran. Any across the board tax cut is good for everyone. I pay less taxes, you pay less taxes, that’s a win-win for Arizonians, All of us!
I don’t get it! Who the hell cares about Connecticut?
Speaking of huge wastes of taxpayer money, its about time we stopped throwing away hundreds of millions of dollars towards the wildland firefighting industrial complex. Like all the new roads and infrastructure in Oro Valley and Marana, wildland firefighting is essentially the poor subsidizing the rich. For people and jurisdictions who decide to build their white cookie cutter mcmansions in the wildlands, the onus should 100% be on them and their insurance companies to protect and cover losses due to wildland fire. Its time to let the “free market” sort out where and how we can build, and where we can’t.