Study: Richest Arizonans Benefit Most In Proposed GOP Tax Plan

By Jill Ryan
Howard Fischer, Capitol Media Services
Published: Tuesday, May 25, 2021 - 9:05am

A study prepared by the Institute on Taxation and Economic Policy looked at the $12.8 billion spending plan introduced in the Arizona House, along with its proposed $1.5 billion in permanent tax cuts.

Ultimately, the plan drawn up by Republican leaders, creates a 2.5% flat income tax rate for all Arizonans, regardless of income. The institute's study indicated that the top 1% of Arizonans would receive more than half of those $1.5 billion tax cuts, while 80% of all Arizonans would receive 7%. 

"We are coming out of an economic crisis where thousands of low and middle-income Arizonans are struggling. And yet we are going to pass a huge tax cut for the rich rather than taking the opportunity to invest in our communities. And I think that that's just wrong," said David Lujan, director of the progressive-leaning Arizona Center for Economic Progress.

The plan will also help the richest Arizonans avoid the full impact of a voter-approved tax surcharge that would help fund K-12 education.

Some details in the package already were known, ranging from additional cash to give pay raises to Arizona Department of Public Safety officers and civilian staff to increasing funding for gifted and special needs students.

But the package also contains a laundry list of some major policy changes that were never approved on their own. Instead, they are being put into a take-it-or-leave it package of budget bills, including:

  • Prohibiting state universities from requiring students or staff to show they have been vaccinated against COVID-19.
  • Dismissing charges of driving without license plates if the person gets them before a court date.
  • Allowing corporations to divert more of what they would owe in state income taxes to provide scholarships for students to attend private and parochial schools.

It also includes a list of which roads — and between which mile markers — the state will spend money to improve payment.

Lawmakers also are moving to strip Secretary of State Katie Hobbs of her ability to settle any lawsuits challenging state election laws.