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Tax cuts on the horizon in Arizona (yet again)

The economic shockwaves from the COVID-19 pandemic have by no means subsided. According to our recent analysis of Household Pulse Survey data, 1 in 3 households in Arizona cannot afford usual expenses, 1 in 6 renter households are behind on rent, and 1 in 8 households sometimes or often do not have enough to eat. And, these rates of hardship are higher among Arizonan households of color, households with children, and households with lower incomes (prior to the pandemic). 

Meanwhile, Arizona’s budget surplus has far exceeded forecasters’ grim expectations from the spring and summer of 2020. Instead of an estimated budget deficit of $1 billion, more recent estimates show the state with a $373 million surplus for the fiscal year that ended in June, and a $1.8 billion surplus for the current fiscal year. In this time of unprecedented hardship, it’s reasonable to suspect that leaders in Arizona’s state government would be working to use this surplus to assist those that need help now, and make critical long-term investments for all Arizonans to thrive. 

Instead, lawmakers are preparing to pass tax cuts once again for corporations and the wealthy. In recent polls and through the passage of Proposition 208 this past November, Arizonans made it clear that they want lawmakers to providing funding for programs that enable them to work, receive an education, and provide for their families. Instead of heeding the will of the voters, lawmakers seek even more tax cuts and to weaken the initiative process to raise more necessary revenue.


Major Tax Cut Legislation in Arizona - 2021 
Senate Bill 1108  Cuts taxes for individuals and maintains Arizona’s upside-down tax code where lower income households pay a greater share of their income in taxes than high-income households. 
Senate Bill 1109  Gives tax cuts priority over all spending needs by requiring the Department of Revenue, with no legislative oversight, to make annual reductions to the individual income tax rates. 
Senate Bill 1252  Cuts taxes for corporations and maintains Arizona’s upside-down tax code where lower income households pay a greater share of their income in taxes than high-income households. 
Senate Bill 1783 Disregards the will of the voters by allowing high-income individuals to bypass the tax passed by a majority of voters through Proposition 208. 
Senate Concurrent Resolution 1024  Attacks the initiative process by raising the threshold for new taxes to a two-thirds (66.7%) majority, whereas tax cuts remain a simple (50%) majority. 

This legislative session is about choices: whether the state funds vital resources so that all Arizonans have the support they need to emerge from the pandemic and move up the economic ladder, or whether the state continues to rely on fiscally irresponsible tax cuts that perpetuate inequality and shut the door on Arizona’s economic growth. 

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