NCPA - National Center for Policy Analysis

THE RIGHT TAX PLAN FOR ARIZONA

April 16, 2010

The best possible tax code for Arizona is one that is neutral, broad based, transparent and with rates that are as low as possible.  Last year, the Speaker of the Arizona House Kirk Adams and Representative Rick Murphy led an effort to move in that direction by eliminating tax exemptions, exclusions, and credits in exchange for lower rates across-the-board.  Under these principles, there would be fewer disruptions in the private economy, less corporate welfare, and a broader tax base, says the Goldwater Institute. 

This year, Speaker Adams crafted a bill that embodies a little bit of everything.  Broad-based cuts in corporate income taxes, personal income taxes, and property taxes are sound elements in the bill.  If those portions of the package are in place when Arizona's economy begins to rebound, the state will be on solid footing.  The bill still has its flaws, says the Institute: 

  • Aside from tax cuts that apply to all, the bill has new benefits for certain industries, including a host of new tax credits and an expansion of enterprise zones.
  • This is a mistake; this is an endorsement of the current Swiss cheese tax structure and a mistaken affirmation that government does indeed know how to best manage the economy. 

During testimony on this bill, Democrats argued in support of the new credits and targeted subsidies. They praised the notion that the bill subsidized the "right kind" of jobs.  On a recent Sunday morning news program, Rep. Kyrsten Sinema said she and fellow Democrats oppose across-the-board tax cuts in Adams' bill, and instead favor concepts like targeted tax credits for solar companies. 

Lawmakers do not need to appease special constituencies.  If they truly believe in a fairer, simpler tax code, then advance proposals to accomplish those things, says the Institute. 

Source: Steve Voeller, "The Right Tax Plan for Arizona," Goldwater Institute, March 2, 2010. 

 

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