azleg.gov--Rep. Kirk Adams
Recognizing the need to improve business competitiveness in the state, an Arizona House of Representatives panel has approved a significant package of tax reductions for financially burdened corporations.
House Speaker Kirk Adams, R-Mesa, one of the chief architects of the plan, believes that until corporate taxes are cut, Arizona will be unable to attract the type of industry that will provide high paying jobs and a diversified tax base.
"An educated work force and a good public school system and a good higher education system are important components of a diversified economy," Adams said, “But ... those things don't matter as much if you can't even get the attention of the corporate relocation specialists, those people who are looking throughout the states across the country of where they're going to land."
Arizona businesses currently endure an assessment ratio of 21% on the full cash value of land, buildings and equipment. HB2250 would reduce that burden to 15%, much more in line with national averages from states competing for business relocations.
Naturally, the tax burden for individuals who now enjoy an artificially low 10% assessment ratio would have to rise to alleviate the revenue gap, at least temporarily. However, the bill also includes a 10% reduction in personal income taxes, a component designed to apply the tax benefit to address business owners who are corporately organized in a way where business profits are claimed on individual returns.
In a January 25th press release, House Democrats were quick to criticize the proposal, calling it a “corporate bailout package.” House Democratic Whip Chad Campbell was particularly harsh. “This is more about Republicans bailing out big corporations and the rich and giving away middle-class Arizonans’ hard-earned cash.”
Naturally, it is no surprise that any proposal which would attract businesses to the state, diversify the employment base, provide high paying jobs and shrink the budget deficit would be opposed by Democrats. Reducing any tax rate consistently results in greater tax revenue because businesses become more prosperous as do workers who get raises and more hours. The result is a higher standard of living for employees, better educational opportunities and the ability of the state to offer more and better services to its constituents.
Yet, the Democrats in the Arizona Legislature prefer the regressive path of higher taxes and more shared misery.