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ATRA staff annually reviews the budgets of Arizona’s 15 counties to ensure compliance with budget and tax laws. This report includes information compiled during meetings between ATRA staff and county officials and their adopted budgets.
An initiative has resurfaced to nearly double Arizona’s top personal income tax rate. The proposal is similar to the 2018 effort insofar as it has the odious distinction of making Arizona far less business friendly while not providing significant new revenue to K-12. Riding the recent populist political wave, the authors did not have the courage to ask all Arizonans to pay for a tax increase for public education. Instead, they cynically pit the majority against a tiny fraction of income taxpayers, hoping that taxing “someone else” for increased spending will improve their chances at the ballot. This white paper will show that this poorly conceived tax increase will not create a sustainable source of funding that is worth the economic malady it will cause. Invest in Ed is disastrous public policy, deleterious to Arizona’s economy, and provides only uncertain benefits to schools.
ATRA in the News
While there are potential setbacks on the horizon, the economic outlook ahead looks surprisingly bright, state and national economists and budget analysts said Thursday at the annual conference of the nonprofit Arizona Tax Research Association (ATRA).
Sean McCarthy of the Arizona Tax Research Association is undoubtedly correct that Proposition 208’s additional teacher compensation is highly unlikely to be channeled into base pay.
"There’s no other state in the union that takes the most volatile tax bracket, and says we're going to dedicate this portion of it to K-12." said Sean McCarthy, a senior research analyst for the Arizona Tax Research Association, a watchdog group that advocates for efficient government fiscal policy.
“This isn’t complicated. This is basic tax policy 101,” McCarthy said. “Arizona corporations are subject to a 4.9% corporate income tax rate. Small businesses, including S corps, limited liability companies (LLCs), partnerships, and sole proprietorships, are pass-through entities and pay taxes on the individual income tax code. Proposition 208 proposes to raise the top individual income tax rate to 8%, which means some small businesses owners will pay a higher tax rate than large corporations.”