Proposed Flat Tax Falls Flat for Most Arizonans
The Arizona State Legislature is poised to permanently cut over $1B in state revenues, the largest tax cut in the last three decades. This cut will make Arizona’s tax system more regressive than it is today with 91% of the tax cuts going to people in the top 20% of incomes.
The proposed tax cut is based on a 2.5 percent flat tax, with 91 percent of tax cuts benefiting the top 20 percent of income earners— residents earning $108,000 or more in taxable income. A flat tax will continue Arizona’s increasing dependency on regressive sales taxes to fund state needs. Reducing revenues by $1.4 billion a year will make it virtually impossible to adequately fund public schools, universities, infrastructure and other important needs in the future. While it only takes a simple majority of legislators to pass a tax cut, it takes a supermajority to reverse tax cuts or raise revenue.