Lone Republican Derails Arizona Flat Income Tax Proposal
Arizona Republicans weren’t able to convince one defecting member of their caucus to vote in favor of their budget that scraps the state’s progressive income tax brackets for one flat rate.
Rep. David Cook, a Globe Republican, voted against all Republican-sponsored amendments to budget bills Monday that others in his party had agreed on, leaving the bills at a 30-30 stalemate.
Cook has been vocal about the proposed flat tax, saying it cuts taxes too low when the state should pay down debt or repurchase buildings the state sold and now are leasing.
House Majority Leader Ben Toma, R-Peoria, deflected Cook’s assertions the state would end up in dire fiscal straits just as Kansas did when it eliminated its state income tax.
Toma said Arizona’s growth is expected regardless of whether the state flattens its income tax with his legislation, something Kansas couldn’t say.
Taking offense to Toma’s inference that Cook opposed the theory in general, he asked, “You don’t think I don’t want to cut taxes?”
Toma replied, “I think we’re about to find out.”
Cook’s subsequent votes against the budgetary proposals mean the GOP will either have to capitulate and propose a smaller cut or convince a Democrat to vote for their bills.
If enacted, the GOP-sponsored budget would gradually lower the state’s four tax brackets to a single 2.5%. It also would cap the total tax rate at 4.5%, including the 3.5% tax from Proposition 208, which affects single filers making more than $250,000 and $500,000 for those filing jointly.
The current lowest income tax rate is 2.59% for income below $27,272. If Prop. 208 survives legal scrutiny, the combined top marginal income tax rate would increase to 8%, putting Arizona among the 10 highest marginal rates in the country.
Democrats, in the minority by one member, were unified in their opposition to the $1.5 billion tax cut.
“We can never be Texas and Nevada unless we have gambling all over the state or we strike oil,” House Minority Leader Charlene Fernandez, D-Yuma, said. “We are Arizona, and we should start listening to our Arizona citizens.”
They criticized Republicans for amending bills late at night and giving legislators a short time to read the proposed changes before voting on them.
Having failed to pass any of their proposed budgetary items, lawmakers adjourned until Thursday, the deadline they had given themselves to send a budget to Gov. Doug Ducey. Lawmakers have until the end of June before the budget they’re debating goes into effect, as is required in the state constitution.
If they cannot agree and send a set of bills to Ducey, the state will enter into nearly uncharted territory. Illinois lawmakers and former Gov. Bruce Rauner once locked horns for nearly two years over the budget, resulting in Democrats raising taxes after seeing the state’s reserve funding depleted and forming a backlog of bills worth billions of dollars.
This article was published on June 8, 2021 and is reproduced with permission from The Center Square.
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