How Arizona can cut taxes even further, without cutting spending

Opinion: Arizona Republican Sen. J.D. Mesnard has proposed a way to further cut taxes without the need to cut current spending or raise other taxes.

Scot Mussi and Grover Norquist

Arizona Republic

Republican lawmakers are advancing a proposal to further reduce Arizona’s income tax rate.

Arizonans are now benefiting from the largest tax cut in state history.

The new 2.5% flat income tax is providing a tax cut and a rate cut for every single income taxpayer.

Even better, Republican lawmakers are already working to let Arizonans keep even more of their hard-earned paychecks by ratcheting down the income tax rate over time as certain revenue targets are met.

The 2.5% flat tax — which is lower than the bottom rate of 2.59% in Arizona’s previous income tax law — is allowing an additional $1.9 billion to remain in the pockets of Arizonans every year.

GOP wants to build on this accomplishment

To build on this accomplishment, Republican lawmakers are now advancing a proposal by Senate Finance Committee Chairman J.D. Mesnard that would use surplus revenue and triggers to make further reductions to the income tax rate.

Triggers are a responsible way for lawmakers to cut taxes without the need to reduce current spending levels or raise other taxes, and without the risk of getting over their skis.

Mesnard’s idea is simple: The budget would be able to increase with population growth and inflation every year. When tax collections exceed that amount — permanently, not just one time — a portion of the excess would be returned to taxpayers in the form of permanent reductions to the income tax.


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May 2023