The best possible tax code for Arizona is one that is neutral, broad based, transparent, and with rates that are as low as possible. Last year, the Speaker of the Arizona House Kirk Adams and Representative Rick Murphy led an effort to move in that direction by eliminating tax exemptions, exclusions, and credits in exchange for lower rates across-the-board. Under these principles, there would be fewer disruptions in the private economy, less corporate welfare, and a broader tax base.
This year, Speaker Adams crafted a bill that embodies a little bit of everything. Broad-based cuts in corporate income taxes, personal income taxes, and property taxes are sound elements in the bill. If those portions of the package are in place when Arizona's economy begins to rebound, we'll be on solid footing. But the bill has its flaws.
Aside from tax cuts that apply to all, the bill has new benefits for certain industries, including a host of new tax credits and an expansion of enterprise zones. This is a mistake. This is an endorsement of the current Swiss cheese tax structure and a mistaken affirmation that government does indeed know how to best manage the economy.
Don't just take our word for it. During testimony on this bill, Democrats argued in support of the new credits and targeted subsidies. They praised the notion that the bill subsidized the "right kind" of jobs. That's getting pretty picky in a state that has shed 300,000 jobs since December 2007. There are many out-of-work Arizonans who would like some say as to whether a job is "right" for them.
These comments are not isolated. On a recent Sunday morning news program, Representative Kyrsten Sinema said she and fellow Democrats oppose across-the-board tax cuts in Adams' bill, and instead favor concepts like targeted tax credits for solar companies.
Lawmakers don't need to appease special constituencies. If they truly believe in a fairer, simpler tax code, then advance proposals to accomplish those things.
Steve Voeller is president of the Arizona Free Enterprise Club.
Goldwater Institute: How to Restructure Arizona's Tax Code: A Smarter, Flatter Tax Plan to Create Jobs
Goldwater Institute: Cut the corporate income tax to create jobs
Goldwater Institute: Cut taxes, don't raise them