The race to attract and retain jobs is on, and economic development organizations should take note. Targeted tax incentives and credits are little more than child's play. Like Arizona's 10 percent across-the-board income tax cut earlier this year, the real action is in broad-based tax relief. But as other states join the fray, Arizona's cut is only a baby step.
Since becoming New Mexico's governor in 2002, Bill Richardson has reduced income tax rates 35 percent. Richardson said he was tired of losing business to lower-tax states like Arizona. When he signed the tax cut bill, Richardson declared New Mexico "open for business."
Last week, Utah became the first state in the country to offer taxpayers the choice between filing income taxes under a new flat tax or remaining in the current graduated system. Pundits believe many small businesses will gladly opt for the flat tax. As if that weren't enough, Utah lawmakers say it's only the first step in what promises to be comprehensive tax reform.
All this friendly tax-cutting competition benefits taxpayers. As people and businesses continue to flee high tax states like Michigan, New Jersey, and California, states that continually ratchet their taxes down will benefit tremendously. With neighbors like ours, Arizona can't afford to be complacent.
Steve Voeller is president of the Arizona Free Enterprise Club.