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Wall Street Journal: A Big Taxpayer Victory in Arizona

March 18, 2022

The Wall Street Journal editorial board makes it clear: The Goldwater Institute just struck a resounding blow against leftists who sought to transform the Grand Canyon State into the next California—a high-taxing, reckless-spending, and job-killing state.

In an editorial Tuesday titled “A Big Taxpayer Victory in Arizona,” The Journal shined a national spotlight on Goldwater’s courtroom victory over Proposition 208, the largest tax hike in Arizona’s history:

Arizonans who fled California for sunnier tax climes can breathe easier after a court ruling that has saved the day from a punitive 8% top state tax rate…

Nixing the surtax means Arizona will soon have a flat tax of 2.5% on individual incomes, the lowest flat rate among states with an income tax. Gov. Doug Ducey slashed the previous 4.5% top rate in his 2022 budget, and the flat 2.5% rate will phase in by 2024. If the 4.5% rate and the surtax had stayed in place, a combined 8% top rate would have given Arizona the 10th-highest state income tax rate.

Fueled by a campaign of class-warfare and false information—and funded by unions and out-of-state special interests—Proposition 208 sought to double the income taxes imposed on small-business owners and individuals making over $250,000 a year. The Goldwater Institute filed a lawsuit challenging the initiative for violating the state Constitution’s restrictions on spending and taxation, making the case on behalf of taxpayers, small business owners, and legislators. The tax increase would have led to staggering job loss, and turned Arizona from one of the lowest-taxed states in the country to one of the highest.

“Tax competition has helped Arizona draw residents and businesses from neighbors like California, but the surtax would have sent the Grand Canyon State down a Golden State path,” The Journal noted. “The tax’s $250,000 income threshold made it a particular burden on small businesses that pay taxes under the individual code.”

Moreover, despite teachers union claims that the end of Prop. 208 “would rob funding from hard-up school districts,” lawmakers have taken significant action to increase education funding, The Journal noted.

Goldwater’s win means Arizona will soon have the lowest flat income tax rate of any state in the nation that taxes income. And with this victory, Arizona is sending an anti-tax, pro-economic growth message to the entire country.

As The Journal put it: “Taxpayers in other states, take note.”



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