The state Senate passed a 2008 budget yesterday, but the state House had to put their budget vote on hold. Now what?
It would be in the best interest of Arizona for the House to approve their plan early next week and stop the Senate's runaway freight train of a budget.
Both chambers have developed roughly $10.6 billion budget proposals. But, the House budget plan reflects a better balance between additional state spending and encouraging private sector economic growth. The House plan includes a 2.5 percent reduction in corporate income taxes, while the Senate includes higher spending on health and welfare programs, but no income tax cuts.
Reducing the corporate income tax should be a priority for policymakers. Here's why:
- At 6.968 percent, Arizona has the 23rd highest corporate income tax rate in the country.
- Arizona's corporate income tax rate is higher than western states Colorado, Utah, Oregon, Wyoming, Nevada, Texas, and Washington.
- Of over 51,000 Arizona corporate income taxpayers, 14,000 paid more than $522 million in income taxes.
- Arizona's corporate income tax rate is 35 percent higher than the top personal income tax rate, creating a disincentive for Arizona businesses to organize as subchapter C corporations.
Here's hoping when the legislative session dust settles the House tax relief plan is still standing.
Steve Voeller is president of the Arizona Free Enterprise Club.
-Goldwater Institute: Dollars and Sense: How Arizonas Spending Choices Affect Our Future
-Arizona Republic: Bipartisan backing helps push state spending plan through Senate
-Arizona Free Enterprise Club