PHOENIX – David Livingston said his proposal to cut by nearly half taxes owed by corporations doing business in Arizona will produce jobs by luring companies to the state.
The GOP …
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PHOENIX – David Livingston said his proposal to cut by nearly half taxes owed by corporations doing business in Arizona will produce jobs by luring companies to the state.
The GOP members of the Arizona House of Representatives agree with the Peoria Republican and approved his bill that would drop Arizona’s current tax rate from 4.9 percent to 2.5 percent in 2026. The measure passed Tuesday on a 31-29 party-line vote.
Legislative budget staffers say the change, when fully implemented, will reduce state revenues by nearly $670 million a year.
House Minority Leader Andres Cano, D-Tucson, called it "corporate welfare.''
"What I'm trying to do,” Livingston said, “is make Arizona even a better place for businesses from California to move to Arizona and hire our citizens and produce jobs.
"This bill will help us do that.''
Cano said that logic is flawed.
"You can point a narrative in the direction of supporting jobs, supporting business,'' he said.
"But if we want to invest in all of those things that are supercritical for our economy, this bill will actually hamper our ability to do that,'' Cano said.
"We want, as House Democrats, to invest in Arizonans, not corporations.''
But Livingston said the tax reduction will promote economic development.
"If we look at our region, there's states right around Arizona that have a lower tax than ours,'' he said. Livingston said the Tax Foundation ranks Arizona No. 23 in "overall tax competitiveness.''
But the Tax Foundation shows that California and New Mexico have higher rates, with Utah barely below Arizona at 4.85% and Colorado at 4.4%.
Texas and Nevada have no corporate income tax but instead a gross proceeds tax. And of the states with a corporate income tax, the organization shows Arizona currently having the 37th lowest rate.
David Lujan, CEO of the Children's Action Alliance, has questioned the need for further relief for corporations who in 2013 were paying an income tax rate close to 7%.
He said 79% of corporations pay only the $50-a -year minimum state tax. Lujan said many companies can reduce their reported profits because of various tax credits the state makes available to corporations.
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