Among the flurry of special interest tax breaks the Free Enterprise Club opposed this session, one was able to make its way to the Governor’s desk. The Angel Investor Tax Credit program, a bill The Club fights every year, passed out of the House on the last day of session and is awaiting action by Governor Ducey.
Under HB 2191, $10 Million would be allocated in tax credits to wealthy investors to subsidize their risky business ventures. In the words of Robert Robb from the Republic, “The state is stumping for a third of the investment but getting no stake in any returns. That’s not really an incentive. That’s being played for a sucker.”
This tax credit giveaway is even harder to swallow considering that the legislature allocated only $12 Million in income tax relief for all taxpayers when it increased the personal exemption in the budget. Why should special interests get $10 million in tax breaks when hardworking taxpayers only get $12 million?
The Free Enterprise Club urges Governor Ducey to VETO HB 2191. Taxpayers should not be in the business of subsidizing risky venture capital investments by wealthy investors. It’s a program that picks winners and losers among taxpayers, among venture capital investors, and among aspiring entrepreneurs.
Unfortunately, Governor Ducey sided with wealthy investors over taxpayers and signed HB 2191. The Club will continue to monitor this giveaway very closely to see how our tax dollars are wasted over the next four years. The early prediction is that the Arizona Commerce Authority and the politically connected investors will identify the low risk/safest investments possible (ones that would have received funding regardless of the credit) in order to declare the program a success. Be prepared to see them at the capitol again pushing these “success stories” looking for more taxpayer cash.