There were some concerns last night that HB2015, the tax package included in the budget deal, would in fact violate Americans for Tax Reform’s Taxpayer Protection Pledge. Following a flurry of late-night emails and phone calls, ATR confirmed this afternoon that HB2015 does not violate the pledge. ATR advises that there are a number of moving parts that could change the Pledge implications of any potential budget agreement.
The tax package includes:
The repeal of the state equalization tax ($250 million annually)
Personal income tax cuts (6.6% across-the-board) that begin in calendar year 2011 ($200 million annually)
Corporate income tax cuts (30% reduction) that begin in calendar year 2011 ($200 million annually)
Refers to the ballot a temporary suspension of the limitation of the legislature’s power to appropriate or divert funds from voter-approved initiative. This section is repealed on July 1, 2013.
Refers to the ballot a temporary sales tax increase and a spending cap of $10.2 billion for 3 years. In the first 24 months the tax goes from 5.6 to 6.6%. In the last 12 months it goes from 6.6 to 6.1%. It is repealed July 1, 2013.
Again, the Club opposes the sales tax, but the trade-off for the above tax cuts is worth the risk of referring it to the ballot. These significant tax cuts will not only help Arizona rebound from the current recession, they will benefit our economy for years to come.