AZ Budget Priorities: Massive Tax Cut for the Wealthiest 1% OR Invest in the Education of At-Risk K-12 StudentsMay 21, 2021
Grand Canyon Institute Policy Brief
May 21, 2021
AZ Budget Priorities:
Massive Tax Cut for the Wealthiest 1%
OR Invest in the Education of At-Risk K-12 Students
Budgets are about values and priorities.
One key question for Arizona policymakers is whether to cut taxes for 30,000 of Arizona’s wealthiest at a cost of $826 million or invest that money in providing targeted educational support for 600,000 at-risk K-12 students to improve their opportunities for success.
On May 18, Governor Ducey and Republican legislative leaders agreed in principle to massive tax cuts for wealthy Arizonans.
One component of the proposed tax cuts protects the wealthiest 1% of Arizona tax filers from Prop. 208, which voters approved in November 2020 to provide additional resources to education. The in-principle agreement announced earlier this week reduces the state income tax rate from 4.5% to 1% on taxable incomes above $250,00 for single filers and $500,000 for married filers, bringing their overall income tax rate to 4.5%. A married tax filer with $1.5 million in taxable income would see their tax obligation reduced by $35,000 under this proposal. This tax proposal has a budgetary cost of $826 million that would benefit about 30,000 tax filers in Arizona.
Budgets reflect values and priorities.