Arizona Gov. Doug Ducey has set the wheels in motion for the largest personal income tax cut in the state's 109-year history.
"Each and every Arizona taxpayer, no matter their income, will experience a tax cut under our historic tax reform. That means job creators will continue to choose our state to expand operations, working families will get to decide how they spend more of their hard-earned dollars, and those who served our nation will rightfully keep more of their own money." Ducey went on to say the budget gives money back to taxpayers while paying down debt.
The tax cut contained in the budget implements a 2.5% flat tax phased in over three years, beginning on Jan. 1.
Arizona's current progressive income tax contains four tiers that top out at 4.5%. The reduction will reduce income tax revenue by an estimated $1.7 billion annually.
The impetus for the tax cut comes from the passage of Proposition 208 in 2020.
The change essentially adds a new tax bracket for noncorporate taxpayers and businesses filing as pass-through entities in the form of a 3.5% surcharge on single-filer income over $250,000.
The budget also will cap the percentage of income tax an individual can pay at 4.5%, lowering high-earning taxpayers' contribution to the state's various channels to 1% after their Prop.
https://justthenews.com/nation/states/arizonans-see-largest-tax-cut-state-history
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