Lawmaker hopes to start with a switch to a flat tax.
Arizona could become the 10th state without an income tax if a group of lawmakers is successful.
“Our goal is to ultimately eliminate the income tax,” said state Rep. Darin Mitchell, a Republican from Litchfield Park. “How we get there is what we’re working on right now.”
Mitchell and a group of fellow state lawmakers are studying different models and ideas. The plan is to start by switching Arizona’s income tax to a flat tax, and then work toward total elimination of the tax.
“Personally, I’d like to see the elimination of both personal and corporate taxes,” Mitchell said. “We’re looking at ways to have it graduated, in steps, to eliminate the taxes. Part of the plan is, maybe, in a period of five, six, seven years, ratcheting down the collection rate until it’s at zero.”
Mitchell said it’s too early to say what the flat tax would be. The legislature’s regular session doesn’t begin until January.
The state’s economy is driven by development and real estate, which haven’t fully recovered from the Great Recession, and getting rid of the income tax would be a way to turn things around, Mitchell said.
“What we’re looking at is not a revenue-neutral bill. We actually want to see a tax cut,” he said. “For a lot of people with capital problems, there’ll be more money in their pockets to grow their business, which in turn will help our economy to thrive.”
Mitchell, who also serves as chair of the House Ways and Means Committee, anticipates support from Gov. Doug Ducey.
A 2015 report from the Center for the Study of Economic Liberty at Arizona State University said eliminating the income tax would be possible over six to eight years in part by relying more on sales taxes.
