New single rate income tax a welcome bulwark against advancing recession, inflation
PHOENIX, Oct. 11, 2022—Today’s release of NFIB’s monthly Optimism Index showed little change from the dismal readings of the nine months prior, but the Arizona state director for the association that publishes the index predicted Arizona is much better prepared to weather more economic headwinds than other states.
“Small business owners in Arizona were elated at the recent announcement that state General Fund revenues have exceeded the legal thresholds required to implement the 2.5 percent individual income tax rate in the upcoming year,” said Chad Heinrich, Arizona state director for the National Federation of Independent Business (NFIB).
“Many small businesses are organized as sole proprietorships, partnerships or other entities that require the income for the business to be reported on the business owner’s personal income tax return. Gov. Doug Ducey’s recent announcement of the accelerated effective date of the new rate will provide tax certainty for these businesses as we move toward the start of the new year.
“Our small businesses will now pay a single, 2.5% income tax rate on all their business income in the new year. This rate reduction and simplification will help all small business owners through what looks to be a tough year with a possible recession and economic downturn on the horizon. It will be good to have the lowest single rate income tax in the nation to subdue the upcoming economic headwinds.”
From NFIB Chief Economist Bill Dunkelberg on Today’s Optimism Index
“Inflation and worker shortages continue to be the hardest challenges facing small business owners. Even with these challenges, owners are still seeking opportunities to grow their business in the current period.”
Key findings from today’s Small Business Optimism Index include:
- Owners expecting better business conditions over the next six months decreased two points from September to a net negative 44%.
- Forty-six percent of owners reported job openings that were hard to fill, down three points from August and remaining historically high.
- The net percent of owners raising average selling prices decreased two points to a net 51% (seasonally adjusted).
- The net percent of owners who expect real sales to be higher increased nine points from August to a net negative 10%.
- The NFIB Uncertainty Index decreased two points to 72.
Keep up with the latest on Arizona small business news at www.nfib.com/arizona or by following NFIB on Twitter @NFIB_AZ
For almost 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since its founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.