June 22, 2008
Arizona Republic on Arizona?s State and Local Tax Burdens
"Low taxes: Your gain, Arizona's cash pain"
By Russ Wiles
Arizonans feeling the pinch from the real-estate slump, sluggish job market and rising gasoline prices can be thankful for one thing: a mild state-tax burden.
But those same policies are starting to exert real pressure on state government, underscored by a $2 billion budget shortfall that legislators are trying to fix.
With the notable exception of sales taxes, Arizona imposes comparatively low tax levies on residents, and the bite has gotten less severe over time.
Two decades ago, Arizona levied the fifth-highest taxes as a percentage of personal income, according to the Tax Foundation, a research group in Washington, D.C. Since then, the burden has dropped significantly because of state tax cuts and because individual incomes have risen faster than state and local tax collections, the group reported.
Except for sales taxes, which Arizonans pay at a rate above the national average, Arizona's consumer taxes are low to moderate.
Depending on your viewpoint, the state's tax policies either reflect impressive fiscal discipline at a time when the federal government routinely runs up billions of dollars in deficits, or they can starve needed programs of funding, particularly now during the state's budget crunch.
Although Arizona isn't as tax-friendly as the seven states, including neighboring Nevada, that don't impose an income tax on individuals, it still comes out looking pretty lenient.
