Arizona’s Low-Income Families Have the Most “Skin in the Game” When it Comes to Paying State and Local Taxes
Arizonans with modest earnings contribute a much larger share of their income to support schools, roads and other public assets than do better-off households, according to a new CAA report. The report, called Skin in the Game, shows that even those who earn too little to owe income taxes pay proportionately more in other taxes than upper-income Arizonans. At the same time, Arizona’s tax code provides numerous ways for profitable corporations and wealthy individuals to pay less in state and local taxes.
“We hear it repeated time and time again in Washington, D.C. and here in Arizona that families with low incomes don’t pay their fair share of taxes and should have more ‘skin in the game,'” said Dana Wolfe Naimark, President and CEO of Children’s Action Alliance. “The facts show just the opposite. Arizonans with the very highest incomes actually have the very least skin in the game.”
The new report illustrates how both upper-income households and profitable corporations can use a variety of tax credits to completely wipe out their state income tax bill. Key findings include:
- Arizona households earning less than $20,000 spend $12.50 out of every $100 of their income on state and local taxes; the wealthiest Arizonans spend less than half that. Those earning $437,000 or more spend only $5.60 out of every $100 of their income on taxes.
- Nearly three out of four of corporations paid just $50 in income tax, the legal minimum. Fewer than one in ten corporations paid $5,000 or more.
- When fully phased in, cuts to corporate income and property taxes, combined with the many corporate tax credits passed during the last six years, will cost the state $778 million each year. That would be enough to fund all-day Kindergarten statewide, help families afford child care, provide health insurance to children in working families, build and repair schools, and buy new equipment for K-12 classrooms and campuses.
Read the full report here.