Today the Arizona Free Enterprise Club in partnership with several other organizations sent a letter to the Governor and members of the Legislature urging them to return any additional revenue generated from the Tax Cuts and Jobs Act passed in Washington D.C.  The letter was as follows:

On behalf of the undersigned organizations, we write to urge Governor Ducey and the legislature to return to the taxpayers any additional revenue being collected by the state as a result of federal tax reform.

There is little doubt that the Tax Cuts and Jobs Act passed in Washington DC represents a big win for Arizona workers and job creators. The TCJA provided long overdue tax relief, cutting both individual and corporate rates while simplifying the tax code.

Already the benefits of tax reform have born fruit, with over $175 million put back into the pockets of Arizona families through bonuses, wage increases, expanded benefits and utility rate cuts. This number will only grow larger as the individual tax rate reductions kick in next month. Coupled with increased business investment from the corporate rate cuts and full expensing, the prospects for a booming Arizona economy have never been higher.

While this is all good news, last week the Department of Revenue released their conformity report showing that Arizona taxpayers will end up paying as much as $250 Million more in state income taxes in FY 2019 as a result of the federal changes. The number could climb to over $300 million in FY 2020.

We understand that this tax increase was a result of historical conformity practices and was not caused by any direct action taken by Arizona policy makers. Nevertheless, conforming our tax code in a way that does not return this money back to hardworking taxpayers would be a disastrous income tax increase that would undo many of the benefits of tax reform.

That is why we urge state policy makers to return this money back to hardworking taxpayers and head off an unnecessary and economically destructive state income tax increase.  It is the right action to take to ensure that the recently enacted federal reforms deliver on their anticipated benefits.


Scot Mussi                                                 Victor Riches
President                                                   President & CEO
Arizona Free Enterprise Club               Goldwater Institute

Tom Jenney                                               Farrell Quinlan
Senior Legislative Advisor                     Arizona State Director
Americans for Prosperity AZ                 NFIB

Grover Norquist
Americans for Tax Reform