Arizona business community slams proposed tax increases in huge budget bill
September 21, 2021
More than 50 Arizona business groups are urging the state’s congressional delegation to reject several tax increases included in the budget bill being considered by the U.S. House.
In a letter sent Tuesday to the delegation, the groups said, “The proposed tax increases that will pay for the massive $3.5 trillion reconciliation package will hurt Arizona businesses, employees, and consumers at a time when the state’s economy continues to grapple with the ongoing effects of the pandemic and acute workforce shortages.”
Signers of the letter included the Arizona Chamber of Commerce & Industry and local chambers of commerce from across the state, as well as groups representing various industries such as real estate, trucking, construction, tourism and agribusiness.
The enormous multi-trillion-dollar budget bill is a priority of Congress’ most progressive members, who are demanding its passage as part of a deal also to pass an infrastructure bill already passed by the U.S. Senate with bipartisan support.
A budget bill that is too large in size and scope, however, will face a difficult path in the Senate, where the Senate parliamentarian will determine how broad the bill’s policy provisions may be and where Sen. Kyrsten Sinema, D-Ariz., and Sen. Joe Manchin, D-W.V., have indicated their strong reticence to passing such a progressive bill.
Sinema has already said she will not support a $3.5 trillion bill and on Monday Politico reported that she also opposes a Medicare prescription drug pricing scheme included in the bill.
Arizona job creators are opposed to the bill’s many tax increases, including increases in the personal and corporate income tax rates, as well as tax increases on foreign earnings and on savings and investment and more. The bill also limits deductions taxpayers rely on to reduce their overall tax exposure.
“This bill includes several policies that will harm small businesses,” said Chad Heinrich, Arizona state director for the National Federation of Independent Business. “Whether it’s through the elimination of stepped-up basis, limiting the Small Business Deduction, or increasing taxes on small corporations, this legislation will weaken and damage small businesses in Arizona and throughout the country. By hitting small businesses at this vulnerable time, this legislation will result in fewer jobs and less work hours for employees and reduced investment in small businesses which will lead to less economic growth.”
Buckeye Valley Chamber of Commerce President and CEO Deanna Kupcik said the bill would result in higher costs to utility ratepayers.
“As we said in our letter, because utility providers are regulated by the Arizona Corporation Commission, they must pass along the increased costs resulting from the corporate rate increase directly to consumers,” Kupcik said. “That means more dollars off the bottom line of Arizona businesses large and small.”
If and when a bill passes the House, it will head to the Senate, where it will be considered under that chamber’s reconciliation rules, which means only a simple majority of 51 is needed for passage, rather than the usual 60 votes required to end a filibuster.
“That (Senate Majority Leader) Chuck Schumer is hoping to jam this through the Senate using reconciliation tells you all you need to know about what’s included in this bill,” Arizona Chamber President and CEO Danny Seiden said. “A bill that affects so many aspects of the U.S. economy deserves bipartisan consideration and support, which this legislation is sorely lacking. We thank Sen. Sinema for making clear to the White House that this bill is seriously flawed.”