Sponsor puts flat tax bill on hold
March 29, 2011 3:36 PM
At least for this session, a proposed flat tax bill that would have done away with several deductions, including mortgage interest write-offs, on state income tax returns is on hold.
But even if HB 2636 had become law, that provision wasn't expected to be a deciding factor in whether someone will buy a house.
“The Arizona tax is such a small percentage of the federal tax, I don't think it will impact the housing market,” said accountant Page Misenhimer.
He noted that the deduction may amount to only a couple hundred dollars on the state return versus thousands of dollars on federal taxes.
“If they're that tight, they shouldn't be buying a house anyway,” he said.
Realtor Vicki Bardo agreed. “In and of itself, I don't see it as a big issue. I think people will buy a house because they want to whether or not they get the tax write off.”
And since loss of the state deduction wouldn't have affected federal taxes, she said, “I don't see it as a huge problem.”
For now, though, it won't be an issue at all. The bill's sponsor, Rep. Steve Court, R-Mesa, announced Monday that he has decided not to push for the legislation this session to allow time to resolve issues with the bill. It had been approved by the House of Representatives and a Senate panel but hadn't gone to the floor of the Senate when he made his decision.
“Although I am still supportive of the flat tax concept, and I believe that the bill is a great framework to incorporate this type of policy for Arizona, a number of legitimate questions have been raised that will take some time to properly sort through,” Court said in an email to legislators that Rep. Lynne Pancrazi, D-Yuma, shared with the Yuma Sun.
“Therefore I am having the bill held for this session, and will work through the issues during the interim through a series of stakeholder meetings,” Court continued in his email. “In addition to working out the finer details, we will also work on the message and education of constituents so that the flat tax concept is better understood.”
Rep. Russ Jones, R-Yuma had supported the bill, saying he wanted to “move the discussion forward ... We do have to rethink revenues necessary to run state government that are more consistent and transparent. The flat tax has many of those attributes. I appreciate Rep. Court taking the bill as far as he did to help spur the necessary dialogue.”
Pancrazi had voted no on HB 2636, saying she thought Court had “picked and chose” which deductions to eliminate. And the one that bothered Pancrazi the most was the proposed the loss of deductions for charity donations.
“Conceptually, I like the idea of a flat tax,” said Sen. Don Shooter, R-Yuma. “I like the idea of closing loopholes. The Constitution does say that taxes should be fair and equal. But there's too many exemptions on both ends of the extreme for both the very wealthy and the very poor and the burden is borne by those in the middle.”
Shooter expressed concern, though, that HB 2636's proposed changes to the state tax code might have tried to do too much too fast.
“It's taken a long time to get the system we have now,” he said. “It will be difficult to change abruptly.”
Misenhimer said the proposed flat tax wouldn't have helped the cash-strapped state because it wouldn't have raised any additional revenue, just shifted the tax burden. “The state is broke ... tax neutral won't help the state.”
Joyce Lobeck can be reached at jlobeck@yumasun.com or 539-6853.
But even if HB 2636 had become law, that provision wasn't expected to be a deciding factor in whether someone will buy a house.
“The Arizona tax is such a small percentage of the federal tax, I don't think it will impact the housing market,” said accountant Page Misenhimer.
He noted that the deduction may amount to only a couple hundred dollars on the state return versus thousands of dollars on federal taxes.
“If they're that tight, they shouldn't be buying a house anyway,” he said.
Realtor Vicki Bardo agreed. “In and of itself, I don't see it as a big issue. I think people will buy a house because they want to whether or not they get the tax write off.”
And since loss of the state deduction wouldn't have affected federal taxes, she said, “I don't see it as a huge problem.”
For now, though, it won't be an issue at all. The bill's sponsor, Rep. Steve Court, R-Mesa, announced Monday that he has decided not to push for the legislation this session to allow time to resolve issues with the bill. It had been approved by the House of Representatives and a Senate panel but hadn't gone to the floor of the Senate when he made his decision.
“Although I am still supportive of the flat tax concept, and I believe that the bill is a great framework to incorporate this type of policy for Arizona, a number of legitimate questions have been raised that will take some time to properly sort through,” Court said in an email to legislators that Rep. Lynne Pancrazi, D-Yuma, shared with the Yuma Sun.
“Therefore I am having the bill held for this session, and will work through the issues during the interim through a series of stakeholder meetings,” Court continued in his email. “In addition to working out the finer details, we will also work on the message and education of constituents so that the flat tax concept is better understood.”
Rep. Russ Jones, R-Yuma had supported the bill, saying he wanted to “move the discussion forward ... We do have to rethink revenues necessary to run state government that are more consistent and transparent. The flat tax has many of those attributes. I appreciate Rep. Court taking the bill as far as he did to help spur the necessary dialogue.”
Pancrazi had voted no on HB 2636, saying she thought Court had “picked and chose” which deductions to eliminate. And the one that bothered Pancrazi the most was the proposed the loss of deductions for charity donations.
“Conceptually, I like the idea of a flat tax,” said Sen. Don Shooter, R-Yuma. “I like the idea of closing loopholes. The Constitution does say that taxes should be fair and equal. But there's too many exemptions on both ends of the extreme for both the very wealthy and the very poor and the burden is borne by those in the middle.”
Shooter expressed concern, though, that HB 2636's proposed changes to the state tax code might have tried to do too much too fast.
“It's taken a long time to get the system we have now,” he said. “It will be difficult to change abruptly.”
Misenhimer said the proposed flat tax wouldn't have helped the cash-strapped state because it wouldn't have raised any additional revenue, just shifted the tax burden. “The state is broke ... tax neutral won't help the state.”
Joyce Lobeck can be reached at jlobeck@yumasun.com or 539-6853.
