Governor Jan Brewer signed legislation this afternoon creating new and expanded tax cuts for business that proponents say will stimulate job growth.
The plan will let businesses use current losses to offset profits for up to 20 years, create new investment tax credits and shield more business equipment from property taxes. But the biggest item is a 25 percent cut in the capital gains tax which alone will reduce state revenues by nearly $70 million by 2019. The governor sidestepped questions of how that provision, which will reduce the tax owed when someone sells a stock in a corporation, will help the Arizona economy.
"It works all collectively together," she said. "The bottom line is that we've got states that surround us, like Texas and Nevada, they don't even have income tax. There's no competition there at all. So if we bring all of this all together, it spurs the economy. It's a package."
Sen. Steve Yarbrough, one of the architects of the plan, acknowledged the change will mainly benefit those who have money to invest.
"Folks who have the resources are the people who create jobs. You and I don't get to create very many. And so consequently it's not going to impact us very much. But for the folks who are the job creators, the entrepreneurs, you bet."
The first cuts occur in 2013.