Keeping true to President Trump’s promise, tax cuts keep putting money in the pockets of hardworking Americans. The economy is gaining strength with the help of tax savings, as job creators share the wealth with their employees.
The Tax Cuts and Jobs Act changed several important aspects of our tax code for both businesses and individuals. The corporate tax rate was reduced from 35 percent to 21 percent, while small businesses can take a 20 percent deduction and see the remainder of their income charged at individual rates. For individuals, Congress reduced our tax rates and nearly doubled the standard deduction to $24,000 per married couple.
One way corporate tax savings will benefit Arizona consumers is through a reduction in utility bills. Last month, I proposed a process for the Arizona Corporation Commission to efficiently reduce utility bills and pass this income tax savings on to customers. In February, the Commission acted on that proposal requiring utilities to take action within the following 60 days. For customers of Arizona Public Service (APS), the state’s largest taxable utility, this reduction will decrease average residential power bills by almost $5 each month, or $60 a year.
Monthly savings on utility bills and income taxes mean Arizona workers keep more of their hard-earned money. As the father of nine children with a grocery bill that is bigger than my mortgage, I understand that every bit of savings matters. Reductions in tax and utility bills can be the difference in making ends meet. For Arizona’s families, these savings can put more food on the table, fund new lessons for growing kids or help pay for a much-needed family vacation. At a macro level, these tax cuts help to grow the economy.
But individuals aren’t the only ones who benefit from the changes to the tax code. Small businesses also gain financial flexibility from these types of savings. Paying less in utilities – on top of lower rates and higher deductions – frees up valuable revenue for business expansion and the job creation that drives our economy. For many companies, this may be enough to give raises, boost pay or even hire more staff.
Arizona is an outstanding state for small businesses. We are ranked eighth on the Small Business and Entrepreneurship Council’s list of most entrepreneur-friendly states. Arizona is friendly for small businesses and we want to keep it that way. The Republican tax reduction encourages job creators to ramp up investment on Main Street.
According to the Federal Reserve’s 2017 Small Business Survey, 33 percent of Arizona small businesses report being in the growth stage, compared to 29 percent nationally. Growing companies mean growing opportunities for our fellow citizens. These numbers are likely to rise as the wave of economic prosperity that has been unleashed continues to roll over the country.
Arizona is home to over half a million small businesses employing over 950,000 Arizonans. Creating jobs isn’t rocket science: Giving job creators the tax cut they need to expand will make it easier to increase hiring. Tax cuts work for Arizona’s economy, its businesses and its people.
– Justin Olson is a former state representative from Mesa and serves on the Arizona Corporation Commission.