By Terri Jo Neff |
On Monday, the CEO of Phoenix-based Ritoch-Powell and Associates warned of the impacts of the corporate tax increase and cuts to deductions currently included in the Biden Administration’s federal budget bill.
“These tax increases mean business owners will hire fewer workers – and pay them less for their labor,” Karl Obergh wrote in an op-ed published by the Arizona Republic. “Similarly, the bill contains a variety of other measures, including ones that will limit which interest expenses businesses can deduct from their taxable income.”
Obergh is principal and CEO at Ritoch-Powell and Associates, an award-winning civil engineering and surveying firm which specializes in transportation, public works, renewable energy, and private development projects. He noted that Arizona companies could pay a combined state and federal income tax rate of more than 30 percent under the Biden Administration’s proposed budget.
Only 4.69 percent of that goes to Arizona’s treasury.
But it is not only increased federal corporate tax rates which should have Arizonans concerned, Obergh wrote. He pointed out that increased utility costs triggered by other provisions of the federal budget bill would hit residents in the wallet as well.
And then there is the impact of tax changes proposed by the White House for companies that do business outside the United States.
According to Obergh, Arizona State University’s Seidman Research Institute recently collaborated with Ernst & Young to study the likely effect of some of the international tax changes included in Biden’s budget bill.
The study found that 266 firms based in Arizona with 100 or more employees would be impacted, putting up to 27,000 jobs at risk. Particularly vulnerable would be the state’s booming manufacturing industry which would be placed at an economic disadvantage in competing with companies outside the U.S. with far lower tax rates.
Obergh’s concerns are shared by the National Republican Senatorial Committee (NRSC) chaired by Sen. Rick Scott of Florida.
“Joe Biden, Mark Kelly, and Senate Democrats are pushing a radical economic agenda that includes 40 tax hikes on Arizona families and job creators to pay for a reckless spending spree that will send our nation on the path towards socialism,” according to a statement released by NRSC on Monday.