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Katie Hobbs Tried to Increase Arizona’s Tax Agency, Like Biden Just Did

October 9, 2022

By Corinne Murdock |

During her last year in the State Senate in 2018, Democratic gubernatorial candidate Katie Hobbs backed a bill to add 131 new tax auditors, managers, and staff to the Arizona Department of Revenue (ADOR) using $8.3 million in state funds. At the time, Hobbs was the State Senate’s minority leader.

Throughout her gubernatorial campaign, Hobbs said she would lighten the tax process burden for the working class if elected. Hobbs also pledged to cut income taxes for 800,000 families if elected governor. 

Additionally, Hobbs promised that working-class Arizonans wouldn’t pay “a center higher” for her economic plan, nor would they face unnecessary tax burdens.

Hobbs’ proposed plan to increase ADOR was similar to the Biden administration’s recent accomplishment: expanding the IRS. In August, Congress voted to increase the size of the IRS by about 87,000 agents through the Inflation Reduction Act (IRA), a repackaged version of President Joe Biden’s Build Back Better (BBB) Act. Republicans decried the provision as a weaponization of the IRS that would cause disproportionate harm to the working class. Democrats dismissed those concerns, insisting that the IRS would only target the wealthy not paying their fair share of taxes, and that the IRA would mitigate inflation.

Last year, over 50 percent of all IRS audits targeted taxpayers making under $75,000 a year, which applies to about 171.6 million Americans (52 percent). About 25 percent of IRS audits applied to taxpayers making between $75,000 to $200,000, which applies to about 118.8 million Americans (36 percent).

In all, 75 percent of audits may apply to the 290.4 million Americans that comprise 88 percent of the population (about 330 million).

The bill that Hobbs cosponsored in 2018, SB1324, proposed the addition of two corporate income tax audit managers, 28 corporate income tax auditors, two transaction privilege tax managers, 28 transaction privilege tax auditors, two transaction privilege tax license compliance staff managers, 18 transaction privilege tax license compliance staff members, 40 tax collectors, and 11 support staff members.

The bill died quietly, having never received a vote in any committee. Its House companion, HB2137, experienced the same fate. 

At the time, Governor Doug Ducey expressed a desire to expand ADOR — but by 25 tax collector positions that had been eliminated several years prior, about 80 percent less than what HB2137/SB1324 proposed. Ducey was looking for ways to make up about $83 million in lost audit revenue. 

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.

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