In a new report from Common Sense Institute (CSI) Arizona, inflation as measured by the Consumer Price Index (CPI) in the Phoenix metro area, remained under the 2% target for the sixth consecutive month. In February, CSI Arizona recorded a year-over-year inflation rate of 1.8% for the metropolitan area. The national rate is currently +2.8% year-over-year, although it is down since President Donald Trump took office.
According to CSI Arizona, the largest driver of inflation has long been the cost of shelter, which was up +0.7% in February with annual shelter costs rising 1.2% year over year. In a post to X, CSI summarized the report stating, “Phoenix is outperforming most of the country when it comes to rising prices.”
Phoenix’s inflation rate has stayed below 2% for six straight months—offering relief for local households. Meanwhile, national inflation remains at 2.8%—showing that Phoenix is outperforming most of the country when it comes to rising prices.
— Common Sense Institute Arizona (@CSInstituteAZ) March 12, 2025
The report noted, “Among the 23 metro areas measured in the CPI each month, Phoenix ranks 22 in year-over-year inflation (2nd lowest). This is a dramatic change from 2022-2023, when the region consistently ranked among the highest.”
CSI Arizona goes on to observe in the report that the rate of national inflation has historically followed trends in the federal deficit with an approximate lag of 12-24 months and local or state levels are subject to regional dynamics as well, but tend to correspond with the national rate. In December, Fox 10 reported that homelessness in Arizona saw a 3.5% increase since 2023, with over 14,000 people experiencing homelessness.
Nathan Smith, CEO of Central Arizona Shelter Services told the outlet, “The cost of living continues to outstrip what people are making, and we’re seeing that we’re at a bit of an inflection point here in Arizona as we are facing the highest eviction rate that we’ve ever had.”
Arizona lawmakers are facing mounting backlash over a proposed pay raise bill that would increase the salaries of state legislators by a significant margin. Senate Concurrent Resolution 1003, introduced in the Arizona State Senate, seeks to boost the base pay for Arizona legislators, raising concerns about the timing of the proposal and the growing burden on taxpayers in an already financially strained state.
The bill, which passed initial stages in the legislature, aims to increase the base salary of lawmakers from $24,000 to $48,000, a 100% increase. Additionally, it proposes an increase in per diem payments and other benefits. The bill’s sponsors argue that this pay increase is necessary to attract qualified candidates to public office as well as keeping up with inflation.
The bill’s sponsor, Senator John Kavanaugh, says that he’s not worried about potential pushback from Arizona voters. “I do not think those voters wanted their $24,000 raise diluted by inflation to about $11,000,” Kavanaugh said. He said this calculation was based on the buying power that figure had in 1998—the last time Arizona lawmakers received a pay raise.
However, critics of the bill argue that such a significant pay raise for lawmakers comes at a time when many Arizonans are struggling to make ends meet due to rising costs of living and a housing crisis that has left many families in financial hardship. The proposal has raised questions about whether elected officials are out of touch with the economic realities faced by their constituents.
The timing of the bill has led some to question the motivation behind it. Critics argue that lawmakers, many of whom already have full-time jobs outside of their legislative duties, should not be seeking a pay raise while so many Arizonans are still struggling financially. Others believe the pay raise is necessary to ensure current lawmakers can make ends meet.
Democrat Senator Eva Burch recently announced her resignation from the legislature, citing that she’s struggling to make ends meet and to find balance with her legislative work and her job as a healthcare provider. “I know that I am not the first, nor will be the last, good person to find themselves a casualty of legislative pay,” said Burch.
As SCR 1003 makes its way through the Arizona Legislature, the controversy surrounding the proposed pay raise for state lawmakers is unlikely to subside anytime soon. With many Arizonans still feeling the financial pressure from rising living costs, the bill has become a flashpoint in the ongoing debate over government priorities and fiscal responsibility.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
Donald Trump’s renewed pledge to “Make America Great Again” requires nothing less than reigniting economic growth and prosperity. Wealth creation is essential. Yet as Congress prepares to extend and expand upon Trump’s landmark Tax Cuts and Jobs Act of 2017, he can take matters into his own hands by issuing an executive order to index capital gains for inflation.
Taxing inflationary “phantom” capital gains is an unfair and ill-advised policy that punishes risk and success.
Consider this: You invest $1,000, and after four years of Joe Biden in the White House, you sell that investment for $1,100. But since inflation raged during Biden’s tenure, the $1,100 you receive will be worth less in real terms than the $1,000 you invested. And yet, under current law, you will pay a tax on your $100 capital “gain.”
Talk about perverse!
“As has been well documented,” writes Alan Auerbach, University of California economist, “realized capital gains may be subject to tax rates that easily exceed 100% of real gains in the presence of inflation.”
But it’s the law. And not only would eliminating it be the fair thing to do for investors, it would ignite a surge of American prosperity.
Eight years ago, the late Treasury economist Gary Robbins estimated that indexing capital gains for inflation would, by 2025, create an additional 400,000 jobs, grow the U.S. capital stock by $1.1 trillion and boost GDP by roughly $500 billion. Because capital gains were never indexed, average household income today is $3,600 lower than it could have been otherwise.
However, it’s never too late to start doing the right thing.
Congress has repeatedly toyed with indexing capital gains. In fact, indexing capital gains used to be a bipartisan issue. In the early 1990s, congressional Democrats touted indexing as an effective way to boost economic growth and benefit workers.
“If we really want to increase growth,” said a youthful Chuck Schumer, the then-future Senate minority leader, “there are proposals that we can do. I would be for indexing all capital gains, savings and borrowings.”
Having mastered the ways of the D.C. swamp, Schumer now opposes indexing capital gains. Listen to Congressman Schumer, not Senator Swamp.
Indeed, as Trump emphasized in 2019, “Indexing is something that a lot of people have liked for a long time. It’s something that would be very easy to do. It’s something that I am certainly thinking about.”
Looking forward, the Congressional Budget Office estimated last month that federal capital gains tax receipts will total $2.8 trillion over the decade ahead. If only one-fourth of those tax receipts—a conservative estimate—are due to taxing phantom gains, American taxpayers will pay $700 billion in taxes on income that doesn’t exist.
Opponents of capital gains indexation say the subsequent revenue loss would be too great. But inasmuch as inflationary gains should not have been taxed in the first place, a revenue loss is a good thing. It represents the correction of a tax injustice.
The second-order effects that Robbins documents should remove any reservations based on revenue loss. Without the federal tax on inflationary gains, asset prices will adjust until they reach a new, higher equilibrium. Investors will see their portfolios appreciate bigly.
It’s a safe bet that millions of American investors and pensioners would choose a Dow Jones average of 50,000 with indexation over a Dow Jones average of 44,500 without indexation.
As taxpayers realize real capital gains, the federal government will collect billions of dollars in new tax revenue. Federal tax revenue may ultimately be higher with indexation, not lower.
There is the question of whether Trump has the legal authority to issue an executive order instructing the Treasury secretary to issue new regulations indexing the capital gains cost basis for inflation. It comes down to whether the governing Internal Revenue Code section covering the definition of the word “cost” is sufficiently ambiguous to allow regulatory reinterpretation. Congress never specifically mandated that “cost” was to be determined in nominal terms, nor did it prohibit the use of real valuation.
According to a watershed 2012 paper by Charles Cooper and Vincent Colatriano in the Harvard Journal of Law & Public Policy, “jurisprudential developments over the last two decades have confirmed . . . that Treasury has regulatory authority to index capital gains for inflation.” With that justification, Trump has little reason to hold back.
James Carter is a contributor to The Daily Caller News Foundation and a principal with Navigators Global. He previously headed President Donald Trump’s tax team during the 2016-17 transition and served as a deputy assistant secretary of the Treasury for then-President George W. Bush.
Congressman David Schweikert revealed the truth about job numbers after an update was released by the Bureau of Labor Statistics which claimed the economy under outgoing President Joe Biden added 256,000 jobs in the month of December.
“As we transition to a new administration, the December jobs report provides an essential opportunity to assess the economic policies of the Biden administration and the challenges facing hardworking Americans,” stated Schweikert, Vice Chairman of the Joint Economic Committee.
“While the December data demonstrates strong employment growth, having increased 2.2 million in 2024, the report underscores persistent issues that demand immediate attention,” added Schweikert.
“Under the Biden administration, American families have faced unprecedented economic headwinds, including inflation rates that outpaced wage growth for much of the last four years. Policies prioritizing excessive spending and burdensome regulations have strained small businesses, stifled innovation, and eroded purchasing power. While there have been temporary gains in certain heavily subsidized sectors, the broader economic foundation remains unstable,” concluded an exasperated Schweikert.
In a post to X, the Joint Economic Committee Republicans summarized, “In December, employment rose by 256K, averaging a monthly gain of 186K in 2024. While these gains are notable, challenges remain: an unemployment rate above 4% for the past 8 months and a historically low labor force participation rate.”
In December, employment rose by 256K, averaging a monthly gain of 186K in 2024.
While these gains are notable, challenges remain: an unemployment rate above 4% for the past 8 months and a historically low labor force participation rate.
— Joint Economic Committee Republicans (@JECRepublicans) January 10, 2025
In his remarks Friday, Schweikert added, “It’s imperative that we prioritize policies which foster economic growth, encourage innovation, empower domestic businesses, and restore confidence in our markets.”
He added, “Reducing government overreach, prioritizing fiscal responsibility, and enacting tax reform that incentivize investment while rewarding hard work are the most crucial facets of restoring American prosperity.”
“I am committed to working with my colleagues to enact solutions that address these economic challenges and create a thriving future for all Americans. Together, we can ensure that 2025 is the beginning of a stronger, more resilient future for all Americans.”
Payroll employment rose by 2.2 million in 2024 (an average monthly gain of 186,000), with some industries growing more than others. pic.twitter.com/dzesehbhMG
— Joint Economic Committee Republicans (@JECRepublicans) January 10, 2025
The update from the Bureau of Labor Statistics (BLS) is infamously subject to revision as well. This proved to be a factor that badly hurt the Biden administration and the Kamala Harris campaign in August 2024 when the BLS estimate of new jobs created between March of 2023 and March of 2024 was revised down by almost 818,000 or about 30%. The release was allegedly intended after November 5th but was leaked according to President-elect Donald Trump.
Rep. Jodey Arrington, Chairman of the House Budget Committee, observed at the time, “Based on more comprehensive data released from state unemployment tax records, the Biden Bureau of Labor Statistics acknowledges they were way off on the number of new jobs created between March of 2023 and March of 2024 by almost one million or 30%, which is five times their average margin of error. The economy is the top issue in this presidential race and the recent downwardly revised job numbers taken together with persistently high prices and interest rates bellies a much weaker Biden-Harris economy than we were led to believe.”
Accusations that the Biden White House deliberately inflated the jobs numbers abounded with President-elect Donald Trump addressing the revision directly calling it a “total lie,” and “a scandal.”
President Trump addresses report that Biden-Harris Labor Department inflated jobs numbers by 818,000 during speech in Asheboro, NC pic.twitter.com/mNyq6JJ3XL
Trump told supporters in Asheboro, NC, at the time, “The Harris-Biden Administration has been caught fraudulently manipulating job statistics to hid the true extent of the economic ruin that they’ve inflicted on America.”
Schweikert’s office provided a few highlights of the BLS report, noting that the outgoing legacy of the Biden administration will be marked by:
“Real wages failing to keep pace with inflation, leaving many families burdened with record-high levels of credit card debt and preventing the ability to grow savings.
A labor force participation rate that has struggled to recover to pre-pandemic levels, leaving millions of Americans sidelined from economic opportunities.
The failure to address workforce development, with an uneven rate of job openings compared to worker skills, leaving both manufacturing and construction industries with critical labor shortages.”
Shortly before his death in 2006, I had the privilege of interviewing Milton Friedman over dinner in San Francisco. The last question I asked him was: What are the three things we had to do to make America more prosperous?
His answer I have never forgotten: “First, allow universal school choice; second, expand free trade; third and most importantly, cut government spending.” That was long before Presidents Barack Obama and Joe Biden came along.
There are not too many problems in America that cannot be traced back to the growth of big and incompetent government.
It is notable that the two big bursts of inflation during modern times both occurred when government spending exploded. The first was the gigantic expansion of the LBJ “war on poverty” welfare state in the 1970s with prices nearly doubling, and then the post-COVID era spending blitz in the last year of Trump and then the Biden $6 trillion spending spree with the CPI sprinting from 1.5% to 9.1%.
Coincidence? Maybe. But I doubt it.
The connection between government flab and the decline in the purchasing power of the dollar is obvious. In both cases the Washington spending blitz was funded by Federal Reserve money printing. The helicopter money caused prices to surge. (I still find it laughable that 11 Nobel prize-winning economists wrote in the New York Times in 2021: Don’t worry, the Biden multi-trillion-dollar spending spree won’t cause inflation.)
The avalanche of federal spending hasn’t stopped even though COVID ended more than three years ago. We are three months into the 2025 fiscal year and on pace to spend an all-time high $7 trillion and borrow $2 trillion. If we stay on this course, the federal budget could reach $10 trillion over the next decade.
This road to financial perdition cannot stand. It risks blowing up the Trump presidency.
Upon entering office, Trump should on day one call for a package of up to $500 billion of rescissions — money that the last Congress appropriated but has not been spent yet. Cancelling the green energy subsidies alone could save nearly $100 billion. Why are we still spending money on COVID?
We could save tens of billions by ending corporate welfare programs — such as the wheel barrels full of tax dollars thrown at companies like Intel in the CHIPS Act. The Elon Musk Department of Government Efficiency is already identifying low hanging fruit that needs to be cut from the tree.
Along with extending the Trump tax cut of 2017, this erasure of bloated federal spending is critical for economic revival and for reversing the income losses to the middle class under Biden.
This is especially urgent because the curse of inflation is NOT over. Since the Fed started cutting interest rates in October, commodity prices are up nearly 5% and the mortgage rates have again hit 7% — in part because the combination of cheap money and government expansion is a toxic economic brew — as history teaches us.
Nothing could suck the oxygen and excitement out of the new Trump presidency more than a resumption of inflation at the grocery store and the gas pump. Trump’s record-high approval rating will sink overnight if the cost of everything starts rising again.
Cutting spending won’t be easy. The resistance won’t just come from Bernie Sanders Democrats. Trump will have to convince lawmakers in his own party — many of whom are already defending green-new-deal pork projects in their districts.
This is why Trump should make the case in his inaugural address that downsizing government is the moral equivalent of war. Borrow a line from Nancy Reagan: just say no — to runaway government spending. Say yes to what Friedman titled his famous book: “Capitalism and Freedom.”
Stephen Moore is a contributor to The Daily Caller News Foundation and a visiting fellow at the Heritage Foundation. His new book, coauthored with Arthur Laffer, is “The Trump Economic Miracle.”
