Donald Trump has promised to create millions of new high-paying jobs.
One easy first step to doing that is to repeal Biden-regulations on America’s 4 million business partnerships (sometimes known as S-corporations) that are prolific job creators. The latest estimates find 10 million Americans employed by these business partnerships, with $800 billion paid in worker salaries and benefits.
For example, “95 percent of Microsoft’s commercial revenue flows directly through” its “partner ecosystem.” The profits from these enterprises are passed through to the 4 million partners, who make tax payments based on their share of those earnings.
These have been the tax rules governing partnerships for many decades. The Biden administration didn’t like the tax rules, so instead of asking Congress to change them, Biden’s Treasury Department worked through the back door to unilaterally modify the rules, as part of its “fairness” agenda.
The precise tax target is a technique used by partnerships to lower their tax liability called “basis shifting.” While technically complex (because everything with the U.S. tax code is complicated), it is also entirely legal and has been used by partnerships for decades to adjust the value of their assets during a transaction or transfer. Whatever one thinks of basis shifting, the Internal Revenue Service (IRS) doesn’t have the unilateral authority to change the tax laws — only Congress does.
The Biden crackdown treated business partners as tax cheats. When they hired 87,000 agents to harass companies and individuals, nearly 4,000 of these IRS tax collectors were hired to among other things, “expand enforcement focusing on complex partnerships.”
The more than four million business partnerships became an overnight suspect class, as did the tax returns of millions of partners.
To pry money out of these partnerships, the Biden team wanted to create a retroactive tax (which should be illegal) by changing the rules and apply them going back six years in time. So a tax structure that may have been perfectly legal in the past could now trigger investigations, fines, and litigation.
Biden Treasury Secretary Janet Yellen also created a new investigative office to oversee and harass partnerships. That should be shutdown.
So a tax structure that may have been perfectly legal in the past could now trigger investigations, fines, and litigation.
More than 90% of partnerships are small businesses, according to an Ernst and Young study prepared for the Small Business & Entrepreneurship Council (SBE Council) last year. The business partnership arrangement allows these firms to have ready access to needed capital to expand their operations. In all these companies generated $1.3 trillion to our GDP.
These partnership arrangements allow promising small companies to grow into large ones. This uniquely American business structure is a hallmark of U.S. entrepreneurial success — a path for businesses to go from good to great.
It isn’t broken. The system works. That’s why the Trump Treasury Department needs to immediately command the IRS to cease and desist the Biden witch hunt against these partnerships.
It’s a war on wealth. A war on U.S. businesses. And it’s a direct assault on the Trump promise to “make America great again.”
Stephen Moore is a contributor to The Daily Caller News Foundation, a senior fellow at the Heritage Foundation, and a co-founder of Unleash Prosperity. His latest book co-authored with Arthur Laffer is “The Trump Economic Miracle.”
Arizona’s Republican lawmakers are looking to take on the cost of groceries by sending a referendum to the voters that would cap the transaction privilege taxes in municipalities on the sale of food items for home consumption at 2 percent.
The effort has been led by Republican State Representative Leo Biasiucci. It initially began as an outright ban, which proved to be a non-starter with State House Democrats and Governor Katie Hobbs. A bill to accomplish this was already dead on the table with the prospect of a veto from Hobbs, but this has been sidestepped through a compromise, HCR 2021.
“These are things that families need to survive,” Biasiucci told AZ Capitol Times. “This is the right thing to do. The fact that we are taxing people on eggs and milk and bread is insane.”
In a post to X Biasiucci wrote, “My bill to remove taxes from all essential food items like milk, eggs, butter, vegetables, fruit, baby food, beef and chicken passed committee 4-2. My bill also removes taxes from diapers. Taxing our food is regressive and it needs to end.”
My bill to remove taxes from all essential food items like milk, eggs, butter, vegetables, fruit, baby food, beef and chicken passed committee 4-2. My bill also removes taxes from diapers.
A previous version of the measure passed both chambers of the legislature in 2023 only to suffer a prompt veto from Hobbs after the leaders of several municipalities claimed city services, including police and fire departments, would need to be reduced without tax revenue from food sales. In her veto letter, Hobbs claimed, “It’s clear that this bill doesn’t actually eliminate costs for our residents. It simply moves those costs around.”
Rep. Neal Carter, a Republican from San Tan Valley told the Times that there have been significant increases in municipal sales tax revenue from online sales after the SCOTUS ruling in South Dakota v. Wayfair. The outlet reported that from 2019-2024, cities and towns have enjoyed a 60% increase in sales tax revenue, but city expenses have also increased in that time period as well, leaving the local governments reticent to cut spending.
“This is a terribly regressive tax. This is the most regressive tax I could possibly dream up,” Carter told the outlet. “If I was going to dream up a regressive tax, I would tax the one thing that you literally have to have to live. You don’t even, in a sense, have to have a home to live, but you have to have food.”
“I don’t know a single person in Arizona, a voter or a constituent, who’s going to say, ‘Yes, continue to tax me on these things that I have to put on the table for my family,’” Biasiucci told his colleagues. “At a time when inflation is through the roof, these taxes are going higher. You’re paying more.”
Under the compromise passed in the House, a city or town with a tax rate below 2% could elect to increase it up to the limit with voter approval. However, with approximately 70 of the 91 municipalities charging taxes on groceries ranging from 1.5% to 4%, some municipalities would be required to reduce their taxes and either reduce spending or increase taxes in other areas such as property tax.
After passing the House with limited Democrat votes and near total Republican support, the resolution was read in the Senate on March 10th and 11th and is pending review by both caucuses and a final vote.
Arizona’s ongoing housing crisis is taking center stage as state lawmakers, led by House Majority Leader Michael Carbone, voice strong opposition to Governor Katie Hobbs’ water policies, accusing them of exacerbating the state’s housing shortage. In a statement released last week, Carbone applauded House Speaker Steve Montenegro for authorizing a lawsuit against the Arizona Department of Water Resources (ADWR) over its adoption of a controversial 33.3% groundwater tax. Carbone claims that this policy is driving up the cost of housing and ultimately harming Arizonans who are already grappling with soaring housing prices.
At the center of the dispute is a policy known as the housing moratorium, which has been criticized for preventing the development of large swathes of land that could otherwise be used to build affordable homes. According to Carbone and other critics, the moratorium was adopted illegally, and it has led to a situation where hundreds of thousands of acres of land remain undeveloped. This, in turn, limits the amount of available space for new homes, driving demand to already crowded urban areas and increasing housing costs.
Carbone explained that “water policy is land use policy, and land use policy is housing policy,” suggesting that the restrictions on land development, while related to water conservation, are having broader economic consequences.
As a result of the moratorium, many Arizonans are facing higher costs when it comes to purchasing new homes. The housing moratorium is expected to increase home prices by $19,600 to $23,700 per house. Additionally, the proposed 33.3% groundwater tax has been predicted to add an extra $5,100 to $7,900 to the cost of new homes. These measures have raised concerns about the affordability of housing, especially in a state already struggling with rapid population growth and a housing shortage.
The Arizona House of Representatives, alongside the Home Builders Association of Central Arizona (HBACA) and members of the Arizona Senate, have joined forces in a legal battle against the ADWR’s actions. The lawsuit seeks to halt the 33.3% groundwater tax, which lawmakers argue is not only illegal but also harmful to Arizona’s housing market. Carbone criticized the governor’s policies, stating that they are not about ensuring water security but rather a means of “government control.”
“The Governor wants to dictate where and how Arizona families live, limiting all future growth to cities and driving up home prices,” Carbone said. “Affordable housing is central to the American Dream, and we are committed to fighting these illegal policies that will only make the housing crisis worse.”
The legal battle focuses on the ADWR’s authority to implement such a tax and whether it complies with state law. Proponents of the lawsuit argue that homebuilders have long demonstrated a commitment to responsible water management, having replenished 100% of the groundwater they use annually since 1995. Therefore, they contend, penalizing the homebuilding industry with additional taxes is unfair and counterproductive.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
Congressman Abraham Hamadeh (R-AZ8) has joined Arizona Reps. Andy Biggs (R-AZ5) and Paul Gosar (R-AZ9) in co-sponsoring the Senior Citizens Tax Elimination Act, H.R. 1040, which was introduced earlier this month by Rep. Thomas Massie (R-KY). If enacted, the bill would eliminate the current regime of de facto double taxation on Social Security benefits.
In a press release, Hamadeh explained his support for the bill saying, “Amid all of the FAKE news about Social Security benefits and the Democrats’ fear-mongering weaponization of it, I am glad to bring some REAL news to the residents of Arizona’s 8th Congressional District. Help is on the way.”
Amid all of the FAKE news about Social Security benefits & the Democrats' fear-mongering weaponization of it, Congressman Hamadeh is glad to bring some REAL news to the residents of Arizona's 8th Congressional District.
— Office of Congressman Abe Hamadeh (@RepAbeHamadeh) February 21, 2025
He added, “’Prior to 1984, Social Security benefits were exempt from the federal income tax. Congress then enacted legislation to tax a portion of those benefits, with the share gradually increasing as a person’s income rose above a specified income threshold,’ noted a Congressional Research Service report. That is simply unfair, and unnecessary.”
Massie laid out the bill’s impact in his own release saying, “Although seniors have already paid tax on their Social Security contributions via the payroll tax, they are still required to list these benefits as taxable income on their tax returns. This is simply a way for Congress to obtain more revenue for the federal government at the expense of seniors who have already paid into Social Security. My bill would exempt Social Security retirement benefits from taxation and boost the retirement income of millions of older Americans.”
As Hamadeh’s office notes, Senators Tommy Tuberville (R-AL) and Tim Sheehy (R-MT) have already introduced corresponding legislation in the U.S. Senate with Tuberville recently telling Newsmax, “In a day and age where the cost of living has skyrocketed, our seniors should not experience a second tax on their Social Security when they’ve already paid income tax on their paychecks.”
The Senior Citizens Tax Elimination Act was first introduced by former Congressman Ron Paul and has been subsequently introduced by Massie every year since he took office in 2012.
Hamadeh called back to the introduction of the bill by Paul in a statement, “It is my honor – one of the highest honors – to support a bill first introduced by Congressman Ron Paul. The wisdom of the fiscal battles he waged over the years is now becoming evident to everyone thanks to President Donald Trump and his Department of Government Efficiency (DOGE). My hope is that as DOGE dives deeper into our bloated and broken bureaucracies, we will find many opportunities to reduce taxes on hard-working Americans.”
“In fact, my colleagues and I are committed to delivering a ‘big, beautiful bill’ that will deliver tax relief to all taxpaying Americans,” said Congressman Hamadeh. “The Senior Citizens Tax Elimination Act delivers immediate relief to those who need it most — our seniors who built this country.”
The Town of Gilbert is the target of a lawsuit by the Goldwater Institute on behalf of the Home Builders Association of Central Arizona and a local property owner, Jonathan Barth, for allegedly violating the Arizona Constitution which bans tax increases on “services.”
According to Goldwater, the tax increase imposed by the Town of Gilbert includes “many types of business that do not produce tangible goods, such as advertising, photography, utilities, hotel/lodging, and construction.”
Goldwater is challenging two of the tax increases in particular: on homebuilding and short-term rental properties.
Lawsuit Alert: The Goldwater Institute challenges Gilbert’s illegal pickleball tax.
Gilbert officials are hiking taxes to fund pickleball courts, splash pads, and even a ropes course—all in violation of the Arizona Constitution. Here’s what you need to know: 🧵
As noted in the text of the lawsuit, the Arizona Constitution prohibits “any county, city, town, municipal corporation, or other political subdivision of the state, or any district created by law” from creating any new or increasing any existing transaction-based taxes on the “privilege to engage in, or the gross receipts of sales or gross income derived from, any service performed in this state.”
The new tax ordinance in question, per the Town of Gilbert’s website, imposes a 0.5% increase in the existing sales tax and creates a “use tax” to be “paid for by residents and businesses when purchases are made online with out-of-state vendors who do less than $100K of sales in Arizona per year.”
The lawsuit explains that, “As a result of the Ordinance, individuals, businesses, and taxpayers, including Plaintiff Jonathan Barth, who engage in the rental or lease of real property, including for transient lodging, will pay a higher tax rate for the services they perform. Additionally, individuals, businesses, and taxpayers that engage in general contracting services, including the members of Plaintiff Home Builders Association of Central Arizona (“HBACA”), will pay a higher tax rate on the services they perform.”
Barth, an educator and father of five, will be impacted because he earns supplemental income by managing his detached bungalow as a rental for short-term tenants. He told Goldwater, “This tax hike makes it all the more difficult to make ends meet in Gilbert.”
Former Mayor Brigette Peterson and all of the members of the Town Council are named as defendants in addition to the town itself.
The town allegedly intends to use the projected $55 million yield of this new tax for “Critical Infrastructure Projects,” adding that “Time is of the essence as many of Gilbert’s services are over capacity and new infrastructure is needed.”
The Goldwater Institute has found however, that these “Critical Infrastructure Projects,” include pickleball courts, splash pads, a ropes course, and a “statement” bridge.
The Home Builders Association of Central Arizona (HBACA) told Goldwater that the new taxes will result in increased construction costs in the town as well. HBACA CEO Jackson Moll warned, “Gilbert officials are trampling on their own constituents’ rights with no regard for the consequences their illegal actions will have on taxpayers and homebuyers. The Arizona Constitution is clear: increasing taxes on services, including on construction contracting, is unlawful.”
As previously reported by AZ Free News, the Goldwater Institute pursued a similar action against the Town of Payson in September when the Town Council decided to incur a $70 million debt via a bond measure without a public referendum.
