by AZ Free Enterprise Club | Jan 21, 2026 | Opinion
By the Arizona Free Enterprise Club |
At a time when Arizonans are still struggling to recover from years of Biden-era inflation, Republican lawmakers acted swiftly to deliver on their Affordable Arizona agenda. On just the fourth day of the legislative session, they passed SB1106, a tax conformity package that delivered the full benefits of the One Big Beautiful Bill (OBBB) to Arizona taxpayers, families, and businesses. The legislation provided $1.1 billion in tax relief and, just as importantly, immediate certainty for millions of Arizonans heading into tax season.
The very next day, Governor Katie Hobbs vetoed it.
That veto leaves taxpayers facing a potential $1.1 billion tax hike and widespread chaos as filing season begins. This isn’t simply the typical tax policy fight between Democrat and Republican ideologies. But a full display of Katie Hobbs’ failure to lead.
From the outset, she has mishandled this critical issue of federal tax conformity with conflicting messages, unauthorized executive actions, and zero coordination with the Legislature or even apparently her own agencies. The result has been a self-inflicted mess, and Arizona taxpayers will be the ones to suffer the price.
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by Ethan Faverino | Jul 8, 2025 | Economy, News
By Ethan Faverino |
President Donald Trump’s One Big Beautiful Bill, supported by all Arizona’s Republican representatives, was signed on Friday, July 4th. The bill provides the largest tax relief in American history.
Among the bill’s most impactful provisions are no tax on tips, no tax on overtime, and no tax on Social Security benefits.
These policies are designed to put more money back into the pockets of the hard-working American people.
The “No Tax on Tips” provision offers a new deduction of up to $25,000 for workers in tipped industries. Whether tips are received in cash, by charge, or through tip-sharing arrangements, employees will keep more of their hard-earned income.
This measure is expected to save tipped workers nearly $2,000 annually, providing direct financial relief to millions of Americans in these critical industries.
The bill also eliminates taxes on overtime pay. This guarantees that workers who put in extra hours are rewarded greatly with bigger paychecks. This, as well, could also save Americans on average $2,000 a year.
According to a new study from the Council of Economic Advisers, 88% (48 million) of American seniors receiving Social Security will pay no taxes on their Social Security income.
For a single senior receiving the average retirement of $24,000 annually, deductions will exceed their taxable Social Security income. Similarly, married seniors with a combined Social Security income of $48,000 will also see their deductions surpass taxable income.
The One Big Beautiful Bill also delivers an average 15% tax cut for Americans earning between $15,000 and $80,000, significantly boosting take-home pay.
For a typical family with two children, this translates to an increase of up to $10,900 per year in after-tax income. The bill also boosts the standard tax deduction, raising it to $23,625 for married couples and $15,750 for singles, a benefit utilized by 91% of taxpayers.
According to the Council of Economic Advisers, the One Big Beautiful Bill will drive significant growth and fiscal stability. This includes:
- Real wages increasing by up to $7,200 per year
- Real Investment growing by as much as 10%
- Creation of protection of 7 million jobs
- Deficit reduction of up to $11.1 trillion, driven by $5.2 trillion from economic growth, $2.8 trillion from tariff revenue, $1.6 trillion from discretionary spending cuts, and $1.5 trillion from interest savings.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Daniel Stefanski | Jan 26, 2025 | Economy, News
By Daniel Stefanski |
The State of Arizona is fast-tracking a tax reduction policy through the legislature that became a staple of President Donald J. Trump’s campaign platform over the past year.
This week, the Arizona House of Representatives Committee on Ways and Means passed HB 2081, which would exempt taxation on tipped wages from the state’s individual income tax.
State Representative Gail Griffin, a Republican who was the sponsor of this legislation, said, “I worked in the service industry years ago and understand the challenges tipped employees face. Tips are an expression of appreciation from customers for services provided. Tips are gifts and, in my opinion, should not be taxed. HB 2081 ensures that Arizonans who rely on tips to support themselves and their families can keep more of their hard-earned money. I’m grateful to Chairman Olson for making this the committee’s first bill for the session.”
Another Republican lawmaker, State Representative Neal Carter, added, “A key feature of a good taxation system is voluntary compliance and simplicity of administration. Tips are often paid in real time and in strange amounts. Taxing tips simply punishes the honest because strict compliance is difficult to achieve.”
As a candidate for President, Trump announced his plan for no federal taxes on tips back in June in the State of Nevada. Shortly after Trump’s announcement last summer, his Democrat opponent, then-Vice President Kamala Harris, mirrored his proposal in an attempt to woo voters on the campaign stump. On Inauguration Day this week, the newly minted Commander in Chief riffed that he thought his campaign may have secured the State of Nevada’s electoral votes in the November General Election because of that promise.
A poll from The Associated Press-NORC Center for Public Affairs Research earlier this month showed that 54% of respondents would strongly or somewhat favor eliminating taxes on earnings from tips.
The U.S. Bureau of Labor Statistics estimates that there are 2,277,900 waiters and waitresses across the country.
The bill passed the Arizona House committee along a party-line vote – 5-3, with one Democrat member absent.
According to the Arizona Legislature’s Request to Speak system, representatives from the Republican Liberty Caucus of Arizona, Arizona Licensed Beverage Association, and Fraternal Order of Police AZ State Lodge, signed in to support the bill. Representatives from Living United for Change in Arizona, the Arizona Center for Economic Progress, and Rural Arizona Action opposed the legislation.
HB 2081 will soon make its way to the floor of the Arizona House of Representatives for a vote from the full chamber.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
