State Senate President-elect Warren Petersen (R-Gilbert) announced Tuesday his plan for helping Arizonans struggling with raising prices catch a break.
“Government has done extremely well over the last few years by adding a record amount of revenue. Unfortunately, hardworking taxpayers are reeling during this period of runaway inflation and are having a tough time paying for the most basic necessities,” said Petersen.
— AZSenateRepublicans (@AZSenateGOP) December 6, 2022
The Arizona Sun Times reached out to Governor-elect Katie Hobbs (D) for a reaction to this plan but did not hear back before publishing.
Petersen’s plan includes four actions: eliminating the rental and food taxes, increasing the housing supply, and reducing or eliminating occupational license fees. He explained that because the state of Arizona has a surplus of money and the government still makes money from income tax, it can afford to lay off in some areas, especially taxes on living necessities such as rent and food. He said that eliminating these taxes would put money back in the pockets of Arizonans and help poorer citizens.
Moreover, he explained his plan to increase the housing supply would be to remove hurdles and red tape that make it difficult for houses to be built quickly. He said that through administrative approval of all existing projects, the housing supply in Arizona can receive a buff. As for occupational licenses, he stated the goal would be to put money back into the pockets of Arizonans working hard for a living.
Yet, the Tax Policy Center warned in April that eliminating taxes may not have the desired effect of reducing inflation. The outlet shared that demand and spending could increase by removing taxes on certain items and putting more money in people’s pockets, further widening the gap between supply and demand. Doing so could lead to further increased prices down the road, which would evaporate the money people saved from not paying taxes.
However, Petersen told The Sun Times via the phone that he is confident his plan will not come with this side effect. He explained that inflation happens when the government prints and spends money, artificially shoving it into the economy, like the stimulus checks sent out by the federal government. Petersen said that the difference here is that by removing taxes, the money people now have was already in circulation and would not be adding anything that was not there before.
“So, no, [eliminating taxes] doesn’t cause inflation. It’s just a more efficient use of money,” Petersen said. “It helps people deal with inflation, and it helps curb the pain people are feeling from inflation.”
Ultimately, Petersen said this list of actions should not be difficult to achieve and that he looks forward to working with his fellow Senate leaders to do whatever is needed to alleviate the effects of inflation.
As reported by The Sun Times, Republican gubernatorial nominee Kari Lake had some of the same ideas as Petersen. While still on the campaign trail, Lake shared that her plans for economic relief in Arizona included removing the tax on rent and food. She gave a similar justification to Petersen, saying the goal was to put money back in the pockets of Arizonans.
The Sun Times reached out to Lake for a reaction to Petersen’s plan but did not hear back.
– – –
Neil Jones is a reporter for The Arizona Sun Times and The Star News Network. Follow Neil on Twitter. Email tips to [email protected].
Background Photo “Arizona Capitol” by Gage Skidmore. CC BY-SA 2.0.