The Grand Canyon Institute released a report on the impact of the state’s 2.5% flat tax, since it was enacted by former Gov. Doug Ducey and implemented in 2023.
The report shows notably negative effects on education funding, including lost financial aid, larger classes and most recently a tuition surcharge for Arizona State University students. Research director Dave Wells says the flat tax is also what led to major state budget cuts.
“It’s a $2 billion cut that mostly went all to wealthy people. We estimate about 70% of it went to people whose income exceeds $200,000,” Wells said.
Wells also says the report shows that with the flat tax in place, Arizona schools and universities will not be funded properly.