Richest 13 Arizonans’ Wealth Now Tops $42 Billion; Debt Caused by Trump Tax Cuts Used By GOP As Excuse to Cut Services
Even as politicians in Washington claim we can’t afford Social Security for Arizona’s working families, the collective fortune of Arizona’s 13 billionaires topped $42 billion as of February 1. That’s a near record high and up an astounding $25 billion (nearly 150%) since a tax law enacted by Donald Trump and a Republican Congress came into effect in 2018. The law was so heavily slanted towards the rich–both in the Grand Canyon State and nationwide–that it undoubtedly contributed to billionaires’ eye-popping wealth growth over the past six years. And under current rules, none of those wealth gains may ever be taxed.
“It’s outrageous to threaten this bedrock of working- and middle-class economic security with cuts when billionaires and other ultra-wealthy people in Arizona and nationwide are growing ever richer thanks in large part to tax cuts and tax loopholes that can leave wealth gains entirely untaxed,” said Andrea Moreno, executive director of Honest Arizona.
“The staggering runup of billionaire wealth since the passage of the Trump-GOP tax law is a sure indicator of who that law was meant to serve–and who it would go on serving if Republicans succeed in their plan to make its expiring provisions permanent,” said David Kass, executive director of Americans for Tax Fairness, “Instead of extending tax breaks for billionaires, Congress should be working to better tax them through President Biden’s Billionaire Minimum Income Tax and other reforms in how we tax the super-wealthy. We can then use the revenue raised to strengthen and improve Social Security, among other key public services.”
The growth in federal debt this century can mostly be attributed to the Trump tax cuts and an earlier round enacted by Republican President George W. Bush and another GOP Congress. Yet Republicans use that rising debt as an excuse to try to cut public services working families rely on, including Social Security. The GOP-led House Ways and Means Committee this year voted to establish a “debt commission” that will look to lower deficits exclusively by cutting services vital to working families, not raising more revenue from the wealthy.
In fact, Republicans want to cut taxes further for the rich. Parts of the Trump-GOP tax law have already expired, or are scheduled to expire at the end of 2025, but the GOP wants to make the whole package permanent at an estimated cost of $3.8 trillion—billions of which will undoubtedly flow into billionaires’ already bursting bank accounts.
The boom times for Arizona billionaires were mirrored nationwide. America’s roughly 750 billionaires were worth a total of $5.3 trillion as of February, a new record high and up $2.4 trillion since the Republican tax law was enacted. Billionaire wealth growth was calculated by Americans for Tax Fairness (ATF) based on data collected from Forbes. It’s the latest report from ATF in a series tracking billionaires’ rising riches that began during the pandemic.
Promoted as a boon to ordinary Americans, the Trump-GOP tax law has failed working families while moving even more money to the pockets of the ultra-wealthy. This contrast is nowhere more visible than in the explosion of billionaire wealth compared to the assets of working Americans: the nation’s handful of billionaires now hold one-and-a-half times more wealth than the entire bottom half of society, or around 165 million people.
Topping the list of Arizona billionaires is used-car king Ernest Garcia II, who was not yet a billionaire when the Republican tax law was enacted in 2017 but is now worth an estimated $6.7 billion. (His son is worth another $1.1 billion.) In 1990 the elder Garcia pleaded guilty to bank fraud.
Source: Americans for Tax Fairness
Under current law, almost none of that wealth gain–billionaires’ biggest form of income–will likely ever be taxed. Investment gains are only taxed when the underlying asset is sold, but billionaires and other hyper-wealthy people don’t need to sell in order to benefit: they can obtain low-interest loans secured against their rising fortunes and live luxuriously tax-free. And when the gains are handed down to the next generation, they completely disappear for tax purposes.
A prior ATF analysis of leaked billionaire tax returns data found that they paid an effective federal income tax rate of just 4.8% over six years. Yet despite the evidence that billionaires and other wealthy elites are not paying their fair share, Republicans are working hard to cut their taxes even more.
The renewed push for more tax giveaways to the nation’s wealthiest households coincides with worsening economic conditions for working families and reductions in healthcare coverage and cuts to basic programs they depend on every day.
In state after state, for instance, thousands of Medicaid enrollees are losing coverage because of new administrative requirements or narrowed eligibility. Nationally, over 5.5 million people have lost Medicaid coverage since the end of the Public Health Emergency (PHE). In Arizona, up to 289,000 people have lost Medicaid for procedural or administrative reasons so far. The Kaiser Family Foundation estimates that as many as 24 million people across the country could lose coverage during this 12 month “unwinding period.”
Raising taxes on billionaires and the corporations they control is incredibly popular. An August 2023 survey conducted by Navigator/Impact Research in 61 battleground congressional districts, including two districts in Arizona, found that 73% of likely voters are in favor of raising taxes on billionaires and big corporations, and 76% are in favor of closing tax loopholes for billionaires and big corporations.
Corporate tax breaks Republicans passed through the House tax-writing committee this past summer–the first step in their effort to make expiring provisions of the Trump law permanent–would give the richest 1% of households and foreign investors 71% of the money in the first year, while offering middle-income families a paltry $50 on average.
Worse than the Republicans’ desire to give their political donors huge tax cuts is that they want hard-working Americans to pay for them through reduced public services. The spending plan House Republicans put forth as the price of averting a government shutdown this past spring would:
- Slash funding by 80% for schools serving low-income kids, which would impact 26 million students, including 256,400 in Arizona; and eliminate up to 226,000 educator jobs, including 4,200 in Arizona;
- Kick 82,000 kids out of preschool, including 940 children in Arizona;
- Raise housing costs by eliminating Housing Choice Vouchers for 20,000 families, including approximately 6,000 seniors citizens and 100 families in Arizona; and cut the HOME Investment Partnerships Program, meaning 20,000 fewer affordable homes would be built;
- Cut $4 billion from Workforce Development programs, which would deny 11,500 Arizonans job training;
- Undermine critical health research and increase the likelihood of future pandemics by cutting $3.8 billion from the National Institutes of Health;
- Increase the risks of lead exposure for 78,000 children by rescinding over $564 million in funding for lead-paint removal;
- Increase energy costs for rural Americans by slashing $2 billion of funding for agricultural producers and rural small businesses that convert to renewable energy systems.
Similarly, expiration of the one-year extension of the Children’s Tax Credit (CTC) has reversed progress on reducing child poverty. Since Republicans refused to renew the expanded CTC, child poverty has more than doubled from a historically low 5.2% to 12.4%. That represents an additional 15.3 million people living in poverty in 2022 that were better off the year before because of the expanded CTC. Rather than address the growing number of families who can’t make ends meet, Congressional Republicans are focused on rolling back new enforcement measures that require millionaires and billionaires to pay the taxes they owe. These are the wrong priorities: billionaires’ collective wealth increase of $2.2 trillion would be more than enough to pay for a 10-year expansion of the CTC to $3,600 per-child.