Conform and Reform: How Arizona Policymakers Can Use Federal Tax Reform as a Spur to Reform Arizona’s Income Tax System
The federal Tax Cuts and Jobs Act (TCJA) has, for the first time in over 30 years, made significant changes to the federal tax code. The changes make the federal income tax system more amenable to new investment activity and job-creation largely by making the tax code less distortionary with respect to market decisions.
For Arizona to take full advantage of those provisions, however, policymakers will be required to “conform” the state tax code to the federal changes. State policymakers should be encouraged to conform to the new federal law because the TCJA adheres to some key principles of sound tax policy. This policy brief will outline the reasons why the state should conform to it.