The Economic Minute: Capital gains revenues should be a sweet surprise in Arizona

According to an economic model developed at the W. P. Carey School of Business, Arizona is headed for a pleasant surprise in April. Capital gains taxes, typically paid quarterly with the largest payment in April, are rising, according to economist Dennis Hoffman, director of the L. William Seidman Research Institute. But capital gains are volatile, Hoffman pointed out, and therefore cannot be used for ongoing expenses or permanent tax cuts. If the model proves accurate, all eyes will be watching to see how the legislature reacts.

According to an economic model developed at the W. P. Carey School of Business, Arizona is headed for a pleasant surprise in April. Capital gains taxes, typically paid quarterly, are on the rise, according to economist Dennis Hoffman, director of the L. William Seidman Research Institute. Usually the April quarterly payment is the largest, which means the state coffers could be in for an infusion of revenues. But capital gains are volatile, Hoffman pointed out, and therefore should not be used for ongoing expenses or permanent tax cuts. If the model is correct and a sweet surprise actually arrives in April, all eyes will be watching to see how the legislature reacts. Follow Hoffman's slides as he presents the case. The Economic Club of Phoenix is a forum for the discussion of economic and business issues among academic, business, labor and public sectors in the Phoenix area. [podcast]