Tax ‘cut’ not what it appears to be

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Tax ‘cut’ not what it appears to be

Now this had to be embarrassing to Gov. Asa Hutchinson — learning just the other day that his signature tax cut plan for Arkansas would actually negatively impact roughly 200,000 taxpayers, and instead of reducing what they must pay, they will be slapped with more than $30 million in additional income taxes.

As the governor is well aware, this tax plan of his was a key factor in him getting re-elected to his second term, and now it seems the creators behind this plan obviously miscalculated.

Hutchinson’s plan has been referred to as “2-45.9” because of the rates that ultimately would be charged at different income levels. People with taxable income up to $8,000 would pay a 2 percent rate; those with between $8,001 and $18,000 in taxable income would pay 4 percent; and those making $18,001 and up would pay 5.9 percent.

Now then, there is another tax plan out there that was created by none other than the governor’s socalled tax-overhaul task force which would reduce the top rate to 6.5 percent and cut the number of individual income tax tables from three to one.

Cutting state income taxes is always welcome news and Hutchinson has made it a point of reducing the tax burden on every Arkansans. In fact, over the last six years about $50 million a year in tax cuts have been made.

Another major point that needs mentioning in all this tax cutting is that it makes Arkansas more economically competitive and allows the Economic Development commission to better recruit industry and major businesses into the state.

Let’s realize that all this is being done under the control of Republican lawmakers while Democrats are gearing up to fight for the state’s poorest population who pay little or no taxes.. What they are intending to do is create an earned income tax credit for low-income citizens and authorize sales-tax collections on Internet sales. Another goal of the minority party is to push for expanding free health coverage for Arkansans with no real plan to pay for all these government subsidies and tax cuts.

As we’ve pointed out time and time again, Arkansas has a population of about three million, and from what we understand all these tax plans pertain to just about two million people.

Hutchinson has said he wants this tax cut plan of his acted upon immediately, which would require a three-fourths vote of the 100-member House and 35-member Senate for approval. The governor says he is very optimistic he’ll get this through the Senate and the House despite the opposition coming from the minority Democrats.

This being a regular session, lawmakers will be considering constitutional amendments for voters to consider, and while we’re now being told there is no consensus about a long-term plan for boosting funding for highways we would not be surprised if they don’t push this off on voters to decide.

Senate Republican leader Bart Hester of Cave Springs made it clear there is “zero” change that lawmakers will approve a tax increase to fund highways, but he did leave open the chance they will drop this political hot potato in the laps of the people.

Sadly, lawmakers have kicked this ball down the road for years failing miserable at dealing with a long term highway plan and kicking the ball in the voters court is simply a chicken way of dealing with the situation.