Sen. John Cooper’s Tax Relief Claim Is FALSE
For several years Conduit For Action has been fact checking claims of candidates. We begin this year by examining Senator John Cooper’s claim he “voted to reduce overall taxes by nearly $200 million.” Senator Cooper’s tax cut claim is FALSE.
Although Cooper was on the road to having a voting record of tax cuts after his first two sessions in the legislature, Cooper spent the 2019 legislative session taking tax cuts back by voting for tax increases. These votes made him an overall tax increaser.
Senator Cooper is running for reelection in Senate District 21, which is the Jonesboro area. His opponent in the Republican primary on MARCH 3 is Representative Dan Sullivan.
We checked Representative Dan Sullivan’s record too. When it comes to voting for tax cuts, Representative Sullivan is the champion in the race. He voted for more tax cuts than Cooper even tried to claim. Representative Sullivan’s votes in 2015 through 2019 produced tax cuts of $206.1 million for FY 2020 and $240.5 million for FY 2021.[i]
How do Cooper’s and Sullivan’s votes compare?
- If Senator Cooper’s claim had been true (which it is not), Representative Dan Sullivan still would have been the clear tax cut winner.
- Even if you exclude the sales tax Cooper voted to put on the ballot, Sullivan voted for twice the tax relief of Cooper.
- If you look just at the most recent legislative session in 2019, (even excluding the vote on putting the sales tax on the ballot), Cooper voted to substantially increase taxes while Sullivan voted for substantial tax cuts.
- If you include Cooper’s vote to put the sales tax on the ballot (and you must because Cooper is citing his votes) during his career Cooper voted to increase taxes by nearly $200 million a year while Sullivan has voted for more than $200 million a year in tax relief.
No matter how you slice it Representative Dan Sullivan is the tax cut candidate in Senate District 21. Senator Cooper couldn’t find a tax he didn’t like in 2019.
DEBUNKING COOPER’S TAX CUT DOCUMENT
To support his claim of tax cuts, Senator Cooper used a document prepared by the Bureau of Legislative Research (BLR) titled “Changes to Arkansas Tax Policy 2019-21.” The document shows a reduction of taxes for Fiscal Year 2020 of $187.6 million; and Fiscal Year 2021 of $199.2 million.
If you didn’t know better you might think the document supports Cooper’s claim, but it does not. Senator Cooper misuses the document to claim something the BLR document does not say. Plus, there are some errors in the BLR document that caused it to overstate tax relief.
First, by using the document, Cooper is taking credit for a $60 million a year grocery tax cut passed in 2013. Senator Cooper wasn’t even in the legislature in 2013.
Second, the BLR document has errors and omissions that cause its estimates of tax cuts to be overstated by $25.3 million in FY 2020 and $26.3 million in FY 2021. (More detail concerning the errors will be addressed below.)
From just these first two items, Cooper’s claim of tax relief is shown to be overstated by almost double. But, his voting record gets much worse as you will see next.
Third, Senator Cooper again misuses the BLR document. He claims it as a record of what he “voted” for but the BLR document only addresses changes that had been “implemented” in the two years covered. This means the BLR document does not cover Senator Cooper’s vote for a $293.7 million a year sales tax to begin in 2023. Cooper voted for HJR1018, which puts a one-half percent (0.50%) sales tax on your November ballot. By voting to put the tax on the ballot Cooper has done everything he can as a legislator to try to impose the tax. This $293.7 million a year tax will start being collected in 2023 UNLESS you stop his tax at the ballot box.[ii]
Supporters of the one-half percent (0.50%) sales tax say the new tax does not increase your taxes and just continues an existing tax. They phrase it this way to avoid the truth that in 2023 the proposal will increase your taxes by $293.7 million more than it would be without the new tax. An existing tax was passed several years ago with the guarantee that the tax would end once a debt was paid off. That will occur in 2023.
Instead of Cooper voting against the new tax so you can have the tax relief you were promised, Cooper voted “For” the tax. Without passage of HJR1018 Arkansans will pay ZERO beginning in 2023. With Cooper’s vote “For” Arkansans will pay $293.7 million a year, unless you veto his tax at the ballot box.
The sales tax is being considered at a time when the state is already setting record tax collections and amassing a surplus of your money. Plus, the Arkansas sales tax is one of the highest in the nation.
In the past some legislators have tried to avoid blame for passing ballot issues by claiming they were not voting “FOR” the proposal but only voting “FOR” letting the people decide. That argument has never worked. Voters know you do not vote to put something on the ballot if you are against it.
BEWARE: This sales tax will be put into the Arkansas Constitution and will be nearly impossible to reduce or repeal.
NOTE: Cooper voted “For” the tax. Representative Sullivan voted “Against” the tax.
2019 THE YEAR COOPER INCREASED YOUR TAXES
Before 2019, Senator Cooper had previously voted for a total of $167.4 million in tax cuts. BUT in 2019 to take the money back by voting for a list of taxes.
Despite voting for some tax cuts in 2019, the net result of Cooper’s 2019 votes is — increased taxes of $64.3 million in FY 2020 and $54 million in FY 2021.[iii] That doesn’t even include Cooper’s 2019 vote “FOR” the $293.7 million a year sales tax.
In 2019, Senator Cooper helped pass:
- An internet sales tax you pay on your online purchases from out-of-state sellers (SB576)
- Gas and Diesel fuel tax increases (SB336)
- Tax increases on tobacco products and e-cigarettes (HB1565)
- A tax increase on your cell phone bills (HB1564)
- A tax increase on water bills (HB1737)
- A one-half percent (0.50%) sales tax to appear on your ballot at the November 2020 election (HJR1018)
Meanwhile, Representative Sullivan voted for only one of those taxes … the cell phone tax to fund a 911 system. Even with this one tax vote, Sullivan’s 2019 votes produced overall tax cuts of $37.2 million for FY 2020 and $71.6 million for FY 2021.
EXPLANATION OF THE BLR ERRORS
The BLR document cited by Senator Cooper has three errors causing the document to overstate tax relief by at least $25.3 million in FY 2020 and $26.3 million in FY 2021. Here are the details.
- BLR Error On Military Retiree Act. The BLR document says the 2017 military retiree bill cuts taxes by $13 million, but the BLR failed to include revenue from taxes imposed by the same bill. The error caused the BLR to overstate tax cuts by at least $13 million. The DFA Fiscal Impact said the bill was revenue neutral (No overall tax cut). The new taxes in that bill included an increased sales tax on soft drinks, increased sales tax on candy, a new tax on digital downloads (such as movies, music, and e-books), and taxing unemployment compensation as income.[iv]
- BLR Error On Internet Sales Tax Act. The BLR document says the Internet and Corp. Reform (Act 822 of 2019) will increase state tax revenue by $32.2 million in FY 2020 and $26.5 million in FY 2021. The BLR numbers are substantially different from the DFA Fiscal Impact. The difference appears to be explained by the BLR’s failure to include the portion of the internet tax that goes to cities and counties. The DFA numbers and BLR numbers would substantially match if the tax going to cities and counties were added into the BLR document. DFA listed the portion of the tax increase going to cities and counties as $10.8 million in FY 2020 and $11.8 million in FY 2021. Therefore, the BLR underestimated the tax increases by those amounts.
- BLR Failed To Include Tire Tax. The BLR document fails to include increased taxes from the Tire Tax (Act 317 of 2017). The DFA Fiscal Impact Statement provides only a partial estimate of these taxes. It shows a tax increase of $1.5 million a year on new tires, but DFA said it didn’t have enough information to make an estimate on the tax from mounting used tires.[v] So the tax increase was more than $1.5 million. Note: Senator Cooper voted “For” the tire tax and Representative Sullivan voted “Against.”
BY THE WAY….
- Internet Tax Increase – Double What DFA Said
The DFA estimate of how much the internet sales tax increases your tax burden was: $43.2 million in FY 2020 and $47.1 million in FY 2021. Opponents of the internet sales tax accused DFA of lowballing the estimate. Two years prior the sponsor of an internet sales tax bill claimed his tax would be an increase of $100 million a year. We don’t think DFA intentionally made a low estimate, but DFA now says collections appear to be far above what they said in the Fiscal Impact.
In December John Shelnutt, the state’s chief economic forecaster, told the Democrat-Gazette: “We are running about double the monthly estimate on the marketplace sellers’ portion of internet sales.“[vi] Double? This would put the tax closer to the $100 million cited in 2017 than DFA’s official estimate. Although DFA’s original estimate is significantly low, this article has not made any adjustments based on DFA’s admission. If we had, however, Senator Cooper’s tax increases would be substantially higher.
DFA’s underestimation of the internet sales tax also brings to mind criticisms of DFA’s Fiscal Impact for the 2017 military retiree bill with its accompanying taxes. In 2017, opponents complained DFA’s estimate of the new taxes was low. Months later a Freedom of Information Act request was filed with DFA to find out how much new tax was actually being collected. DFA responded it has no way to determine how much new tax the changes produced. So, did DFA lowball the 2017 number as opponents claim? We will never know, and the executive branch likes it that way.
- The Tax Cooper Voted For, But The Tax Died In The House
Readers looking at Senator Cooper’s record may also want to note his poor tax policy choice by voting for SB571 of 2019. The bill passed in the Senate with Senator Cooper’s help, but, fortunately, the bill was gutted in the House of Representatives and died. Opponents of the bill called it the Redistribution of Wealth Bill. The most notable part of the bill would have given some low-income Arkansans more of your money in so-called “refunds” than they paid in taxes. To give away the money and make other changes, the bill would have imposed new taxes.[vii]
Senator John Cooper said, “I am proud to have been part of the effort to reduce the tax burden on those in District 21 and across the state!”[viii] Yes he voted to reduce some taxes, but because he voted to increase many more, his “efforts” are instead bringing Arkansans a higher tax burden.
Meanwhile Representative Dan Sullivan’s votes resulted in overall tax cuts of $206.1 million for FY 2020 and $240.5 million for FY 2021.
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