Sales Tax On Ballot Despite Economy Wrecked by COVID-19 Shutdowns
While you have been worried about COVID-19 and about whether you will be able to make a living in its wake, the tax-and-spend crowd have been busy promoting Ballot Issue #1 to impose a permanent sales tax that will go into the Arkansas Constitution where it will be nearly impossible to remove. They hope you will forget all about your family’s economic woes and vote for the tax (or at least that you will stay home and not vote against it).
Your November ballot will include Issue #1 to impose a new sales tax once a temporary tax for roads expires in 2021. Issue #1 will impose a permanent one half (0.50%) sales tax to be used for highways and roads.
Seven things the tax-and-spend crowd do not want you to think about:
- If passed the tax will keep Arkansas’ sales taxes one of the highest in the nation. According to the Tax Foundation, Arkansas’ sales tax rate is the 9th highest in the nation and when they compared the combined state/local sales tax rates, Arkansas has the 3rd highest combined rate in the country. Issue # 1 keeps the Arkansas’ sales tax high and one of the worst sales taxes in the nation.
- If passed, promised tax relief goes away. The current tax was passed with the promise that it was temporary and once it expires in 2023 its one half (0.50%) sales tax would expire and lower our taxes.
- There is no rush to pass the tax. Even if Issue #1 is passed, its tax would not become effective until long after the legislature meets again. The legislature meets in regular session next year and the Issue #1 tax doesn’t become effective until the current tax expires in 2023. If your legislators really think the tax is so wonderful and necessary, they can propose a bill to pass a tax by an Act of the legislature.
- It is much worse to put a tax in the Constitution and to do so by an Act of the legislature. An act of the legislature can be amended or repealed as needed by the legislature in the future if appropriate. If Issue #1 is passed in November, we are stuck with the tax forever.
- There wasn’t enough support to pass the tax in the legislature. The only reason we are facing the possibility of a permanent tax in the Constitution is because in 2019 the road tax was so unpopular among legislators there weren’t enough votes to get a majority to pass the tax by an Act of the legislature. Some legislators who thought they could escape responsibility for supporting the tax agreed to refer it to the people.
- The legislature just passed an additional fuel tax for roads. In 2019 the legislature increased the tax on gasoline and diesel. How do you like the higher fuel taxes during the COVID economy?
- Tax increases weren’t the only plan for roads. Lieutenant Governor Tim Griffin supported highway as a priority but opposed adding tax. Griffin said: “Highways should always be a top priority and deserve a long-term strategy that provides robust and reliable funding without raising taxes by using savings from government transformation and, like 34 other states, dedicating a portion of state general revenue to fund them,” he said. “I believe we need to address challenges like this with reform first, not tax increases.”[i] (emphasis added)
Paid Cheerleaders. Most of your city and county officials will support the permanent tax. Why? Because the drafters of Issue # 1 included a slice of the revenues for local government roads as a way to drum up support from your local officials and their employees. Local governments always support getting money from state tax. Again, if keeping Arkansas taxes high is such a swell idea, your local politicians could lobby the legislature to pass a tax by an act of the legislature instead of passing a permanent change to the Constitution.
The election is Tuesday, November 3, 2020. You can early vote beginning Monday, October 19, 2020.
With early voting you have plenty of opportunities to vote at a time convenient to you while avoiding crowds. In other words, you can vote while maximizing social distancing.
Issue #1 (Arkansas Transportation Sales Tax Continuation Amendment) will put a sales tax in the Constitution. That is bad law and bad for Arkansans.
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