Just in time for campaign season Governor Asa Hutchinson is calling a special session to pass income tax cuts. Cutting taxes is a good thing, but the truth is his tax cuts are little more than checking off a box so politicians can say they cut taxes in 2021. The Governor raised our taxes in 2019 and his new tax package is basically tithing back a small a portion of his tax increases.
In 2019 Asa had some highly publicized tax cuts, but he increased other taxes far more than he gave back. He was “Mr. Give and Then Take Away More.”
One of the several tax increases in 2019 was his tax increase on gasoline and diesel fuel. (Doesn’t that feel good when you see the prices at the pump?) Another of the 2019 tax increases was his internet sales tax. Supporters of his internet sales tax made it sound like those bad old out-of-state companies would now have to pay up. Actually, every penny and every dollar of the internet sales tax comes out of the pocket of Arkansans. There is no telling how much money the internet sales tax is taking out of the pockets of our Arkansas taxpayers. Before the tax was passed, the Department of Finance and Administration gave a ridiculously low estimate of how much the tax would take from taxpayers. A few months after it passed, DFA said collections were running at least double what they had said. We think it is likely the internet sales tax is running much higher than that but we haven’t seen a straight answer out of DFA.
In any event the Internet sales tax made a significant contribution to the nearly $1 billion surplus in general revenues the state had amassed by the end of June.
Now with the state flush with cash, Asa only wants to tithe back a small portion of recent tax increases.
Tax cuts are desperately needed in Arkansas. Did you know Arkansas is considered the 9th worse state for high individual income tax? Did you know two adjoining states do not tax wages and salaries? Texas does not have an individual income tax and Tennessee does not tax wages and salaries, but taxes interest and dividends.
Instead of Asa’s tax games, Arkansas needs significant tax cuts to bring our state more in line with other states. And, instead of putting off the tax cuts, some for years, we need tax relief now.
Will your state Representative and state Senator play Asa’s tithe back game or will they fight to make significant tax cuts needed to make Arkansas competitive with other states.