Our View

Our View

More tax cuts for Arkansas? Easier said than done

Let’s be perfectly honest and say there is some skepticism as to how effective Gov. Asa Hutchinson’s Tax Reform and Relief Legislative Task Force will be, particularly in light of the fact current state revenues have lagged below projections.

Hutchinson has been a tax cut governor since being elected and is credited with successfully pushing through a $100 million income tax cuts for middleincome Arkansans, tax breaks for low-income families amounting to $50 million, and says if re-elected to a second term he will reduce the state’s top income tax rate from 6.9 percent to 5 percent.

It was Hutchinson who created this task force and has charged it’s 16-member panel of 10 Republicans and six Democrats, one of whom is Sen. Keith Ingram, D-West Memphis, with recommending further tax cuts in advance of the 2019 legislative session.

Hutchinson has been adamant in modernizing and simplifying the tax code and making the state’s tax laws competitive with other states as a way of attracting new businesses.

Some lawmakers, known for finding ways to raise taxes to fund government programs and increase spending, aren’t so anxious to cut taxes, such as Sen. Larry Teague, D-Nashville, who is on the tax reform panel. When asked his opinion about this endeavor he made it clear that it remains to be seen whether the state can afford cutting more taxes in times of tight budgets.

Teague, who happens to also co-chair the Joint Budget Committee, said before cutting taxes he would like to see lawmakers increase the state’s “rainy-day” fund to between $500 million and $1 billion before any more taxes are cut. That is the reserve fund the governor can use for emergencies.

It was interesting to note some task force members feel it will be more important for the panel to review existing tax breaks that have been passed piecemeal over the years to see which ones could be eliminated, with resulting boosts to revenue that could pay for broader tax cuts.

The idea with eliminating some tax breaks, or loopholes, would simplify the tax code and make it more fair, they say.

What these lawmakers need to realize is that if they really want to make an impression with their tax paying constituents they need to focus on tax cuts that directly impact their wallets. In many cases many tax breaks that have been passed over the years to benefit various groups have no impact on the individual Arkansans.

There is no argument to the fact that since 2008 lawmakers have cut close to $600 million worth of taxes but most Arkansans haven’t felt a bit of it being cut on them which can be very frustrating.

One roadblock these lawmakers will face will be the political ramifications there are in them trying to do away with some of the tax loopholes and exemptions. After all, many of them were created to satisfy certain segments for purely political purposes.

What the average Arkansas wants and is hoping for are real tax cuts that directly impact their personal income, something that may be very difficult.