Stephens Media notes the tax cuts due to take effect Thursday, the start of a New Year.
* INCOME TAX RATE: The top rate of 7 percent drops to 6.9 percent, at an annual cost of $55 million.
* INCOME TAX DEDUCTION: The standard deduction will increase from $2,000 to $2,200.
* CAPITAL GAINS TAX CUT: This tax on sale of investment — a benefit overwhelmingly enjoyed by the wealthy — will drop from 4.9 percent to 3.45 percent. This and the increased personal deduction are expected to cost $24.5 million, mostly from the capital gains reduction. Already in effect was a total capital gains tax exemption for gains of more than $10 million. Yes, total.
* UTILITY TAX RATE: The second and third phases of a reduction in the sales tax rate on utilities used in manufacturing will occur in calendar 2015 and eventually cost another $27.4 million a year.
That’s more than $100 milion in cuts. Gov. Mike Beebe has suggested delaying some of that because of a tight budget. He’s irrelevant. Asa Hutchinson, to take office Jan. 13, wants to keep these and cut income taxes $100 million more. He’s not yet said if he supports continuation of the private option Medicaid expansion, which is pumping $100 million or so of Obamacare dollars into the state treasury. The question looms larger with each passing day.