As expected the House Revenue and Taxation Committee amended SB 6, Gov. Asa Hutchinson’s income tax bill, to reinstate the capital gains tax cut approved by the legislature in 2013.
Hutchinson’s proposal, by Sen. Jonathan Dismang, repealed a cut in the capital gains rate from 70 percent to 50 percent of a taxpayer’s top marginal tax rate. The amendment would keep the same deduction this year, but make the deduction 40 percent rather than 30 percent afterward. This means the bill will cost $9 million more a year.
I’m seeking a comment from the governor’s office.
Progressive groups already are raising concerns. If a Hutchinson bill with some progressive elements is already being rolled back after just a few hours of life, they fear that this is a “floor” on what the legislature is likely to do and the “ceiling” of how many other tax cuts will be sought by Rep. Charlie Collins and others could be large.
This follows the Joint Budget presentation where the Hutchinson budget included the full effect of repeal and, by early session necessity, lacks some specifics about sources of one-time money and other budget specifics.
Can Hutchinson meet his budget goals without the capital gains repeal, particularly if there’s more to come?
Can progressive groups make any headway by noting the unfairness of a bill with NO benefits of any sort for people making less than $21,000 a year but a capital gains tax cut that provides half its dollar benefits to the 1 percent of taxpayers making more than $250,000 a year.
Collins like to call these super wealthy job creators. There’s no study that supports that. Wealthy people make money off investments and reinvest the money in stocks, bonds and other investments in which they can realize a good rate of return. They are not limited by state boundaries. They are just rich.