Count on it: The final weeks of the legislative WILL include a full restoration of the capital gains tax cut, including the windfall exemption given the very richest taxpayers.
You may remember that Gov. Asa Hutchinson, in pushing an income tax cut for people making between $21,000 and $75,000 a year, first called for rolling back a 2013 capital gains tax cut to offset the revenue loss. The legislature wouldn’t stand for that. It demanded retention of some of the capital gains tax cut — to reduce the tax rate from 50 to 40 percent of the ordinary tax rate.
I expect to see action soon on HB 1402 by Rep. Matthew Shepherd. It will restore the 50 percent tax break, putting the rate on sale of assets at 3.5 percent of the gain, rather than the almost 7 percent charged on top dollar income. The capital gains tax is overwhelmingly enjoyed by the wealthy. Shepherd’s bill also restores the unbelievable total exemption on gains in excess of $10 million.
So the wealthy will get their full capital gains tax cut back. And taxpayers making between $21,000 and $75,000 will get a tax cut.
And what of the working Arkansans who make less than $21,000? They account for 40 percent of taxpayers. So far, they get nothing. Hutchinson has indicated they are well cared for by “welfare” programs, though we’ve illustrated that this isn’t true. Many don’t qualify for food stamps or Medicaid or other assistance. They just get to subsist.
There IS pending legislation for them, too. Rep. Warwick Sabin has introduced a bill to provide a state earned income tax credit for low-income workers. Will the Republican-controlled legislature and governor — while giving tax breaks to everyone else — decide the state can’t afford giving a few scraps to the working poor? If you’re making odds, the chances of a tax break for the ultra rich are a whole lot better than one for the working poor. Those lucky ducks are already well taken care of. If they want breaks, they can inherit some Walmart stock at no cost, too.