Of course a House committee today rejected a Democratic proposal for an earned income tax credit for low-income working people.
The proposal would have been to give such taxpayers 10 percent of their federal credit. It would cost $76 million, about half the windfall proposed by Gov. Asa Hutchinson for the richest taxpayers. About three-fourths of the tax break will go to the top 1 percent, those making more than $456,000 year.
PS: Democrats earlier were defeated in an effort to keep a 6.9 percent marginal tax rate in place for income over $456,000. This would NOT have meant NO tax break for the richest 1 percent. They still would have still reaped a tax break of about $3,750 each by seeing the top marginal tax rate drop from 6.9 to 5.9 percent on all income of more than about $80,000 up to $456,000. Together, that’s a benefit worth nearly $50 million to those 12,000 to 14,000 taxpayers.
Gov. Asa Hutchinson’s tax cut for the rich goes before the House this afternoon. It’s lacking a few votes to meet the needed 75. Most of the 24 Democrats are opposed. A few Republicans aren’t on board yet. Some have problems with the governor’s highway tax increase plan. Some have actually raised a question about how the tax cut will harm public services.
26 states have earned-income tax credits. An Arkansas credit would help 300,000 working families.