That half-billion-dollar surplus is burning a hole in the pockets of millionaires and the legislators who hold their interests foremost.
On the House Revenue and Taxation Committee agenda today? No, not an earned income tax credit for poor wage earners.
But there is HB 1403 to reduce the top rate of the state income tax from 5.9 to 5.8 percent.
As ever, the benefits will accrue primarily to the most affluent taxpayers.
Arkansas Advocates for Children and Families has run the numbers by the Institute on Taxation and Economic Policy. It says 72 percent of the tax cut will go to people making more than $192,000 a year.
The tax cut would take effect in 2022. When fully implemented, it would cut revenue by $27.4 million a year. About $20 million would go to about 150,000 Arkansans, all making well into six figutres annually. This would be on top of $100 million in tax cuts the wealthy got in 2019.
The nearly 1.8 million Arkansans making less than $54,000 annually would get less than $1 million to split between them (less than a buck each on average), including hundreds of thousands of Arkansans making less than $37,000 who would get nothing at all. (Note: The average Arkansas household makes $48,000.)
Said the Advocates:
Since Arkansas must maintain a balanced budget, each dollar in lost revenue would mean less money to pay for programs that are critical to the future well-being of Arkansas’s children and families, including funding for high quality pre-k, juvenile justice reform, funding for afterschool and summer programs (the Positive Youth Development Act), K-12 education, and too many others to list.
While Arkansas has a lower unemployment rate than a lot of states, we are still above pre-recession levels of unemployment. And according to data from the Census Household Pulse Survey, almost 800,000 Arkansans are still struggling to pay their usual household expenses. More than 100,000 renters are struggling to catch up on rent. And hundreds of thousands more are struggling to get enough food to feed their families.
Instead of cutting taxes for the wealthiest Arkansans, we should find better ways to help the hundreds of thousands of Arkansans struggling with economic hardship from the ongoing COVD-19 recession.
UPDATE: The meeting was canceled because of Capitol computer problems. The House will reconvene Monday.