The House joined the Senate this morning in the passage of what is being called the biggest income tax cut in state history — at least a half-billion-a-year (maybe more, an independent analysis by the Institute on Taxation and Economic Policy says) when fully implemented. The vote was 82-16.
In the end, people making more than $82,000 a year will see a cut in the top income tax rate from 5.9 to 4.9 percent, a reduction of nearly 16 percent. An independent analysis says 70 percent of the money will go to the top 20 percent and the top 1 percent (about 15,000 taxpayers) will reap an estimated $10,000 a year on average. The bill includes a tax credit of up to $60 a year (16 cents a day) for people earning around minimum wage or less. The corporate income tax rate also is going to be cut, a benefit that will go in the main to shareholders who live in other states.
Rep. John* Maddox (R-Mena) again defended the big money flowing to the wealthy. They make more, he said. That’s just the way it is, he said. He said the state can afford the cut in revenue.
Rep. Megan Godfrey (D-Springdale) asked Maddox if a cut of 16 cents a day was meaningful and whether the state could spend money in a way more meaningful to people in that category. Maddox returned to his fun-with-numbers-defense heard in committee. On a percentage basis, poor families will get the biggest PERCENTAGE tax cut. Translated to dollars, it doesn’t sound so great. (About $4 a week, for example, for people making $50,000.)
But, yes, Maddox said, the more you earn, the more you pay in taxes and the more you will benefit from the cut.
An emotional Rep. Denise Garner (D-Fayetteville) said most Arkansans will receive inconsequential benefits. “What if we used that $600 million to strive for excellence?” She listed early childhood programs, after-school care, help for the disabled, support for vocational training at community colleges, homeless people, inadequate housing and sewers, post-partum depression, behavioral and mental health needs for school students.
She said the 1 percent will hardly notice the extra money, while the money could be spent to make most Arkansas lives “so much more than adequate.”
Rep. Joe Jett, (R-Success) a former Democrat, rose again to challenge the numbers by an independent consultant (cited by Garner and which the legislature has employed in the past) on the cost of the tax cut and benefits for the wealthy. He insisted the tax cut was balanced and fair. He said 104,000 people will be exempt from taxes entirely with this bill.
Rep. Reginald Murdock (D-Marianna) joined others in the tiny Democratic minority about the state’s failure to spend accumulated reserves, some from federal money, on desperate needs such as services for the developmentally disabled. “It makes no sense we have this many dollars and we walk away from here with so many people in need.” He said Democrats had to fight to get the 16-cent-a-day tax credit for the working poor. He said many Republicans opposed even that.
The House breezed through other items on the governor’s call. House Speaker Matt Shepherd refused to add to the calendar HB 1010 by Rep. Mary Bentley to allow vigilante enforcement of anti-abortion efforts as Texas has done.
*A previous version of this post called John Maddox Richard Maddox.