Find out more →

Get unlimited access. Become a digital member!

Monday, November 28, 2011

Davy Carter sets hearings on tax reform

Posted By on Mon, Nov 28, 2011 at 10:25 AM

TAX REFORM TALK: From Rep. Davy Carter.
  • TAX REFORM TALK: From Rep. Davy Carter.
Roby Brock's Talk Business has a good report on Republican Rep. Davy Carter's plan, as chair of the House Revenue and Tax Committee, to hold hearings next year on income tax reform in Arkansas.

Unlike many others in his party, Carter understands sensible reform isn't all about cutting. He'd like to reshape income tax brackets in a "revenue neutral" way.

That can't be done through income tax brackets alone, as a practical political matter. It would mean a new higher bracket for the wealthy or dramatic shifting of the overall income tax burden to higher income people. That's not what Carter has in mind, however.

Carter is nonetheless correct that the state graduated income tax is out of date with its inception in the early 1970s. The top marginal rate, 7 percent, kicks in around $32,000. That's not much beyond the federal poverty level for a family of four with a single wage-earner.

So if income tax brackets are made more progressive — meaning lower for the vast majority of Arkansans — somebody has to pay more. Or else schools, prisons and nursing homes would suffer an enormous hit.

Carter's solution is to review the state's many sales tax exemptions. Many have been down this road. All have failed. That's because the biggest sums of money saved by exemptions are saved by businesses with well-paid lobbyists intent on hanging onto preferential treatment — think industrial consumers of electricity; think manufacturers; think media, with their advertising exemption.

It's a worthy idea. But, inevitably, income tax reform that benefits the greatest number of citizens, means some people are going to have to pay more. Carter, at least, isn't following the leadership of congressional Republicans who think the solution is to directly increase taxes on the poor and middle class so as to continue preferential tax treatment for the wealthy. Carter's biggest problem with equity will be dealing with his party's perennial push for an even lower tax on capital gains. Something like 80 to 90 percent of the income tax benefits on this tax break go to the wealthiest taxpayers. To make up that loss inevitably means a regressive sales tax increase or some other punishing tax burden on poorer people.

Good luck with all that, Rep. Carter.

Here are some other ideas:

* Restore an estate tax in Arkansas that's a percentage of the federal levy. It only affects people with millions in assets.

* Add a new 8 percent income tax bracket for taxable (after deductions) income of, say, more than $200,000. And index it.

* End the sales tax exemption legislated for art purchases by Alice Walton's Crystal Bridges Museum of American Art, an exemption no other museum in Arkansas enjoys. Shouldn't all museums have it, too? It saved Crystal Bridges — and cost the state and local governments — $30 to $40 million, by rough estimate. Sounds like a lot of money, unless you're a billionaire.

More where those came from.

Tags: , ,

Comments (5)

Showing 1-5 of 5

Add a comment

 
Subscribe to this thread:
Showing 1-5 of 5

Add a comment

More by Max Brantley

Most Shared

  • Michelle Duggar and the Family Council try to torpedo Fayetteville non-discrimination ordinance with lies

    The Arkansas Family Council has enlisted Michelle Duggar to oppose a Fayetteville non-discrimination ordinance with a fear-mongering robocall.
  • Train derailment in Hoxie kills 2; homes evacuated

    Two people were killed with two trains collided near Hwy. 67 early this morning, and State Police are evacuating residents of the southern end of the city while the trains burn. U.S. 67 south of Hoxie and U.S. 63 are closed. The trains were carrying hazardous chemicals.
  • Minimum wage group turns in nearly 70,000 additional signatures

    Give Arkansas a Raise Now, the group seeking to qualify a ballot measure to raise the state minimum wage from $6.25 to $8.50 an hour by 2017, turned in an additional 69,070 signatures to the Arkansas Secretary of State's office today.
  • American Bridge releases report on Koch brothers' environmental impacts and layoffs

    American Bridge, the liberal PAC formed by David Brock, the former Clinton foe now dedicated to round-the-clock Hillary Clinton defender, is out today with a new report on environmental impacts and layoffs from Koch Industries. The report focuses on the business activities of the Koch brothers — more famous for hundreds of millions in political spending aimed at slashing government services, regulation and taxes — in twelve states, including Arkansas. From the report: "The Kochs' extreme, self-serving agenda is bad for working families. And that reality is starkly embodied not only by their political persuasions, but by their business endeavors."
  • And then I ... read about a tour of sculpture installations by Barbara Satterfield

    Ceramicist Barbara Satterfield, one of the Arkansas Times' "Visionaries" in 2013, has announced the creation of a touring, interactive sculpture exhibit that will be installed in public places in Helena, Heber Springs, Dardanelle and Warren before the final exhibition at the Cox Creative Center.

Most Viewed

Most Recent Comments

Blogroll

 

© 2014 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation