Favorite

Flaws in Huckabee rebate 

Governor Huckabee doesn't think people ought to pay to pay taxes on groceries and plans to do something about it. I agree with him, but I just don't like his plan, which is to give a rebate to every man, woman and child in Arkansas at a cost of up to $120 million a year.

Granted, his plan has improved. At first he wanted to exclude prison inmates and everyone getting food stamps, but he found out that even food stamp recipients have to buy some groceries. So in the proposal he has just given the legislature, only convicts are excluded.

Initially, everyone would have gotten a check for a fixed amount--$25 or $50. Under the new plan, a check will be sent the first year, but after that, state income tax payers will simply deduct the amount from their tax bill. The 200,000 or so too poor to pay income tax will still get a check.

I believe that the simplest thing to do is just exempt groceries from the sales tax. Sure, it would cost the state treasury more, but you wouldn't have to pay postage or people to cut checks and stuff the envelopes.

However, the Department of Finance and Administration says that eliminating the tax on groceries would complicate life for groceries. They would have to collect the state tax only on the non-food items (paper towels, light globes, etc.) city and county sales taxes on everything. (Local sales taxes can't be eliminated because many cities and counties have pledged this revenue to pay off bond issues.)

The department asserts that its expenses would be about the same either way. Rebates would require salaries and postage but interest collected on earmarked rebate money would cover some of it, and while it sounds simpler just to repeal the state sales tax, it would make auditing the grocers more complicated and therefore more expensive.

I'm not convinced. Nor is a CPA friend who sheds no tears from the grocers' problems. "Machines do the work," he says. Besides, grocers get paid 2 percent to collect the taxes for the state. Incidentally, of the 46 states that levy a sales tax, 20 give no percentage of the tax take to the merchants who collect it. Why should Arkansas?

What makes me suspicious of mass rebates is that there's only one state, Hawaii, that does it. It's such a grand political idea (imagine getting a check from the governor every year) that if it worked, I'd think other states would be doing it.

New Mexico used to but abandoned it in 1994 for an even bigger program: a comprehensive income tax credit for all taxes, groceries, property, licenses, gasoline, etc. But it goes only to those whose income is below $16,000.

"This is the right way to do it," according to Laird Graeser, director of tax research and statistics for New Mexico. "It's much better than the old system because you target the people you really want to help." The credit averages about $125 per person, with a maximum of $450 to any one family.

It's admirable to take the tax off groceries. To make up for the loss of revenue, we could simply raise the sales tax; ours is the 34th lowest in the country (4.625 cents on the dollar) and needs rounding off anyway.

But if the governor persuades legislators to pass a rebate, it should go only to the poor. Why give back $25 every year to people like Win Rockefeller? Rich people spend a lot more on groceries, and that's the only thing that makes the sales tax the least bit progressive.

Print headline: "Flaws in Huckabee rebate" December 13, 1996.

Favorite

Speaking of...

Comments

Subscribe to this thread:

Add a comment

More by Robert McCord

  • The man behind the camera

    Newspaper photographers never get much money or attention. I know because I got my first job as one in the 1940s. In 1957, a guy named Will Counts learned it when he made the best pictures of the desegregation of Little Rock's Central High School.
    • Oct 4, 2007
  • A straw poll

    Max Brantley took the week off. In his place, Robert McCord writes about presidential politics.
    • Mar 15, 2007
  • NLR: Second city no more.

    A long-time North Little Rock resident muses on the arrival of a former governor and current lieutenant governor and looks back at hometowns of governors and presidential contenders from Arkansas.
    • Jan 25, 2007
  • More »

Most Shared

  • World leaders set to meet in Little Rock on resource access and sustainable development

    Next week a series of meetings on the use of technology to tackle global problems will be held in Little Rock by Club de Madrid — a coalition of more than 100 former democratic former presidents and prime ministers from around the world — and the P80 Group, a coalition of large public pension and sovereign wealth funds founded by Prince Charles to combat climate change. The conference will discuss deploying existing technologies to increase access to food, water, energy, clean environment, and medical care.
  • Tomb to table: a Christmas feast offered by the residents of Mount Holly and other folk

    Plus, recipes from the Times staff.
  • Rapert compares Bill Clinton to Orval Faubus

    Sen. Jason Rapert (R-Conway)  was on "Capitol View" on KARK, Channel 4, this morning, and among other things that will likely inspire you to yell at your computer screen, he said he expects someone in the legislature to file a bill to do ... something about changing the name of the Bill and Hillary Clinton National Airport.
  • Fake news

    So fed up was young Edgar Welch of Salisbury, N.C., that Hillary Clinton was getting away with running a child-sex ring that he grabbed a couple of guns last Sunday, drove 360 miles to the Comet Ping Pong pizzeria in Washington, D.C., where Clinton was supposed to be holding the kids as sex slaves, and fired his AR-15 into the floor to clear the joint of pizza cravers and conduct his own investigation of the pedophilia syndicate of the former first lady, U.S. senator and secretary of state.
  • Reality TV prez

    There is almost nothing real about "reality TV." All but the dullest viewers understand that the dramatic twists and turns on shows like "The Bachelor" or "Celebrity Apprentice" are scripted in advance. More or less like professional wrestling, Donald Trump's previous claim to fame.

Latest in Bob McCord

  • NLR: Second city no more.

    A long-time North Little Rock resident muses on the arrival of a former governor and current lieutenant governor and looks back at hometowns of governors and presidential contenders from Arkansas.
    • Jan 25, 2007
  • Parting thoughts

    This column is kind of a difficult one for me, and I will tell you why at the end. I have written some things that I believe would make Arkansas a better and more prosperous state.
    • Nov 23, 2006
  • On the winning side

    There were a lot of interesting things that happened all over in the country and in Arkansas at last week’s voting. For the first time I had more winners than losers, and...
    • Nov 16, 2006
  • More »

Visit Arkansas

View Trumpeter Swans in Heber Springs

View Trumpeter Swans in Heber Springs

Magness Lake, in Heber Springs, is a magnet for swans

Event Calendar

« »

December

S M T W T F S
  1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31

Most Viewed

  • Stay the course

    I am frustrated and angry with those who claim the only chance of future success is for the Democratic Party, especially in the South and Midwest, to abandon speaking directly to women and people of color and the LGBT community and instead focus on the economy and other "more comfortable" topics in order to win back some of the center.
  • Reality TV prez

    There is almost nothing real about "reality TV." All but the dullest viewers understand that the dramatic twists and turns on shows like "The Bachelor" or "Celebrity Apprentice" are scripted in advance. More or less like professional wrestling, Donald Trump's previous claim to fame.

Most Recent Comments

  • Re: Reality TV prez

    • And while we're at it, Runner, the Wisconsin recount isn't finished yet, but as of…

    • on December 9, 2016
  • Re: Reality TV prez

    • In fact, Runner, Hillary Clinton won the popular vote by 2.7 million and counting, just…

    • on December 9, 2016
  • Re: Stay the course

    • Thank you Autumn. I agree that we can not compromise an inch on the value…

    • on December 9, 2016
 

© 2016 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation