Arkansas is the perfect place to try out this new health trend. Read all about the what, why, where and how here.
If Gov. Mike Huckabee's first days in office are a window on his administration, good sense and manners will often take flight but the peanut gallery will never return to their seats.
First, Huckabee moved the execution of a death-row inmate up six weeks from the date set by Gov. Jim Guy Tucker. Huckabee and not Tucker will now get credit for snuffing out that execrable life. One remembers the last day in office of Gov. Orval Faubus. His only sleepless night in 12 turbulent years, Faubus said, were those preceding an execution, when he wrestled with the awful knowledge that he had the power to spare the wretched life or at least add some time for redemption. Bring it on, the sooner the better, Gov. Huckabee seemed to say.
He followed that by the announcement that he was wiping out the sales tax on groceries. This time, the governor did take a page out of the political playbook of Faubus, who knew the power of symbols and of a timely government check. Faubus would increase welfare checks by $5--in October, right before elections.
Gov. Huckabee actually isn't proposing to do a thing to the sales tax on groceries. It will go up by an eighth of a cent, not down, under his scenario. He endorsed a sales tax for recreation, on the ballot in November.
Stripped of the rhetoric, here is what the governor proposes: He would give about 2.3 million Arkansans--everybody except convicted criminals and the 250,000 poorest people--a state check for $25 to $50 every October. The amount would depend on the economy, apparently.
The poorest people wouldn't get checks because they receive federal stamps to help them with grocery costs from time to time. Farmers who receive large federal subsidies and rich investors who receive multiple tax shelters would get the checks, but not the poor. Though food stamp purchases are exempt from the sales tax, recipients still pay a higher share of their income on the sales tax than most of us.
Though everyone will pay slightly higher grocery taxes, the governor said the $25 or $50 checks should represent to people part of the money they spend on grocery taxes. People could just as well consider it a rebate of taxes on utilities, gasoline, property or any other commodity.
If the governor wants to exempt groceries from the sales tax, he should just propose it. The argument that it would create problems for merchants, who would have to separate non-food items to be taxed, is baloney. Most other states do it and our merchants are equipped to separate items now. The problem for merchants is that many would lose a source of modest profits if the tax were repealed. They get to keep a portion of tax receipts.
The flexible cash rebate was calculated for maximum political benefit (and will go by the wayside at the first recession, as it did in New Mexico). Other states give some form of rebate for grocery taxes for low-income people by refundable credits through the income tax system. Bill Sherman, a state representative, almost got such a plan through the legislature in 1983, but senior legislators persuaded Gov. Bill Clinton at the last minute to dishonor his word and foil it.
People would have the money much earlier in the year and it would be easier to administer if it were treated as a tax credit. Why wouldn't Huckabee do it that way? No reason but this: A check from the administration will be a timely reminder of who their benefactor is. If they need reminding where the Huckabucks come from, there will be a letter.
The justification for the rebate is this year's $97 million surplus. Remember why there was been a substantial surplus each year under Tucker: He budgeted tightly. State parks and some other agencies were given no increase in funds--they were expected to raise their own from fees.
Huckabee said he would work to ratify the constitutional amendment raising the sales tax an eighth of a cent to pay for tourism and recreation, which would raise $35 million to $40 million a year and couldn't be repealed because it will be in the constitution. Why not just raise those appropriations from existing tax receipts instead of raising taxes? More simply, why give people $50 million or $60 million each year and then raise their taxes by $40 million? If you can get credit for both, why not?
Print headline: "The genius of 'Huckabucks'" August 2, 1996.
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