Arkansas Blog

Oh, they'll always find a way to keep that tax on groceries. Even with all this surplus, they'll argue that it is too hard to define the term "groceries." I've decided that the legislature is, for the most part, a collection of maroons, usefull mainly for some sort of sad and pathetic entertainment.

I think that if a legislator really wants to end this in a responsible way they would file legislation similar to the following:
1. Make the first $150 of ANY purchase tax exempt.
2. Rasie the sales tax cap so that luxury items get taxed more.

Most people can buy a reasonable amount of groceries or prescription medications with a single purchase of $150 or less. This is easy to understand, has a beneficial net effect and is fiscally responsible. Therefore it would never pass.

A tax, in most situations, is a form of ecomonic enslavement. I don't have a problem paying my share; however, we are taxed far too much already. A question: where does all the money go, really? I am familiar with all the rhetoric but where does all the money go? We need to abolish the payroll tax, too.

Proposing to give us all a minuscule tax reduction on our cartfulls of Pepsi and fried pork rinds with the dusting of dark orange carcinogenic flavoring is the stuff that great election year pandering is made of. But isn't this much-vaunted state revenue surplus largely attributable to the imposition of the sales tax on 'services,' effective July 1, 2004? On that date, our ten dollar tab for the dry-cleaned suit suddenly jumped to $10.90 here in North Little Rock (6% state plus 1% county plus 2% city--well, 1% city, which rose to 2% soon thereafter). Talk about being taken to the cleaners!

Once again.....all together now....

THERE IS NO SURPLUS!

We have a billion or two in unfunded school facilities needs.

Also, it's stupid to cut a tax that is also paid by out of state visitors. Instead of lowering the sales tax, we need to provide direct yearly tax rebates to Arkansans.

I recall a preacher from Hope who had political aspirations campaigning on eliminating the sales tax on groceries and lo and behold he eventually got into office. Guess what. He back tracked immediately. He discovered all the cities and counties who had bond indebteness with 20 year payments based on projected local sales tax revenues and this preacher could not figure out a way to make up the lost revenue to the local governments if the tax was removed from groceries.

History will repeat itself again, of politicians pandering to the public with promises they can't keep.

Believe, having a "surplus" is preferable to having to go into a legislative session and raise revenues. I am currently a state senator and I know what I am talking about. Talk of sending it back is just that...talk. You don't go out and blow a nice savings account just because it is in the bank. We are going to do our best to use the surplus for things that are needful that we couldn't purchase otherwise...just like you would do at home with any surplus money you might find yourself having.

Anyway, though, having an excess in the treasury is certainly better than having too little. For that we all should be very thankful.

The tax on groceries is wrong. Like medicine, groceries aren't an optional luxury; and, as always, it hits poor people hardest. Anyone who's living (or has lived) on a tight budget--like many of our elderly and families with young children--knows that when 8+ percent of your grocery money goes to the govt. it makes a dent in the amount of food you're able to carry home.

He discovered all the cities and counties who had bond indebteness with 20 year payments based on projected local sales tax revenues...

So would it work to remove the state sales tax on groceries but let local jurisdictions continue it where they need to?

I like the idea of Billy, NLR, to raise the sales tax cap so that luxury items get taxed more. Would this be enough to offset eliminating the sales tax on groceries? What effect would it have on sales of more expensive items? If it hurts sales of these items, would Arkansas workers be thrown out of work as factory orders drop?

I remember that a national luxury tax on yachts didn't work because it ended up throwing too many people out of work at boat factories. But it might work better at the state level.

I think groceries are one of the largest expenses of the average family. Eliminating it would mean a LOT of state revenue must be raised somewhere else. Where should we get it?

Raising state income tax would allow making up the shortfall without hitting low income people as hard as sales taxes. Maybe that would be the way to go, but it's hard to get politicians to vote for their own political suicide.

Senator - Lord I hope you are Democrat - because that is a reasonable and honest assessment!

My only hope Senator, is that you'll take that "extra" money and invest it in school infrastructure and expanding pre-K - not let it become a pissing contest about which one of you get what for your pet projects. We got an educational system that is number 48 in the country - little pride in that - and after all education is an investment in the future - I can see no better way than to use that money as a long-term investment.

Dear state senator....I wonder if any of the surplus could go towards raises for the lower paid state employees? Puh-lease???

I can't believe I agree with zelda but she has it right. I know the numbers and I supported Amendment 3 in 2002 (the elimination of sales tax on food and medicne). The pigs at the public trough came out squealing lies, lies and more lies, led by Jodie Mahoney and Ark. Times. They spent at least $1.5 MILLION to beat it. If you think that same crowd will not fight ANY reduction without an escape clause big enough to drive Max through it, think again. By the way, the Dem-Gaz supported the amendment.

When asked why we had this tax, a wise king maker in Ark. said "we tax poor people in Arkansas because they're used to it". If someone says they care about the poor ask how they voted in 2002 on Amendment #3.

Defining groceries is not difficult, and the legislature can do so following the approach of states that already have this sales tax exemption. But they should keep the tax on soda.

Raising the tax on luxury goods however you define that won't work. Assuming luxuries are mostly big ticket items, people will simply go out of state to make those purchases..

...I think groceries are one of the largest expenses of the average family. Eliminating it would mean a LOT of state revenue must be raised somewhere else. Where should we get it?

I'm not an accountant nor a fancy/schmancy professional government spokesperson, but...I, along with a multitude of other non-trough people, could take a red pen and slash enough good-old-boy crap to fill in a food-sales-tax gap...or at least get very close. We pay enough taxes, in general. There's never enough, however, to satiate the greed at the top of the tax chain and tax the rest of us fairly.

Of course a 'fair' tax system isn't going to happen (ending corporate welfare/pork/political nepotism); I just think it's important to point out periodically that it's usually greed/corruption that stand in the way of a progressive/fair tax system...not the lack of resources.

And, I agree Arkie Paul...defining 'groceries' wouldn't be difficult (heck, grade school children could do it). It's like a lot of other political legalese: Purposely made obtuse so it will escape close scrutiny and accountability.

It would be a foolish idea to raise other taxes so that the sales tax could be lowered. Sales taxes are the only way to tax visitors and guests. Sales taxes are the only way to tax foreign-made goods. The entire international tax system is set up to FAVOR sales taxes, and to DIS-FAVOR income and property taxes. Eliminating the sales tax, and replacing it with income taxes or business taxes would be the most ridiculous way of spending our money. In order for Arkansas to compete, it needs to ATTRACT more business. Raising other taxes is a sure way to REPEL other business (including small businesses and large businesses like Toyota). We have to learn sometime, and we better learn now, before either one of the guys running for Governor makes an inescapable promise to lower sales taxes. Indeed, since SALES TAXES are now DEDUCTIBLE ON FEDERAL INCOME TAX, we should be talking about lowering the stateINCOME TAX, which is losing favor as a tax-deductible item in Bill Thomas' Washington DC.

I don't think Hardwick will get his measure passed. I would look for another bill to come out of the House. Hardwick burned some bridges that I think will not be rebuilt.

No one, that I know of, is talking about eliminating sales tax altogether...just the tax on food.

Indeed, since SALES TAXES are now DEDUCTIBLE ON FEDERAL INCOME TAX...

When SALES TAX becomes DEDUCTIBLE!

IRS Issues Optional Sales Tax Tables

IR-2004-153, Dec. 17, 2004

WASHINGTON - The Internal Revenue Service has made available on its Web site Publication 600, Optional State Sales Tax Tables, which taxpayers may use for their 2004 returns. The IRS also will send Pub. 600 to all taxpayers who get a Form 1040 tax package.

The tax law authorizing this optional deduction for state and local sales tax instead of state and local income tax was enacted too late in the year to include the tables in the tax instruction books.

The American Jobs Creation Act of 2004 authorized the sales tax deduction as an option for those who itemize deductions, letting them choose between deductions for state and local income or sales taxes. Taxpayers will indicate by a checkbox on line 5 of Schedule A which type of tax they're claiming. The law provides this choice for Tax Years 2004 and 2005 only.

"Taxpayers should check these tables to see if they're entitled to a larger sales tax deduction than a state income tax deduction," said IRS Commissioner Mark W. Everson.

The tables give taxpayers a sales tax deduction amount as an alternative to saving their receipts throughout the year and tabulating the amount actually paid. Taxpayers use their income level and number of exemptions to find the sales tax amount for their state. The table instructions explain how to add an amount for local sales taxes if appropriate.

Taxpayers also may add to the table amount any sales taxes paid on:

A motor vehicle, but only up to the amount of tax paid at the general sales tax rate; and
An aircraft, boat, home (including mobile or prefabricated), or home building materials, if the tax rate is the same as the general sales tax rate.
While this deduction will mainly benefit taxpayers with a state or local sales tax but no income tax ' in Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming ' it may give a larger deduction to any taxpayer who paid more in sales taxes than income taxes. For example, a person may have bought a new car, boosting the sales tax total, or claimed tax credits, lowering the state income tax paid.

Some of you people write damn good lines but many of you are not thinking about the true issues.
This is an atempt to lower the cost for people like mexicans so they won't have to pay taxes at all.
The taxes needs to be raised on groceries and drugs and lowered on income taxes or some other place that will benifit the working people.

Hardwick's bill will probably exempt all alcoholic beverages purchased at any Wally World Super Liquor Center. When I worked on the campaign to remove the tax we polled it early at 70 plus percent in favor, then came the usual suspects dumping money into the anti-campaign, telling voters if we pass this, all our essential services like police and fire will be devastated. The sales tax on food and medicine (over the counter) is protected by corporate interest that do not want any tax increases put on them to off set what the people of this state need and derserve.

Seven states continue to apply their sales tax fully to food purchased for home consumption without providing any offsetting relief for low- and moderate-income families. They are Alabama, Arkansas, Hawaii, Mississippi, South Carolina, Utah, and West Virginia.

Learn more at this site:
http://www.cbpp.org/1-13-03sfp.htm

Cuttng the food tax is nuts.

Arkys are way too fat as it is. We should be raising that tax, doubling would be a good start.

The additional revenue can be used to subsidize health club memberships