From Arkansas Business, an AP report on Gov. Asa Hutchinson’s $100 million income tax cut bill, which Senate President Jonathan Dismang said he hopes to start moving next week.

Here’s the legislation, as outlined in an amendment

The cuts are aimed primarily at taxpayers earning in middle income brackets, from $21,000 to $75,000 taxable income, roughly by a point, from 6 to 5 percent between $21,000 and $35,100 and from 7 to 6 percent between $35,100 and $75,000.

I’m seeking some clarification because the Dismang amendment makes some small changes in the size of brackets — for example expanding the amount covered by the lowest .9 percent tax rate from $4,099 to $4,299. It also allows some bracket adjustments that would seem to provide some additional small tax cuts to people making between $75,000 and $80,000, higher than discussed previously. But it also appears to delay a .1 percent tax cut planned by Collins for tax year 2015, this year, for people making more than $21,000.

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The plan still contains the “bracket cliffs” anticipated by Hutchinson. For example: If you make less than $75,000, your top tax rate is 6 percent of the amount over $35,000. But if you make $75,001, your top tax rate is 6.9 percent of everything over $35,000. This makes the cost of the cut less than it would be of it was a pure sliding scale based on income. The new bracket adjustments help offset that between $75,000 and $80,000, but provide nothing for the $21,000 cliff.

Bottom line on cost: Haven’t seen a revenue report yet.

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The big part of the tax cut, in the brackets for $21,00 to $35,099 and from $35,100 to $75,000 don’t take effect until the tax year beginning Jan. 1, 2016.

More details here from John Lyon, who puts the cost of the cut at $33.7 million in fiscal 2016 and $102 million the following year.

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UPDATE: I talked with Rep. Charlie Collins, who sponsored 2013’s income tax reduction. He confirms that it delays a part of his tax cut planned for 2015 at the top bracket. It remains at 7 percent above $34,000, where Collins would have reduced it to 6.9 percent — more of a savings for the rich than the poor, obviously. But he also notes it produces dramatically greater cuts in 2016 for middle income people and the totality of the financial picture is his main concern — both tax cuts and revenue needs.

He said he doesn’t know enough about the “complete picture” yet to say he’s totally in agreement with the legislation as Dismang has written it. Certain things, he’s “excited about.” Others might need a tweak. But he emphasized his happiness with the general direction of the tax cut talk and was confident the revenue forecast could sustain it. Collins noted that Dismang’s bill is more complicated than his single bracket approach to income tax, with three sets of incremental brackets depending on income.

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Gov. Hutchinson later issued a statement lauding the bill and papering over some mild exceptions noted by me and Collins: His tax cut the first year will be less than what Collins’ bill  would have produced. He postpones a tax decrease for taxpayers in the top bracket, above $75,000. He does something about the “tax cliff’ at $75,000. He does nothing about the similar cliff at $34,000.  

This delay in a tax cut costs $48 million in reductions THIS YEAR. I happen to think that’s a good idea. It’s funny because Republicans typically call delays of tax cuts a tax “increase.” The Democrat-Gazette normally follows suit. Here, I bet, they’ll like Hutchinson’s prudence. Here’s what he said:

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The Governor’s tax plan achieves his campaign promise of providing tax relief to middle income  taxpayers making between $21,0001 and $75,000 annually by reducing the rate from 7% to 6% for those making $35,100 and above and from 6% to 5% for those making between $21,000 and $35,099. The governor’s tax plan will go into effect 2016 as promised.

In addition, beginning tax year 2015, taxpayers having taxable income of less than $21,000 will have tax rates reduced by one-tenth of 1% on all income between $4,300 and $20,999. The plan thus retains the reduced tax rates previously enacted by Act 1459 of 2013 for those low-income taxpayers making less than $21,000.

Beginning tax year 2016, taxpayers having taxable income in excess of $75,000 will pay tax on that portion of their income of $35,100 and above at the rate of 6.9%. The Governor’s plan incorporates portions of the tax relief previously provided by Act 1459 for those taxpayers making more than $75,000 by retaining the top tax rate of 6.9%.

For taxpayers having incomes of more than $75,000 but not more than $80,000, the Governor’s plan provides a bracket adjustment of between $40 and $440. This bracket adjustment prevents a small amount of income above $75,000 from resulting in a significantly higher income tax liability. (This is to avoid what is called the Cliff Effect.)

The tax reductions in the Governor’s plan reduce state general revenues by $2M in FY15. For FY16 the original tax reduction from the Governor’s Plan is approximately $50M. This reduction is partly offset by a delay of portions of Act 1459 of 2013, resulting in a net cost of $33.7M for FY16. In summary, the tax plan will reduce state general revenues by $2M in FY15, $33.7M in FY16 and $102.1M in FY17.

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