Tax break for retired military sails through House committee | Arkansas Blog

Thursday, January 26, 2017

Tax break for retired military sails through House committee

Posted By on Thu, Jan 26, 2017 at 2:23 PM

click to enlarge GRIFFIN: Stump-speech state of mind.
  • GRIFFIN: Stump-speech state of mind.

The House Revenue and Tax committee this morning approved a bill to create a tax exemption for military retirement pay. The exemption would also apply to surviving spouses.

The $13 million tax cut is paid for by removing exemptions on unemployment compensation, a tax on digital downloads, and increasing the sales tax on candy and soft drinks. The digital download tax was added this week in place of the removal of a sales tax exemption on mobile homes, which proved politically untenable.

It must be noted that the tax hikes on unemployment compensation and digital downloads weren't actually necessary to pay for the military retirement pay exemption. Those were included as pay-fors for an unrelated tax cut included in the bill's package: a $6.3 million giveaway to the soft drink industry via a reduction in the wholesale-level tax on soft drink syrup. (See more on this below.)

Lt. Gov. Tim Griffin spoke for the bill. His ten-minute yarn sounded like a stump speech for his future run for governor. "Our tax code's a mess from top to bottom," he said. Griffin said that he would like to scrap the entire code and start over. After his speech, he took questions and said that, regarding the pay-fors, "I'm not the governor...most people know that I might do things a little differently."

Rep. Kim Hendren supported the bill but raised the concern that college students and their families would end up being hit by the digital tax when they purchase books and supplies online. He complained that lobbyists for the manufactured housing industry had shifted the burden onto them. Hendren also noted that the legislature had rejected Rep. Warwick Sabin's earned-income tax credit bill, which would have been $10 million cheaper than the low-income tax cut it passed instead.

Rep. Michael John Gray raised a crucial point, noting that the bill has been larded up with another tax cut that has nothing to do with military retirement benefits. Gray asked why the bill also included a $6 million tax cut for the soft drink industry. That tax cut, Gray said, was "riding the coattails" of the more clearly popular and consensus idea of a tax cut for military retirement benefits. No one had a good answer.

Gray noted — a point confirmed by the Department of Finance and Administration — that the tax burden on soft drinks was being shifted onto consumers, while relief was provided for corporate interests in the soft drink industry.

He also noted — again confirmed by DFA — that the some of the pay-fors (tax increases!) really had nothing to do with the cost of the military retirement tax break. The soda and candy tax would pay for that on its own. The additional imposition of new taxes on unemployment benefits and digital downloads, Gray noted, is simply to pay for the giveaway to the soft drink industry.

The bill passed unanimously by a voice vote and will be on to the full House.

Tags: , , , ,

From the ArkTimes store

Favorite

Comments (6)

Showing 1-6 of 6

Add a comment

 
Subscribe to this thread:
Showing 1-6 of 6

Add a comment

More by David Ramsey

Readers also liked…

  • Super Bowl line

    Over to you.
    • Feb 7, 2016
  • Little Rock school activists announce events for 60th anniversary of Central High crisis

    The group is not affiliated with the official "Reflections of Progress" commemoration of the 60th anniversary. However, at least two of the Little Rock Nine may be joining the group for an event at 2:30 p.m. at the state Capitol in the Old Supreme Court Chamber.
    • Sep 14, 2017
  • Judge Griffen: Why black lives matter

    Another few words from Judge Wendell Griffen growing from the controversy over the sale of Black Lives Matter T-shirts at the state black history museum — removed by the administration and restored after protests from Griffen and others stirred by a story in the Arkansas Times:
    • Mar 13, 2016

Most Shared

  • ASU to reap $3.69 million from estate of Jim and Wanda Lee Vaughn

    Arkansas State University announced today plans for spending an expected $3.69 million gift in the final distribution of the estate of Jim and Wanda Lee Vaughn, who died in 2013 and 2015 respectively.
  • Bad health care bill, again

    Wait! Postpone tax reform and everything else for a while longer because the Senate is going to try to repeal and replace the Affordable Care Act one more time before September ends and while it can do it with the votes of only 50 senators.
  • Sex on campus

    Look, the Great Campus Rape Crisis was mainly hype all along. What Vice President Joe Biden described as an epidemic of sexual violence sweeping American college campuses in 2011 was vastly overstated.

Most Recent Comments

Blogroll

 

© 2017 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation