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

Speaking of...

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…

  • State Police issues statement on Jason Rapert 'threats'

    The State Police have issued a minor clarification in what appears to be an effort to soothe an enraged Sen. Jason Rapert, exposed here as overly excited about both a Conway parking lot question from a constituent as well as some inflammatory Internet rhetoric that he's interpreted as a dire threat on his life. State cops took his reports seriously, they say. But in the end, they found nothing actionable.
    • Sep 15, 2015
  • Your daily dose of Jason Rapert

    Sen. Jason Rapert really, really didn't like it when a KATV reporter asked him about the hypocrisy of his political arguments.
    • Feb 4, 2017
  • Transgender electrician may sue employer over her firing

    Federal Judge Susan Webber Wright has ruled that Patricia Dawson, a transgender woman, may pursue her lawsuit that she was wrongfully fired by her employer, H & H Electric, because of her sex.
    • Sep 16, 2015

Most Shared

  • Former state board of education chair Sam Ledbetter weighs in on Little Rock millage vote

    Ledbetter, the former state Board of Education chair who cast the decisive vote in 2015 to take over the LRSD, writes that Education Commissioner Johnny Key "has shown time and again that he is out of touch with our community and the needs of the district." However, Ledbetter supports the May 9 vote as a positive for the district's students and staff.

Visit Arkansas

Haralson, Smith named to Arkansas Tourism Hall of Fame

Haralson, Smith named to Arkansas Tourism Hall of Fame

Chuck Haralson and Ken Smith were inducted into the Arkansas Tourism Hall of Fame during the 43rd annual Governor’s Conference on Tourism

Most Viewed

  • Griffen asks probe of Ark. Supreme Court and AG's office conduct

    At a press conference today at the Doubletree Hotel just across from the Pulaski County Courthouse, Pulaski County Fifth Circuit Judge Wendell Griffen and his attorneys announced that he has asked the Arkansas Judicial Discipline and Disability Commission to investigate the conduct of the entire Arkansas Supreme Court, and asked the director of the Arkansas Committee on Professional Conduct to investigate the conduct of Attorney General Leslie Rutledge and several others in the AG's office, related to what Griffen and his attorneys claim were forbidden ex parte conversations between the Supreme Court and the AG's office.

Most Recent Comments

Blogroll

Slideshows

 

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