Favorite

Bud Canada's quest 

Bud Canada can now die happy. Whatever else happens as a result of the election, the state sales tax on groceries, which Canada spent a long state Senate career trying to repeal, will begin to perish this winter.

The question is, will the Arkansas tax system, one of the harshest in the country, be fairer? The answer is some but not much.

Every time that the legislature passed another sales tax exemption for one industry or another — on livestock and chicken feed, for example — Canada arose to note the perverse irony of taxing food off poor people’s tables while rushing to enrich special interests by removing a little tax from their accounts.

But Mike Beebe, who had helped Canada pass his grocery exemption in the Senate, ran for governor on that issue. So did Asa Hutchinson, though belatedly. And so did Jim Lendall, the Green Party candidate, who had the better claim on the issue. Grocery tax repeal was, like Canada’s, his signature issue when he was a representative.

Gov. Mike Huckabee also weighed in against Beebe on the issue, suggesting that Beebe was faithless on repealing the tax because he was a leader of the legislature and didn’t get it done. But Huckabee was the faithless one. He publicly said he was opposed to the tax but when big grocers let his office know that they liked the tax, he quietly bailed. (Big retailers bank and collect interest on sales tax receipts, which are not remitted to the state until the next month, and they keep permanently a portion of the taxes as a commission for collecting them. They’ll be lobbying again in January to keep the tax.)

But the point is, although it has been a cause of progressives for 40 years, how unfair is the tax? Arkansas is one of only three states that impose the full tax rate on groceries.

It is the sales tax, not simply its application to groceries, that is regressive, especially since Arkansas now imposes a higher rate than most other states and exempts so many industrial purchases. The grocery tax is not quite as punitive as it once was because the very poor usually do not pay it except on snacks. The very poor who receive food stamps (roughly 300,000 Arkansans) do not pay the sales tax on those groceries and the tax is not collected on food bought under other government nutrition programs such as the Women, Infants and Children program or food programs for seniors.

Taxing groceries is not inherently unfair. Why is it so unfair to make Don Tyson or Jim Walton pay a tax when they buy a slab of porterhouse or for that matter taxing the food purchases of an old guy living on Social Security and free-lance earnings? They do not feel it.

The sales tax is regressive because low-income people pay it on virtually everything they buy and thus pay a much higher share of their income in taxes than do the wealthy. The poor do not have extra disposable income that they can spend on untaxed services or on investments. They don’t play golf or spend on commercial entertainment. It matters little which merchant they pay the taxes to — it’s the cumulative total of the taxes every week that hurts.

And where do the poor gain if they do not have to pay taxes on groceries but pay elsewhere with a higher sales tax rate or through the loss of government services like health care when the state has to cut back?

Here would be a better solution, which would preserve the revenue base: Provide a refundable income tax credit for the calculated amount of grocery taxes paid by families below a certain income ceiling. Gov. Bill Clinton promised the AFL-CIO in 1983 that he would do that in exchange for labor’s not opposing his sales tax increase, but Clinton welshed on the deal. Bill Becker, the union chief, never spoke to him again.

It would be hard to administer, state tax administrators say, and people would not like it because they would have to fill out a form to get the rebate. They would like it, just not as much. Another suggestion, by Arkansas Advocates for Children and Families: a state earned income tax credit like the federal’s, which would reimburse the poor for the grocery taxes and more.

That won’t happen, so the repeal of the grocery tax for the Waltons and all the rest of us is the next best thing. It’s supposed to be doable now because government revenues are running well ahead of spending and the state can do it without cutting services. That situation will not last long, and the state, and the poor, will miss the money from the lost tax.

And here is a partial solution to that: Raise the severance tax on natural gas (the Arkansas tax rate is by far the lowest in the world) before the exploration companies get their drill bits into the Fayetteville shale. Now, that is a fair tax and a moral debt to generations who will lose a finite resource that belongs to everyone. Gov. Beebe?


Favorite

From the ArkTimes store

Comments

Showing 1-1 of 1

Add a comment

 
Subscribe to this thread:
Showing 1-1 of 1

Add a comment

More by Max Brantley

More by Ernest Dumas

  • Trusting

    It is a Fourth of July ritual to appraise where we are in meeting the Declaration of Independence's promise to institute a government that would, unlike King George, secure human rights equally for everyone who sets foot on American soil.
    • Jul 6, 2017
  • Obamascare

    Republicans at long last may be about to see their most fervent wishes and wildest predictions materialize — millions of people losing their medical and hospital coverage, unaffordable insurance, lost jobs, a Medicare financial crisis, mushrooming federal budget deficits and fiscal crises across state governments.
    • Jun 22, 2017
  • Ethics upended

    Every week, Donald Trump finds another way to upend conventional ethics in government and politics. Here's one that has been in the making since the campaign but is reaching maturity in the Russian investigation: He is turning the heroes of government scandals into the villains.
    • Jun 15, 2017
  • More »

Readers also liked…

  • AEC dumps ALEC

    No matter which side of the battle over global warming you're on, that was blockbuster news last week. No, not the signing of the climate-change treaty that commits all of Earth's 195 nations to lowering their greenhouse-gas emissions and slowing the heating of the planet, but American Electric Power's announcement that it would no longer underwrite efforts to block renewable energy or federal smokestack controls in the United States.
    • Dec 17, 2015
  • No tax help for Trump

    The big conundrum is supposed to be why Donald Trump does so well among white working-class people, particularly men, who do not have a college education.
    • Aug 11, 2016
  • Dollars and degrees

    Governor Hutchinson says a high graduation rate (ours is about the lowest) and a larger quotient of college graduates in the population are critical to economic development. Every few months there is another, but old, key to unlocking growth.
    • Aug 25, 2016

Most Shared

  • So much for a school settlement in Pulaski County

    The Arkansas Democrat-Gazette's Cynthia Howell got the scoop on what appears to be coming upheaval in the Pulaski County School District along with the likely end of any chance of a speedy resolution of school desegregation issues in Pulaski County.
  • Riverfest calls it quits

    The board of directors of Riverfest, Arkansas's largest and longest running music festival, announced today that the festival will no longer be held. Riverfest celebrated itsĀ 40th anniversary in June. A press release blamed competition from other festivals and the rising cost of performers fees for the decision.
  • Football for UA Little Rock

    Andrew Rogerson, the new chancellor at UA Little Rock, has decided to study the cost of starting a major college football team on campus (plus a marching band). Technically, it would be a revival of football, dropped more than 60 years ago when the school was a junior college.
  • Turn to baseball

    When the world threatens to get you down, there is always baseball — an absorbing refuge, an alternate reality entirely unto itself.

Latest in Ernest Dumas

  • The ACA can be fixed

    Majority Leader Mitch McConnell threatened his 51 disciples in the Senate and his party with the gravest injury imaginable.
    • Jul 13, 2017
  • Trusting

    It is a Fourth of July ritual to appraise where we are in meeting the Declaration of Independence's promise to institute a government that would, unlike King George, secure human rights equally for everyone who sets foot on American soil.
    • Jul 6, 2017
  • Obamascare

    Republicans at long last may be about to see their most fervent wishes and wildest predictions materialize — millions of people losing their medical and hospital coverage, unaffordable insurance, lost jobs, a Medicare financial crisis, mushrooming federal budget deficits and fiscal crises across state governments.
    • Jun 22, 2017
  • More »

Event Calendar

« »

July

S M T W T F S
  1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31  

Most Viewed

  • Another Jesus

    If you follow the logic of Jason Rapert and his supporters, God is very pleased so many have donated money to rebuild a giant stone slab with some rules on it. A few minutes on Rapert's Facebook page (if he hasn't blocked you yet) also shows his supporters believe that Jesus wants us to lock up more people in prison, close our borders to those in need and let poor Americans fend for themselves for food and health care.
  • Pay attention

    If anyone thinks that a crisis with the Power Ultra Lounge shooting, then he hasn't been paying attention to Little Rock.

Most Recent Comments

  • Re: Pay attention

    • I have attended community meetings about the recent spike in violence in LR, and police…

    • on July 22, 2017
  • Re: Pay attention

    • Adawson's comments attribute the plight of black people in the United States to the War…

    • on July 22, 2017
  • Re: Pay attention

    • Heather Wilson, blacks have NOT been prevented from pursuing the skilled trades as a result…

    • on July 22, 2017
 

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