Smart Talk Feb. 10 

And the winner is … Belatedly, we’re pleased to announce the winner of the Arkansas Times Governor’s Photo Contest at the Arkansas State Fair last fall. The picture “Boy on dirt road” by Marianne Vollmer of Ward. She won $75 and a blue ribbon for the shot, chosen from among 79 entries. Avoiding the tax man Arkansas’s state financial woes stem in part from the increasing success of corporations at avoiding paying state income tax. This is a national trend. The Citizens for Tax Justice reported last week that 252 of the country’s largest and most profitable corporations avoided paying state taxes on about two-thirds of their pre-tax profits. In other words, where the state income tax rate was 6 percent, corporations paid an effective tax rate of only 2 percent of their reported profits. The percentage has been dropping steadily. The change has had dramatic impact. According to Citizens for Tax Justice, the share of Arkansas’s gross state revenue produced by corporate taxes dropped from 31 to 24 percent between 1989 and 2003. On average nationally, corporations shouldered 29 percent of the state tax payments. Arkansas-based corporations among the 252 largest reflected the trend in the years 2001-2003. (Dillard’s in 2003 and Alltel in 2002 paid no state income taxes in Arkansas despite millions in profits, according to the report.) The top income tax rate in Arkansas is 7 percent, payable on taxable earnings above $25,000 for individuals. Here’s what our biggest corporations paid as a percentage of profits: Company 3-year profit 3-year tax Ave. tax rate Dillard’s $359 mil. $2 mil. 0.5 percent Alltel $4,592 mil. $91 mil. 2.0 percent Wal-Mart $31,733 mil. $818 mil. 2.6 percent Tyson $1,189 mil. $32 mil. 2.7 percent He sure sounds like he’s running There’s a bit of Bill Clinton in Mike Huckabee. We mean that the governor has a desire and a knack for getting national media attention. And why would you try so hard if you weren’t making future plans? Example: He was interviewed by Brian Lamb for an hour on C-SPAN “during one of my recent visits to Washington,” the governor has announced. The result will show at 7 p.m. Sunday and again at 10 p.m.

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