Favorite

Tax breaks for the deserving 

I've credited Gov. Asa Hutchinson for a measure of progressivity in his income tax cut.

The graduated income tax is out of whack in Arkansas because of failure to index it for most of its 40-year run.

So Hutchinson knocked the top brackets down for taxpayers in categories between $21,000 and $75,000. And he proposed initially to take back a 2013 capital gains tax break that primarily benefitted wealthy people. He gave up on part of the capital gains takeback, however, and legislation introduced this week would give it all back, including the total exemption for gains over $10 million.

So, though the super wealthy will be served, one category of taxpayer has been left out — the working poor, those making less than $21,000 a year. Roughly a third of Arkansas taxpayers — maybe 400,000 tax filers — report earned income in that category.

The Times' Benji Hardy asked Hutchinson about the omission of low-income workers at his bill signing ceremony. He responded: "Because this focused on the middle class. Obviously, we have Arkansans that make less than that, and Arkansans that make more than that. This focused on those who have really been extraordinarily strained, and did not have some of the social program protections we have [for low-income people]."

Sen. David Sanders (R-Little Rock), defending the governor further, said the poor had been helped by the private option expansion of Medicaid, an increase in the minimum wage and the federal earned income tax credit.

They are simply wrong, first in asserting people making $75,000 are more "extraordinarily" strained than those making less than $21,000 and then in invoking "social program protections."

Republican faith holds that poor people dine from a buffet of welfare benefits. But let's look.

The earned income tax credit — a federal, not state benefit? A working couple earning about $20,000 a year isn't eligible if they have no children. A single taxpayer earning $8 an hour makes too much to qualify.

The minimum wage, just raised by voters, over opposition from most Republicans to $7.50 an hour? It provided no benefit to anyone making less than $15,600. About 20 percent of Arkansas taxpayers earn between $17,000 and $30,000.

The tax cliffs in Hutchinson's bill also present problems under Arkansas's income tax, which encourages married couples to file separately to double the standard deduction. A married couple — each making $10 an hour for a household income of around $40,000 — realize no benefits from the Hutchinson tax cut, though they are presumably as strained as a single wage-earner making $40,000.

Expanded health insurance? Many of the working poor don't qualify for the private option Medicaid expansion. A family of two's eligibility cuts off at roughly $21,000. There are some discounts on health insurance through the health marketplace for poorer workers, thanks to federally funded Obamacare, not an expenditure of state dollars.

Food stamps? A two-income household is disqualified over $20,000 in gross family income.

In short, there are a number of federally financed programs to help poor people. But all don't qualify for the sometimes meager benefits.

The governor's own chart showed an average tax cut benefit from his bill of $3 for those making $17,000 to $30,000, all to those making more than $21,000. The restoration of the full capital gains tax cut is worth $3.50 for every $1,000 in capital gains (unearned income on sale of appreciated assets).

During the campaign, Hutchinson demonstrated his fear of "welfare" when he resisted opponent Mike Ross' push for universal pre-K education. Hutchinson suggested it smacked of a welfare program, as opposed to a proven way of lifting people out of future poverty.

Hutchinson has a thoughtful side. He should dig into the numbers. He'll find working families exempted from his tax cut with modest to no "welfare" assistance, certainly none paid by the state of Arkansas. He might decide they are "extraordinarily strained," too.

Democrats are backing legislation for the equivalent of a state earned income tax credit for lower income workers. With the governor's support, it might even pass.

Favorite

From the ArkTimes store

Speaking of...

Comments

Subscribe to this thread:

Add a comment

More by Max Brantley

  • Trump launches attack on 'SOBs' of the NFL

    Donald Trump led a rally for Alabama Senate candidate Luther Strange Friday night and the resulting news coverage (if not in our local newspaper) is giving great attention for his rant against the NFL, including but not limited to players who have made political statements by taking a knee during the National Anthem.
    • Sep 23, 2017
  • Driver killed in crash with Maumelle officer

    Maumelle police report the death early this morning of a motorist who crashed head-on with a Maumelle police officer. The officer and two passengers in the other vehicle were injured.
    • Sep 23, 2017
  • Walmart lawyer picked for U.S. attorney in western Arkansas

    Donald Trump has nominated Duane "Dak" Kees,  director of global ethics and compliance at Walmart Stores, to be U.S. attorney for the western district of Arkansas. It has been filled on an interim basis by a career lawyer in the office.
    • Sep 22, 2017
  • More »

Readers also liked…

  • Bootstraps for me, not thee

    Mean spirit, hypocrisy and misinformation abound among the rump minority threatening to wreck state government rather than allow passage of the state Medicaid appropriation if it continues to include the Obamacare-funded expansion of health insurance coverage for working poor.
    • Apr 14, 2016
  • Trump: The Obama of 2016?

    Conner Eldridge, the Democratic challenger to incumbent Republican U.S. Sen. John Boozman, launched an assault on Boozman Monday morning rich with irony and opportunity.
    • May 5, 2016
  • Double-talk

    A couple of instances of doublespeak cropped up in Little Rock over the weekend.
    • Jun 29, 2017

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.
  • The inadequate legacy of Brown

    LRSD continues to abdicate its responsibility to educate poor black students.

Latest in Max Brantley

  • Aid politics

    The still-unfolding catastrophe in Houston is, first, a human tragedy. But when politicians try to tell you that a time of enormous human tragedy is not a time to talk about politics, it likely means the politics are embarrassing to them.
    • Aug 31, 2017
  • Save the statues!

    The Democratic Party of Arkansas has called for relocation of Confederate monuments from public places, such as courthouse squares and the Capitol lawn, to history museums or private grounds.
    • Aug 24, 2017
  • Charter secret

    These are hard times for those who believe in traditional public schools, run by democratically elected representatives, open to all on equal terms.
    • Aug 17, 2017
  • More »

Event Calendar

« »

September

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

Most Recent Comments

  • Re: Sex on campus

    • Once again commentators blame the victim. Social scientists, of whom I am one, regularly find…

    • on September 22, 2017
  • Re: Time for a coalition

    • Shiny, nobody is saying that Hillary isn't entitled to speak. Shit, the more she talks,…

    • on September 21, 2017
  • Re: Bad health care bill, again

    • Its hard to tell what the GOP in Arkansas care about beyond making life worse…

    • on September 20, 2017
 

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