By the time this missive gets into ink and printed on the newsprint page you hold in front of you, Gentle Readers, the planned 2, 4, 5.9 tax plan conceived by Gov. Asa Hutchinson and staff, will likely be implemented.
Reading tax tables and forecasting rates, is sort of like Arkansas weather. Give it a day or two (in the case of state income taxes, a Legislative Session or two) and change will come.
But in the meantime.... that is just what Gov. Hutchinson and his new 5.9 tax plan is intended to accomplish.
In the meantime, when his pen crosses the signed legislation (and I predict it will be signed almost immediately after its passage) the inked page means that Arkansas Personal Income Tax Rate goes from the highest in the region to one acceptable as the rest of the states. This is (wink, wink, to Oklahoma in particular) as other states look at raising their tax rates -- rather than following the lead of Arkansas to lower their personal income tax rates.
Now I know, this is really boring stuff.
All tax related matters, setting the rates, calculating the income tables, filling out the forms and then the dreaded making out the check or anticipating the refund -- is pretty dry stuff, most of us sooner (get it) not deal with.
I ask you one simple question.
How would you really know you got a tax break?
Can one really tell a difference in a 6.0 rate and a 5.9 tax rate on taxable income?
Does it equate into more money in your hand over the course of a year?
Or does this tax-cut gesture, simply siphon off $97 million in needed tax monies for state agencies and services.
You are able to tell if your car license tag fees goes up $2. Or if your driver's license renewal -- even for those new beige hologram licenses with a longer period of renewal time -- are offered for $40.
Didn't the standard Arkansas Driver's license used to be $12?
Huh.
Think about that as you dwell on the difference in a 6.0 and a 5.9 state income tax rate.
I get it. The Governor says you put these rates on U.S. map and it makes the state look bad. Oklahoma's tax rate is less. So is Tennessee's. And don't even start with Texas -- which has NO personal state income taxes.
We got to get this rate down and make it look like Arkansans are tax 'friendly' rather than tax hungry, he says.
Will this move generate more industrial growth? The governor says so. His supporters believe him. And that work of the interim Tax Committee has been long and difficult to get to the 28-5 vote in the Senate, which is just beyond the three-fourths vote needed to send the package to the State House of Representatives.
Can it gather in the needed votes in the House?
The narrow, but victorious, Senate vote was what Asa needed to see.
As in all his important legislative matters, our governor, wants an early victory on his plans and desires. Then he leaves the minutia of legislation to the solons themselves.
Three Democrats joined the 25 Republican state Senators in the 35-member upper chamber to carry the victory for the Governor. The trio of Democrats used some leverage about the governor's second most desire -- increased financial support of highways -- as their rationale.
And everyone knows, Good Roads are needed if 'they are to come.'
Arkansas' legislature has set the new state income tax rates to show (1) the wealthy and tax conservatives that Gov. Hutchinson is their friend (2) that the state now has a lower personal income tax rate than Oklahoma and (3) that we will draw in more industry.
Will the state House follow the state Senate's lead?
There may be a "dust-up" or two but conventional wisdom in the 92nd General Assembly says Yes.
It is rare, you see, for the 100-member House to derail a train coming from the Upper Chamber.
But that, like Arkansas' new tax rate, is just a perception.
Not necessarily the truth.
-- Maylon Rice is a former journalist who worked for several northwest Arkansas publications. He can be reached via email at [email protected]. The opinions expressed are those of the author.
Editorial on 02/13/2019