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It never takes Gov. Asa Hutchinson very long to respond to "taxing" issues in Arkansas.

And usually his response is in a very negative way.

This past week, a new report was floated saying Arkansas should adopt a combined corporate income tax reporting requirement after tax legislation passed this last year will cut corporate taxes to benefit wealthy individuals while raising internet sales taxes for those with lower incomes.

Hutchinson firmly and loudly basically said, "No."

He also in the media defended the state's finally collecting internet sales taxes was "not to just collect more taxes," but the state did so for "fairness" to all brick and mortar merchants in the state.

The new report, calling for a combined formula to collect taxes was produced and promoted by the Arkansas Advocates for Children & Families, which supports increased government spending on social programs.

The report, released last week was written by Bruno Showers, a senior policy analyst. The report which can be found on the AACF websites, is "Corporate Income Tax Cuts: The Need for Combined Reporting."

The report comes after the legislature this past session approved Act 822, which required remote sellers to remit sales taxes on online purchases and reduced the top corporate tax rate from 6.5% to 6.2% in 2021 and to 5.9% in 2022.

The report and a continuing complaint of the AACF says lower-income families pay a higher percentage of their income in sales taxes, so the internet tax will hit them harder.

This was a criticism of Act 822 when the debate raged on the tax during the session, but still chamber of commerce groups and others in Arkansas promoted the internet tax to help the drain from locally based businesses in the state.

Meanwhile, the AAFC reports say corporate income taxes generally have benefited the wealthy.

And therein comes the rub against the known taxing procedures of the Hutchinson policy.

Most of the tax relief during the administration's first and now in its second four-year term have been to benefit the rich and the businesses in the state -- as the administration says to allow the growth of Arkansas' businesses.

Others on both sides of the political aisle have not totally bought into these types of voodoo economics touted by Hutchinson and his tax policy henchmen.

In the AAFC report, for instance, citing the national Institute on Taxation and Economic Policy, found the new changes in the Arkansas tax code, along with a 3-cent gasoline and 6-cent diesel tax increase, will result in tax increases for all but the top 5% of earners.

Stop and let that sink in... tax increases for all but the top 5 percent of earners.

And meanwhile, 70% of the corporate tax cut given by the Arkansas legislature will benefit the top 5% of wage earners making more than $205,000 a year, and 81% will go to out-of-state shareholders -- not in-state Arkansans.

Basically, the AAFC report says a "combined reporting system" treats business and its subsidiaries as a unitary (or one) business. The report says such a system is fairer to smaller, in-state businesses.

In the report, Showers writes: "Combined reporting would help plug the hole left in our state budget and ensure that large multi-state corporations pay their fair share."

It comes down to a regional approach to taxation and reporting of taxes collected. Some 27 states plus Washington, D.C., have combined reporting systems. Among Arkansas' neighbors, only Texas has a combined system. Other nearby states with a combined system include Kansas, Illinois and Kentucky.

But no other states in the South have combined systems.

And there you have it, that old political saw: Good for Alabama, good for Arkansas.

The poor get poorer and the rich... well, you get it... and if you don't they only get richer under tax cuts for the high earners.

-- Maylon Rice is a former journalist who worked for several northwest Arkansas publications. He can be reached via email at maylontrice@yahoo.com. The opinions expressed are those of the author.

Editorial on 10/30/2019

Print Headline: New tax report draws 'No' from Gov. Hutchinson

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