Our View

Our View

Reduce the tax burden on our state’s working taxpayers

Most Arkansans remember well when former Democrat Gov. Mike Beebe pushed legislation cutting the sales tax on groceries and current Gov. Asa Hutchinson’s promise to reduce the state income tax but, many of us are unaware of the long overdue need for comprehensive tax reform.

Oh sure, we’ve experienced isolated changes to the state’s tax code but, the fact of the matter is that Arkansas has not taken a broad approach to tax reform since 1971.

Let’s also take into consideration the taxes Arkansans pay to their cities and counties. For example, how many people actually look at their sales receipts after checking out at Walmart or at McDonald’s, Burger King or any local business? Shoppers at slapped not only with a state sales tax but also a city and county tax, plus when visiting a local restaurant or booking a room at a local hotel there is a hefty tax, dubbed a “Hamburger Tax.”

And then there are the fees and service charges applied to local utilities such as cable, electricity and gas.

Let us point out that Arkansas has the 14th highest individual income tax in the entire nation, the 24th highest corporate income tax in the nation and the third highest combined state and local sales taxes in the nation, according to a report by the Washington, D.C.-based Tax Foundation and the Arkansas Center for Research in Economics at the University of Central Arkansas.

While it is accurate to point out that Arkansas’ property taxes are among the lowest in the nation, the overall tax burden when considering every tax, Arkansas is the 17th highest, according to the report.

How many Arkansans realize that 10.1 percent of personal income in Arkansas goes to state and local taxes, compared to the national average of 9.9 percent?

So, with all this said just exactly what are some of the recommendations being made to Arkansas lawmakers for serious consideration during the upcoming session of the Legislature in January?

How about repealing the current individual and corporate income tax rate schedules and institute a simple flat tax rate of 4.95, or expand the sales tax base to include items such as newspapers, coin-operated car washes, durable medical equipment, personal transportation services, gasoline, self-storage, prescription drugs and membership fees for private clubs.

What about eliminating the state’s inventory and franchise taxes and imposing a temporary moratorium on local sales tax elections?

There is a big difference between what should be done about taxes and what our politicians will actually embrace. We all know the liberal politicians in Little Rock will be the least enthusiastic about cutting taxes on the working class when their primary priorities are funding government subsidies to their voting poor constituents, funding their self-serving projects, more taxes to fund free or subsidized health care, funding the enormous billion budget that feeds the state’s Department of Human Services and, as always, more taxes to the state’s public schools.

Those politicians will strongly argue that giving the taxpayers a break in their income taxes will only jeopardize these essential government services that their constituents expect.

Our advice is to watch how the politicians actually vote on any tax cut proposal, listen to their arguments and figure out just how interested they really are in helping reduce the tax burden on the state’s working taxpayers.