ARKANSAS, USA — On Thursday, March 30, Arkansas Gov. Sarah Huckabee Sanders and legislative leaders called for cutting income taxes by $124 million as they near the end of this year's legislative session.
Senate Bill 549 started in a senate committee, but quickly moved to the house.
“Arkansans will feel this tax relief immediately, and I don't think it could come fast enough,” Gov. Sanders said at a news conference at the state capitol.
"I'm concerned about it," said Senior Policy Analyst for Arkansas Advocates for Children and Families Bruno Showers.
Showers says his group reached out to the Institute on Taxation and Economic Policy to model what the tax cut would mean for Arkansas:
"They estimate that 80% of the dollars of this tax cut would go to the top 20% of Arkansans," Showers said, "That's people making $110,000 annually or more."
"It drops the top rate from 4.9% to 4.7% at the beginning of this calendar year, Jan. 1, 2023," said Senator Jonathan Dismang (R) District 18.
The bill would also drop the top corporate income tax rate from 5.3% to 5.1%.
Last session, former Arkansas Governor Asa Hutchinson signed off on the state's largest state income tax reduction bill.
Showers says Hutchinson's bill is something only the rich will benefit from, and that this new bill will be a repeat. "We have this upside-down tax system that's asking for more from those who have less."
"Instead of another round of tax cuts that mostly appeal to the already well-off, that revenue can address some of those long-standing issues in our state," Showers said. "So, that's why we oppose this legislation."
The bill’s lead sponsor, Senator Jonathan Dismang, says this bill will help Arkansans. "All taxpayers that make above $24,300 will benefit."
State finance officials say 1.1 million taxpayers will be a part of this tax cut.
"The high rates of inflation that we're dealing with mostly hit the 400,000 Arkansans that are left out of this tax cut," said Showers.
The push for further tax cuts comes after Arkansas ended last fiscal year with a $1.6 billion surplus.
"We had some issues with various industries that have either complicated leaving or have not settled in Arkansas for what we have on throwback," Senator Dismang said.
The "throwback rule." is a statute that states can adopt and use to ensure corporations pay their state taxes on 100% of their profits.
Senate Bill 549 is now in the house and it should be discussed this week, as the legislative session ends later this month.
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