I was afraid of this.
Steve Brawner writes of resistance in the House to Gov. Asa Hutchinson‘s proposal to repeal a cut in the capital gains tax. Republicans want to preserve the cut, which goes mostly to the wealthiest taxpayers. House Democrats also are reluctant to approve the tax legislation without first seeing the governor’s budget outline.
Sadly, nobody — Republican or Democrat — seems to be complaining that Hutchinson’s income tax bill provides nothing for 40 percent of Arkansas’s taxpayers, its poorest wage earners. Instead, the cut goes to those making $21,000 to $75,000. Those making less get nothing.
Hutchinson knows what his budget says and what tax increases he needs to cover the tax cut and other spending plans. So he proposed a repeal of the 2013 capital gains cut, including the total tax exemption given people getting $10 million in up and capital gains. That freed up $20 million overall a year.
That $10 million capital gains exemption already is in effect. A further cut in the capital gains tax rate — from a 30 percent to a 50 percent discount on the normal tax rate — is supposed to take effect this year. There’s talk of a compromise making it a 40 percent discount, which would mean a loss of almost $10 million a year. Hutchinson would have to make it up somewhere with further spending cuts, which tend to fall more heavily on the lower income than higher income.
So far, no comment from the governor on the House’s recalcitrance.