Sen. Joyce Elliott Tweets from the legislative tax “reform” task force that it has rejected consideration of an earned income tax credit for lower-paid workers and endorsed an income tax cut only for taxpayers in the top tax bracket.
The proposal reduces the top income tax rate from 6.9 to 6 percent for those making more than $80,000 a year (which could mean a two-income family making $160,000 and filing separately on
That’s a 13 percent reduction in the top rate and it will be a gigantic windfall for the truly wealthy. It will reduce overall revenue by $180 million, according to one of the governor’s estimates, (with scant economic benefit relative to the cut, according to testimony yesterday.)
As I’ve mentioned before, the state once would supply data on income taxes paid by income brackets. I’ve been unable to get updated figures in the Hutchinson administration to better illustrate the impact of such a tax cut.
But the most recent data, from 2013, gives you an idea of the impact.
That year, there were 660 taxpayers reporting more than $1 million in income, with a cumulative tax bill on that income of $170 million. This proposed tax break that year would have saved them something like $20 million, or $30,000 per taxpayer. Everybody else would hope for some trickle down.
PS: In that year, about 60,000 of the state’s 1.1 million tax filers reported more than $80,000 income. More recent data shows 1.5 million tax filers, but I don’t have a number on those making more than $80,000.
UPDATE: Many other variations are getting favorable votes today, with emphasis on tax breaks, whether in personal income tax, corporate income tax, tax breaks for LLCs and other