Numbers don’t lie. Check out the latest analysis by Arkansas Advocates for Children and Families on winners and losers under Gov. Asa Hutchinson‘s plan to cut income taxes by more than $200 million over four years, primarily by a whopping reduction of 15 percent in the top marginal tax rate, from 6.9 to 5.9 percent.
the size of the average tax cut would vary tremendously. Including those who wouldn’t receive any tax cut, the average tax cut for the bottom 20 percent of taxpayers would be just $5. The middle 20 percent of taxpayers — those with income between $36,000 and $55,000 — would receive an average tax cut of $52. The top 1 percent would receive an average tax cut of $8,128.
And that ain’t all:
There also would be big differences in how the tax-cut pie gets divided up. As a group, Arkansas’s poorest taxpayers would see few of the benefits. The lowest 20 percent of taxpayers would receive just 1 percent of the total tax-cut pie, and middle-income taxpayers would see 7 percent of the benefits. Most of the benefits under the Governor’s proposal would go to those at the top. The top 5 percent of Arkansas taxpayers (those with incomes over $199,000) would receive 65 percent of the benefits from the total tax cut. The top 1 percent alone would receive nearly half (46 percent) of the total tax cut pie.
Not to worry. The rich will trickle benefits upon the poor. Or so the theory goes.
But ….. there’s a “double whammy” in the tax cut.
The tax cut will eventually result in the loss of nearly $200 million in tax revenue that could be used to pay for the many (and growing) unmet needs in our state budget. This means less money in the state budget for critical programs that could help our children and families thrive and succeed. It also means less money for the investments that would grow our state’s economy and help ensure that all children and families, not just those at the top, sow the benefits of Arkansas’s economic growth.