— Jim Hendren (@JimHendren1) February 4, 2019
The windfall income tax cut for the wealthy — a 14 percent cut in the top marginal tax rate in two years that will give 70 percent of the benefits to the top 1 percent of taxpayers — zipped out of Senate committee today.
Co-sponsor Rep. Joe Jett, now a Republican, once called himself an FDR Democrat.
Unless the state falls into recession and the growing income of millionaires takes a hit, this tax cut will cost the state more than $150 million a year, an independent analysis has found. It will produce virtually no tax savings for anyone making less than $80,000 a year (and not much even for them). But if you make more than $205,000, you are among the 5 percent that will reap 90 percent of the windfall.
Remember not to be misled by that 1 percent drop in the top marginal tax rate for 2020.
In short, say you are a Walton heir and had taxable income of $2,080,000. The difference between your tax this year and the tax when this is fully implemented is about 14 percent less — $138,000 on $2 million before and $118,000 after, a savings of $20,000.
That person making $80,000 will knock down about $250, or 70 cents a day in tax savings.
The idea is to get this thing passed fast before too many people pull out a calculator.
This tax cut for the richest 1 percent equals the cumulative tax cut for 90 percent, or 1 million Arkansas tax filers, in two earlier tax-cutting initiatives. The average benefit in tax cutting poorer v. richest — 40 cents to $ 8,000.