Missed opportunity

No income tax better than cut income tax

When government gets around to cutting taxes, it’s a little chancy to criticize. After all, the bureaucracy might rather take its ball and go home, leaving taxes right where they are—until the next increase. So from this quarter at least, two cheers for the task force that’s recommending state tax cuts. The people of Arkansas will be the big winners.

But we do see a missed opportunity in the latest recommendations.

The governor’s task force has laid out its plan now, and there are a lot of good ideas there. Lowering income taxes, the number of tax tables, etc., will make Arkansas a more attractive state to do business. But we still would have liked to have had a more interested, and debated, look at a temporary moratorium on income taxes.

What Arkansas really needs to do with its income tax rates is promote economic growth. We have tough competition with border states like Texas and Tennessee—which have no state income taxes. Reducing the Arkansas income tax for everyone by a marginal amount is going to have only marginal results. Arkansas needs something bolder, something unique, something that really spurs economic development.

Arkansas could have made national news—and still could—with this idea to grant a moratorium on any income taxes for five years to any new state resident. In other words, those moving to Arkansas would not pay any state income taxes until after their fifth year in the state. This would put Arkansas on a very competitive basis with other states for new residents—and not just border states. Imagine somebody in New Jersey or Vermont looking for a four-season state, and hearing that Arkansas would grant them five years with no income taxes to pay.

Since these people are not living or paying taxes here now, granting this exemption shouldn’t cost Arkansas anything. In addition, most retirees would move here with their savings accounts and open new deposits in local banks that could then loan money to stimulate even more economic growth.

Are there any other states that offer a temporary moratorium on income taxes? If so, we’re not aware of them. Arkansas would have a unique program to try to boost economic development for the entire state, benefiting low income, middle income and, in fact, all Arkansans.

It was disappointing the task force didn’t seem to take this idea seriously. The members could have asked the Department of Finance and Administration to at least give taxpayers a cost estimate on such a plan, or better yet, the cost if it had become law five years ago. That would be verifiable, documented information that We the People could have used. If not tomorrow, then during the next legislative session.

There’s no shame in singles and walks, and the occasional double down the line. But every once in a while, you gotta swing for the fences.

A temporary moratorium on income taxes would have been a home run, and national news. Maybe we’ll just have to take the Kansas City Royals’ motto of late: We’ll get ’em next year.

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