I wrote two days ago that Attorney General Dustin McDaniel had, however correct his decision to give up his free state car, blown additional life into a story that otherwise might have run its course.
So today he and Lt. Gov. Bill Halter are bickering in the daily newspaper about the freebie, which is given to state constitutional officers. Insult of insults, McDaniel finds Gov. Mike Beebe has thrown in with Halter on the legal interpretation. Beebe and Halter are wrong, by the way. (Though not about the part about paying taxes.)
It's real simple: By clear and incontrovertible precedent all over the country (ask NLR Mayor Pat Hays, who went down this road in his city a few years back), the federal taxing authority considers the provision of a government-supplied auto as federal taxable income. The state of Arkansas incorporates federal tax law as the guide for what it taxes as income. Cars are income. That's why Beebe, as attorney general, and Halter, as lieutenant governor, thought the prudent course was to declare the benefit and pay taxes on it.
Beebe and Halter claim that while they acknowledge cars as income under federal and state tax law, it is somehow not income in the sense of the Arkansas constitutional limitation on income for the seven statewide officers. This is an argument they wouldn't want to be forced to defend in court. That's what McDaniel decided in giving up his car. (It's too bad the state auditor, who prepares pay checks and also receives a state car, didn't do what other government authorities do and see to it that these cars are declared as income as they are supposed to be.)
Right as he his on this, McDaniel blundered politically. His dig at Halter personalized a strictly legal question raised by the Arkansas Democrat-Gazette 's reporting. It gave continued front-page play to the issue. And, somehow or another, he's coming out of it as the opportunistic heavy for GIVING UP a state perk. Not a good week at the office.
McDaniel has opened a relevant issue for discussion. Is the state — and cities and counties and other public entities — properly declaring as income all the vehicles given to the untold number of public employees who are able to take cars home and use them for personal as well as work purposes? When The Times of North Little Rock reviewed this issue, it found 10 city employees dodging the tax man, a situation the mayor corrected.