Rep. Ed Garner (who complains about taxes but frequently has failed to pay amounts legally owed in his own business) is set to attempt to pass his bill this afternoon ending capital gains taxes on Arkansas assets.
Recipients of state revenue are lobbying against the bill because it will mean budget cuts, with a $60-million two-year impact.
It would be better if Garner would just call the bill what it is — a windfall for the top 1 percent of state taxpayers (those making roughly $250,000 or more). It's described as an economic development bill, but this requires a total misunderstanding of business economics to believe. A sale of an asset may or may not produce another investment in Arkansas. It could just as easily unlock money invested in Arkansas to take to another geographic destination. The bill somehow presumes that a tax break on a gain in an investment will drive up the price of stock or property. That's decided by other market factors (profitability of the underlying business, for example), not the tax rate on the profit from the sale. The last decade of national experience hasn't demonstrated an economic development value in lower capital gains tax rates.
Say it like it is. Rich folks believe in taxing work, not wealth. Ed Garner wants to help them implement that belief as state tax policy.
Some Democrats are circulating an amendment to attempt to limit the revenue impact. You may be sure the Republican talk machine is already ginning up the partisan politics talking points. If you are for Ed Garner you are bipartisan, not a shill for the rich. If you are against Ed Garner, you are a nasty partisan, not a sound-budgeting public official like Gov. Mike Beebe who believes the state can't afford giveaways to the already wealthy in these tough times.
LUCKY TIMING: A friend passes along a link about the failure of corporate welfare — special tax breaks, grants, loans and other perks — in economic development, even as Republican governors try to ratchet up the giveaways all across America. Jobs for the unemployed? Perks for the hurting? Grants to the suffering? Health care for the sick? That's not in the Republican/Chamber of Commerce playbook. Trickle-down is still Gospel.
NOTED: Republicans, a la the unhappy Tea Partyer who wrote Gov. Beebe a few days ago, are complaining about lobbying against the bill. They think this is "dirty" politics. Since when was working to beat a bill you oppose anything but the process at work. Some of these guys think their waste matter doesn't stink, apparently.
UPDATE: Some 21 sponsors have dropped off the capital gains tax cut bill, which leaves it with 45. Gov. Mike Beebe has been at work.