Gov. Asa Hutchinson's
tax bill — tax cuts for many taxpayers, tax increases for others — passed the Senate today 30-3.
Mild objections were raised to passing a big tax cut before hearing Hutchinson's budget plan, which is to be unveiled next week. The only nays came from three Little Rock Democrats — Linda Chesterfield, Joyce Elliott and David Johnson.
The bill cuts income taxes for people making between $21,000 and $75,000, but effectively raises taxes for others by 1) postponing a drop in the top marginal tax rate this yer from 7 to 6.9 percent approved in 2013 and 2) repealing a sharp cut in the capital gains tax passed in 2013 that included, in addition to a reduction in the tax rate on all capital gains from 70 to 50 percent of the full tax rate, a total exemption for gains of more than $10 million.
When fully implemented, the income tax cuts will cost about $100 million a year. The repeal of the capital gains tax cut will save more than $20 million in lost revenue.
The bill goes to the House.
The tax cut gives a reduction of 1 percent in the rate on income, from 6 to 5 percent between $21,000 and $35,000 and from 7 to 6 percent between $35,00 and $75,000.