IT'S EVEN WORSE THAN THIS: Turns out the Asa tax plan favors the swealthy even more than this analysis snows.
Back to the drawing board on Gov. Asa Hutchinson's tax cut for the ric
h. Turns out it's even worse than it appeared. Or better if you happy to be Richie Rich.
Michael Wickline of the Arkansas Democrat-Gazette today nails down
rumors that the projected impact of Hutchinson's plan actually hid tax increases for a significant number of Arkansans. Asa proposed to take three years to reduce the number of tax brackets and slash the top marginal rate by 15 percent — from 6.9 to 5.9 percent. (Also, the place at which the top tax rate would kick in drops from $73,000 to $18,000, which is where a big part of the problem comes in) .
New estimates say some 200,000 of Arkansas taxpayers would suffer a cumulative tax increase of more than $33 million under the Hutchinson plan as drafted. It turns out an increase in the standard deduction won't be sufficient to offset tax rate increases down at the lower income levels. Example: The plan imposes a 2 percent tax, where only .9 percent is now imposed, on the first $4,300 in income and increases other marginal rates and it takes a while as income moves up for the new rate to drop below existing rates.
We already knew that Hutchinson's plan to slash taxes by almost $200 million was a boon to the rich.
Previous analysis showed
that almost 50 percent of the $200 million would go to the top 1 percent of taxpayers. Further, the top 5 percent, those making more than $199,000, would reap 65 percent of the benefit, more than $125 million of the swag.
Wickline's article doesn't say, but if those below $199,000 were actually looking at more than $33 million in increases not previously recognized, it would seem to follow that the plan actually SHIFTED that amount to the top 5 percent to produce the aggregate projected savings, meaning the original plan gave the super wealthy more than $150 million, or better than 75 percent of the tax cut.
Now THERE is a tax plan a Republican could love. Wickline quotes Hutchinson, however:
"We are going to have to continue to work to make some adjustments to make sure that that's not a tax increase on anyone," Hutchinson said Thursday in an interview in his office?
What's to fix? Sounds perfect for Jim Walton and them.