Mike Beebe, Asa Hutchinson, a bunch of legislators, and the editorial page of the Arkansas Democrat-Gazette saying that removal of the state sales tax on groceries is a good idea doesn’t make it so. (Not a profound observation, but appropriate in this case.)
To be fair, we’ll note that Hutchinson has come to this position only recently. In January, he told the Associated Press that repeal of the grocery tax was not part of his program, saying, “I would love see that phased out, but the people voted on that and defeated it. I think the people spoke on that issue a few years back.” The reference was to a proposed constitutional amendment rejected by the voters in 2002. Hutchinson’s original answer was a good one, as far as it went. Later, fearful he might be caught clinging to a principle, he reversed field.
The sales tax is a regressive tax, relied on too much by state and local governments in Arkansas, and the grocery tax is the most regressive part. But it’s not enough to say that the grocery tax should be eliminated, one must also say how he’d replace the $270 million or so that the tax produces each year. That money is invested in education, health care and other programs, of which low-income Arkansans are the principal beneficiaries. Rich people don’t send their kids to public schools; some people are actually hostile to the public school system.
Hutchinson and the Democrat-Gazette have no plans for replacing the lost revenue, as far as we can tell. Beebe is a little less callous. He says that removal of the tax should be done in phases, and should be dependent on the state’s economy and tax collections. Most of the legislative proposals we’ve seen don’t include serious solutions to the problem of lost revenue. There’s talk of using the state surplus, but the surplus is one-time money that may not be there next year or the year after. The needs of low-imcome residents of a low-income state are long-term.
The campaign for removal of the grocery tax four years ago was financed entirely by a Little Rock millionaire, egged on by the Democrat-Gazette. Neither he nor it has shown support for equitable tax proposals — restoration of the inheritance tax, for example, or an earned income tax credit that would give tax relief only to those who truly need it. Removal of the grocery tax will aid rich as well as poor.
By itself, removal of the grocery tax will make a regressive tax system even more so. That’s why groups that fight for low-income Arkansans — Advocates for Arkansas Children and Families, ACORN et al — didn’t join the tax-removal campaign in 2002. They know a hypocrite when they see one.