Too Many Tax Lovers ….. But A Few Taxpayer Defenders

Conduit For Action tracked four tax increase bills in the 2017 Arkansas General Assembly. Four were considered in the House of Representative and three were considered in the Senate.

You may be surprised by voting records, especially records of several Republicans.

  1. Sixteen Senators voted for ALL three tax increases considered in the Senate. That means only two more legislators were needed to achieve a majority vote.  The pro-tax Senate passed all three tax increases considered.
  2. The House of Representatives did only a little better, passing only two tax increase bills, which became law. Fifteen Representatives who voted for ALL four taxes considered in the House.

Did you know?:

  • All four tax increase bills were sponsored by Republicans.
  • It wasn’t just Democrats who voted for tax increases. Republicans have a large majority in both the Senate and House.
  • Governor Asa Hutchinson (R) supports passing the two remaining tax bills.

This is the list of the tax increase bills we tracked.  (A longer description of the bills appears later in this article.)

  • SB140 – Internet Tax = $100 million – FAILED
  • HB1267 – Tax on mounting new or used tires = No revenue estimates are available – PASSED (Act 317)
  • HB1162 – Retired military income tax exemption and soft drink manufacturer exemption, but imposed new taxes on soft drinks, candy, internet downloads, and unemployment compensation. It brings in more taxes than the cost of the exemptions = $5.9 million- PASSED (Act 141)
  • HB1726 – Part of a two-bill plan to increase gas and diesel taxes for highway bonds to be voted on by the people = $217.2 million- FAILED (and only considered in the House of Representatives)

THE TAX LOVERS

Sixteen of 35 Senators voted for all 3 tax increase bills considered in the Senate.  The tax lovers are:

  • Republicans: Ron Caldwell, John Cooper, Lance Eads, Jane English, Jim Hendren, Jimmy Hickey, Jeremy Hutchinson, Bill Sample, and Eddie Joe Williams
  • Democrats: Will Bond, Eddie Cheatham, Linda Chesterfield, Joyce Elliot, Keith Ingram, Uvalde Lindsey, and Bruce Maloch

15 of 100 Representatives voted for all 4 tax increase bills considered by the House. The Representatives are:

  • Republicans: Karilyn Brown, Bruce Coleman, Charlie Collins, Carol Dalby, Dan Douglas, Jon Eubanks, David Hillman, Laurie Rushing, Matthew Shepherd, and Danny Watson
  • Democrats: Fred Allen, Charles Blake, Mark McElroy, Milton Nicks, and Clarke Tucker

Who would have thought many Republicans would be at the forefront of these tax increase efforts?

DEFENDERS OF TAXPAYERS

While the voting records look grim for the pocket books of taxpayers, some Republicans refused to vote for any of the taxes. We want to make sure these Republicans are recognized for their stand against increasing your tax burden.

Senators who did not vote for the 3 tax increases considered by the Senate:

  • Linda Collins-Smith, Scott Flippo, and Bryan King*.

Representatives who did not vote for the 4 tax increases considered by the House:

  • Bob Ballinger, Mary Bentley*, Les Eaves, Mickey Gates*, Justin Gonzales, Grant Hodges, Jack Ladyman, Robin Lundstrum, Austin McCollum, David Meeks, Stephen Meeks, Josh Miller, John Payton, Dan Sullivan, and Richard Womack.

* Legislators with an asterisk by their name had an excused absence on one of the votes.  Had they wanted to vote for a tax when absent they could have done so by a procedure called “pairing.”

OTHER LEGISLATORS

The remaining Senators voted for 1 or 2 of the tax increases, and, the remaining Representatives voted for 1, 2, or 3 of the tax increases. To see how they voted look at the charts by Conduit For Action.

SUMMARY OF THE TAX INCREASE BILLS

  1. House Bill HB1162 (Act 141) it was sold as an income tax exemption for military retirement pay. It also gave a tax exemption to soft drink manufacturers. The bill was controversial because of several tax increases included in the bill which makes it a net tax increase. It increases the tax on soft drinks and candy, imposes a tax on digital products and digital downloads, and applies the income tax to payments of unemployment compensation. There was another bill to give a tax break for military retirement pay that did not include tax increases, but it saw no action. (The new law will increase taxes by $3 million in Fiscal Year 2018 and $5.9 million in Fiscal Year 2019)[i] Even if the tax breaks and tax increases had balanced it would still be a tax increase law, because most taxpayers will pay more while only a few will pay less.
  2. House Bill 1267 (Act 317) increased the tax on new tires by $1.00 and imposed a new tax of $1.00 on used tires. The new law calls it a “fee” but it is still a tax. (How much of a tax increase will result from the tax on used tires is unknown, but the remainder of the new law will increase taxes by $1.5 million.)[ii]
  3. Senate Bill 140 failed but would have imposed an internet sales and use tax when you purchase goods from out-of-state sellers. (The sponsor estimated up to $100 million in new tax money.)[iii]
  4. House Bill 1726 failed in the House. (Never considered in the Senate). It was part of a two-bill plan to increase gasoline and diesel taxes to fund highway bonds. The bill would have put on the ballot a proposal to authorize new highway bonds, but the proposal would not tell voters a vote “FOR” would trigger an increase in gasoline and diesel taxes. Note the impact is found in the companion bill HB1727 and both bills were necessary for the plan. (Increase of $217.2 million.)[iv]

[i]General Revenue Estimated Impacts of the 91st General Assembly, 2017 Regular Session,” 2017 Summary of Fiscal Legislation, Bureau of Legislative Research

[ii] http://www.arkleg.state.ar.us/assembly/2017/2017R/Fiscal%20Impacts/HB1267-DFA2.pdf

[iii] http://www.arkansasonline.com/news/2017/apr/04/online-sales-tax-quest-fails-again-2017/

[iv] Passage of both HB1726 and HB1727 would have been necessary for the tax plan.  This is the link to the Fiscal Impact Statement for HB1727 – http://www.arkleg.state.ar.us/assembly/2017/2017R/Fiscal%20Impacts/HB1727-DFA1.pdf