Arkansas’s entire tax code is holding the state back from competing with its neighbors, according to Lt. Gov. Tim Griffin.
Griffin spoke to members of the House Revenue and Tax committee yesterday about his support for Gov. Asa Hutchinson’s plan to exempt all state income tax for military retiree benefits.
The exemption is paid for by taxing unemployment benefits, increasing taxes on soda and taxing digital downloads.
While Griffin supports the military retiree benefit exemption, he wasn’t as enthusiastic when asked by Rep. Joe Jett, the committee chairman, about his opinion on a related matter: the new taxes levied to pay for the exemption.
I learned in Congress that pretty much every bill has a good side and a side that you don’t like. I’m not the Governor. I’m not a legislator. I have my preferences and most people know I might do things a little differently, but I’m not here to try to replace your judgement or the Governor’s judgement with mine. Ultimately, I think the good of this bill far outweighs the bad.
However, Griffin said future plans regarding formation of a task force to study the Arkansas tax code made him “more understanding” of the “pay-fors” included in the legislation.
I’m encouraged by the willingness I’ve heard from some folks to look at the entire tax code. I have long been an advocate for starting over with a blank sheet of paper on the tax code. I do not mean the income tax. I mean the entire code. Our code is indefensible. Our code is too complex. Our code hurts job growth. Our code is not competitive. Our code in some rankings is a joke. That’s just a fact. Our code is so bad that we have to give one of our border towns (Texarkana) an exemption from it. I fully support the relief they get. If it were up to me, we’d give more people relief, but the whole state competes with Texas.
The fact that there is a willingness to look at the whole deal encourages me and is part of the reason why in the intermediate/short term I’m more understanding of the pay-fors [included in this bill].
The proposed task force is part of separate legislation lowering income taxes for low-income Arkansans. The legislative task force would be required to produce a report outlining how to improve the state tax code’s “fairness and competitiveness.”
HB 1162 was passed out of committee today; it will head to the full House for a vote next week.