Income tax cuts advance in Arkansas
Both the Arkansas House and Senate approved initial tax cut legislation Wednesday ahead of their final votes scheduled on Thursday.
What's happening: The cuts are estimated to cost the state $500 million a year in 2026. That's the first year when all reductions would be in place.
- Lawmakers met this week in a special session called by Gov. Asa Hutchinson, who asked that they focus on the tax issue.
The big picture: If enacted, the legislation will cut the top individual income tax rate from 5.9% to 4.9% by 2025. It also includes a low-income tax credit and corporate income tax cuts.
- The lower rate would give Arkansans more money to spend, effectively raising wages.
- Hutchinson says the reductions make Arkansas more competitive with neighboring states.
Yes, but: Arkansas Advocates for Children and Families on behalf of 16 public service agencies sent a letter to lawmakers last week urging them to not pass the cuts. The group believes the state's educational and health care systems will suffer from lower tax revenue.
What they're saying: "We urge the General Assembly not to spend money on a cut to the top tax rate that will largely benefit a small number of wealthy Arkansans, while more than 1 in 5 children in Arkansas grows up in poverty," the letter reads.
The intrigue: Despite Hutchison's public opposition to the introduction of abortion-related legislation, Senate Bill 14 and House Bill 1010 were introduced Wednesday. The bills will not be considered unless two-thirds of the General Assembly vote to extend the session.
- Rep. Mark Lowery told Axios last week that he's hopeful the special session can be extended so it can take up critical race theory.
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