Ross called the current income tax code, which hasn’t fundamentally changed since 1971, out-of-date and unfair for the average working family. When fully implemented, Ross said his proposal would bring fairness to the tax code and would cut income taxes by as much as $665 for the average working family in Arkansas.
Ross said in his proposal, “When a single mom in Arkansas making $34,000 a year is paying the same income tax rate as someone making $340,000 a year, there is something unfair and morally wrong about our tax code. "I want to modernize our income tax code in a way that means lower, fairer taxes for working families and small businesses in Arkansas, and I want to do so in a fiscally responsible way that maintains our balanced budget and protects vital state services like education, Medicaid and public safety. Just like Governor Beebe did with the sales tax on groceries, I will also gradually phase in my tax cut plan as the state can afford to do so. As governor, I will bring fairness to the tax code and put more of working families’ own money back into their pockets.”
The fundamental structure of the state’s income tax brackets has not changed since 1971. With Act 328 of 1997, state law began tying the brackets to inflation with a 3 percent cap on indexing, but did not make it retroactive – Ross’ tax cut plan essentially makes Act 328 retroactive.
Currently, the state’s top income tax bracket of 7 percent starts at $34,000, meaning every taxpayer who makes more than $34,000 pays the same top tax rate.
Ross’ tax cut plan sets the state’s top tax bracket at $75,100 and lowers the tax rate for nearly all income under $75,100 which will reduce the tax burden for nearly every working Arkansas family and many small businesses.
Ross said his tax cut plan, when fully implemented, would cut income taxes by as much as $465 for incomes at $30,000; $665 at $40,000; $880 at $50,000; and, $1,148 at $75,000 and up.
Ross also said his tax cut plan would cost about $574.5 million. According to official estimates from the state’s Department of Finance & Administration nearly half of the cost of Governor Beebe’s 2006 proposal to eliminate the sales tax on groceries.
Ross added that he would systematically phase in his tax cut plan in a fiscally responsibly way as the state experiences revenue growth, just as Gov. Beebe has done with the sales tax on groceries.
“Governor Beebe’s leadership demonstrates that we can cut taxes for working families and small businesses and protect vital state services,” said Ross. “My tax cut plan will bring fairness to the tax code by cutting taxes for working families and small businesses who need it most. And, it will be implemented in a fiscally responsible way by phasing it in gradually as the state experiences revenue growth, maintaining our state’s balanced budget. I will always campaign and govern as a fiscal conservative, because, unlike my opponents, I will not bankrupt this state to win an election or make a campaign promise I cannot keep.”
Click here to read more about Ross’ tax cut plan.
Copyright 2015 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.