AP: Gov. Sanders, lawmakers call for $124 million tax cut plan

The tax cut proposal calls for cutting the state’s top individual income tax rate from 4.9% to 4.7% starting this year. It would also cut the top corporate income tax rate from 5.3% to 5.1%.

“Arkansans will feel this tax relief immediately, and I don’t think it could come fast enough,” Sanders said at a news conference at the State Capitol.

State finance officials said 1.1 million taxpayers who make more than $24,300 a year would receive a cut under the proposal.

Sanders, a Republican who took office in January, has called for phasing out the state’s income tax. Sanders’ Republican predecessor, former Gov. Asa Hutchinson, and the majority-GOP Legislature enacted a series of cuts over the past several years.

The push for further tax cuts comes after Arkansas ended last fiscal year with a $1.6 billion surplus. The state’s revenue for the fiscal year so far has come in $250 million higher than forecast.

Legislative leaders introduced the tax cut legislation as they hope to wrap up this year’s legislative session by early April. The session’s remaining agenda includes the state’s budget and Sanders’ call to set aside $470 million for 3,000 more prison beds.

Democrats, however, said the tax cuts over the years have come at the expense of other needs such as education and health care.

“If we continue down this path of phasing out the income tax, we won’t have the resources to deal with these issues and pay for our essential services without raising other types of taxes, like sales taxes and property taxes,” House Minority Leader Tippi McCullough said in a statement.

Associated Press