EDITORIALS : Why not both?
Posted on Wednesday, January 17, 2007
WHAT’S happening behind
the scenes at the state
Legislature ? We hear Big Mo is building for a state version of the Earned Income Tax Credit. The Earned what ? Whose Income ? The E. I. T. C. is just a fancy way of assuring that working stiffs who don’t make enough to pay income taxes still get a break. It’s a way to reward hard work and give folks an incentive to become independent—instead of staying on the welfare rolls. We also hear that some legislators prefer the E. I. T. C. to any repeal of the state’s 6-centson-the-dollar sales tax on groceries, which has to be the most gosh-awful feature of the state’s gosh-awful regressive tax structure. And get this: Some legislators, we hear, would prefer a state E. I. T. C. over even Mike Beebe’s just halfway reduction of the grocery tax to 3 cents on the dollar.
Surely we hear wrong. Can these legislators be opposed to giving the poor even a little help with their groceries ? Do they really think making a small gesture like a state E. I. T. C. is any kind of substitute for a simple, long overdue act of justice like taking the tax off the very necessities of life ? Surely even legislators are not that cruel—or cynical.
But of course that’s just what we do suspect. Because some folks just can’t bear the thought that a tax break for the poor might also benefit the middle class, or, Heaven forfend, the rich, too. So they’d gladly keep the poor down lest they help others up. Goodness, why not help everybody ? But that thought never seems to occur to these folks.
On the off-chance that some legislators really are taking a one-or-the-other approach to these two forms of tax relief, it might clarify matters if they took a look at the following factoids, courtesy of the Arkansas Policy Foundation:
Fact: A state E. I. T. C. probably would apply only to those households earning $ 35, 000 a year or less. So most of the middle class would get no break at all. Even those folks who are struggling to stay in it.
Fact: Elimination of the grocery tax would help everybody, especially those folks in the middle class and lower-middle class. In Arkansas, about half a million households earn between $ 25, 000 and $ 75, 000 a year. Which is our definition of middle class. And those folks could stand some help. Or just a little justice. Instead of being taken for 6 percent every time they go to the grocery store.
Fact: A typical Arkansas family of four has a median income of $ 49, 000. Say the family spends $ 150 a week on groceries. Under the proposed 3-cent cut of Halfway Mike Beebe’s, that family would save $ 234 a year in taxes on groceries. If you think $ 234 a year wouldn’t be much help to a family of four getting by on 49-grand, then think about how much they’d appreciate a full repeal of the tax on their food—some $ 468 a year. Gosh, that’s a new dining-room table. That’s clothes for the kids. That’s car repairs. That’s a little breathing room come time to balance the checkbook. That’s real life stuff.
A state version of the federal Earned Income Tax Credit sounds like a fine idea. But it sounds a lot better when coupled with full repeal of the grocery tax, which ought to be Priority No. 1 for anybody trying to fix the state’s tax structure. Conclusion: Thinking legislators will want to consider a two-fer. If they pass both, a state E. I. T. C. and repeal of the grocery tax, working people all across Arkansas would be more grateful than some of these legislators might be able to appreciate.
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