Two tax bills coming up, one slightly accelerated than the other, both by the same Representative.
HOUSE BILL 1585 is the one that makes the changes quicker. Right now in Arkansas you’re taxed starting with the first $2,999.00 you make. This bill raises it to ,$4,099.00 and then taxed at 1%. The next $4,100.00 you make will be taxed at 2% instead of the current rate of 2 1/2%. And then it starts cutting it down to 1% by 2016.
(4)(A) For tax years beginning on and after January 1, 2017, the net income subject to the rate of four and one-half percent (4 1/2%) under this section shall be increased each year by the greater of the following:
(i) Ten thousand dollars ($10,000); or
(ii) The cost-of-living adjustment calculated by the director under subdivision (d)(1) of this section.
(B) The net income subject to the rate of six percent (6%) under this section is all net income that exceeds the maximum amount subject to the rate of four and one-half percent (4 1/2%) under this section.
(C)(i) However, if the net general revenues for the fiscal year are equal to or less than the net general revenues for the prior fiscal year, then the adjustments required under this subdivision (d)(4) shall be suspended until the requirements of subdivision (d)(4)(C)(ii) of this section are met and the cost-of-living adjustment required under subdivision (d)(1) of this section shall be in effect for each rate bracket.
(ii) An adjustment that has been suspended under subdivision (d)(4)(C)(i) of this section shall resume when the net general revenues for the fiscal year exceed the net general revenues received for the base fiscal year.
HOUSE BILL 1586 takes longer to accomplish this by a year. A decent start, however, going to no income tax would be better. Right now Arkansas has 7% on income over $32,600. Here’s a link to a site with the state tax rates.
What percentage rate of theft is right?