Tolbert: Mike Ross WANTS To Cut Taxes (But Is Not Sure He Can)

After a couple of delays due to the ice, Mike Ross rolled out what his campaign said would be a “major policy announcement” Wednesday afternoon.  The announcement?  He really wants to pass a major state income tax cut and will do so if elected AND if revenues somehow grow to where he might can actually do it…maybe.

His proposal is a massive state income tax cut with major reforms to the income tax brackets.  Under the plan, the current income tax bracket would be increased to the levels as if inflationary adjustments had been in place since 1971, some 40 plus years ago. It is also 20 years before Ross began serving in the state senate in 1991 until being elected to Congress in 2000 after a decade of not doing anything about cutting the state income tax.  Anyway, this proposed bracket relief would primarily target the middle class by increasing the highest tax bracket from the current level of $34,000 up to $75,100 – double the level that the tax state income tax rate kicks in – as well as similar reforms to the other five bracket levels.

“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,” said Ross.

Sounds great right?  I mean it is similar to almost every income tax cut proposed by Republicans for the last couple of decades that were all called “irresponsible” by Democrats.  So how has the Democratic candidate for governor suddenly become a fan of income tax reform?

Simple.  He hasn’t – at least not really.

Sure, Ross says this is something he wants to do when… well, he won’t say.  Instead he says he wants to  “gradually phase in (his) tax cut plan as the state can afford to do so.”  His plan – if you can call it that – is to pass the tax cut based on revenue growth as it becomes available.  Of course, this manna from heaven may or may not ever actually materialize, but if it does he is ready to pass these income tax cuts…maybe.

I asked his campaign – via several emails and phone calls – how much of this proposal he plans to put in place the first year.  I mean I suppose I can understand not knowing what he may do two or three years into his term, but surely he has a concrete plan for such a centerpiece of his campaign with estimates and projections for the first year. Right?

Nope. His campaign refuses to tell me what he will even do the first year – much less after that.  If for some reason his campaign has just not gotten around to getting me this information, please let me know and I will happily update this.

The pipe dream…eh… proposal from Ross today contrasts starkly with the tax cut proposal from his likely Republican opponent Asa Hutchinson.  His proposal has – you know – an actual timetable about when he will do it and how much it will save taxpayers.  Asa’s proposal is also aimed at the middle class by reducing the income tax rate from 7% to 6% for those earning between $34,000 and $75,000 and from 6% to 5% for those earning $20,400 to $33,999. When does he say he will do it?  His first year in office.

Of course, when Asa proposed his cut Ross thought it was irresponsible.

“Promising $100 million in year one is fiscally irresponsible,” Ross told the Arkansas News Bureau at the time. “That’s pulling a number out of the air and trying to use a tax cut to buy votes.”

So we don’t know how much of his tax proposal – priced at $574.5 million – Ross plans to implement the first year, but it must be less than Asa’s irresponsible $100 million cut, right?  So it must not be very much since $100 million is less than 20 percent of the Ross proposal.

On top of that, Ross has already proposed a targeted manufacturing tax cut priced at around $40 million dollars.  So unless he backs away from that, he could only pass about 10 percent of his income tax proposal before he hit this level he says is irresponsible.  So this big idea quickly shrinks.

Ross counters all this by comparing himself to – of course – Gov. Mike Beebe who gradually phased in the grocery tax cut.  He does not mention that Beebe was able to do this by a combination of the $850 million surplus Beebe had coming into office from Gov. Mike Huckabee and by increasing other taxes such as the increase on the tobacco tax in 2009.

So until Ross can give us some idea as to when he can actually enact his ideas, the major announcement today seems more like a wish list than a serious proposal.

It also appears Ross moved up the timetable for unveiling his tax proposal/wish list from when he said he planned to make the announcement.  In November, shortly after Asa announced his tax cut proposal, Ross sent a memo from his campaign regarding his plan to cut taxes.

“Mike Ross will release his tax relief and job creation plans once DF&A publishes their FY2015 revenue forecast and once the state legislature makes a decision on the reauthorization of the Medicaid private option,” said Ross in the memo. “Both the FY2015 revenue forecast and the Medicaid private option will have major implications on any budget proposal for FY2016 (the first full fiscal year for the next governor). Mike Ross wants these two key pieces of information before releasing any tax reform or job creation plans to ensure both are fiscally responsible and targeted in the best possible way to help working families and create good-paying jobs in this state.”

Unless I have missed something big, this has not happened yet.