Curtis Coleman Rolls Out Eight-Year Tax Cut Plan (UPDATED)

by Roby Brock ([email protected]) 39 views 

GOP gubernatorial candidate Curtis Coleman rolled out a tax cut and regulatory reduction plan that he said would benefit “mom and pop” businesses, encourage more military retirees to the state, and stoke economic investment in depressed parts of Arkansas.

Coleman’s plan – “Let Arkansas Prosper” – was announced on Wednesday (March 26) at his North Little Rock headquarters. He said his plan would achieve five goals over two terms, if elected.

  1. An unemployment rate of less than 5%.
  2. 100,000 new jobs.
  3. Family incomes up by 32% with a medium household income ranking of not less than 25th in the nation.
  4. A 20% reduction in the average cost of state government per person.
  5. A 20% reduction of the number of Arkansans living below the poverty level.

(Editor’s note: The Coleman campaign sent a revised plan late this afternoon with the following corrections in bold.)

Coleman’s income tax cuts would be phased in over eight years and cost nearly $2.3 billion, he said. Arkansas’ current six tax brackets would be reduced to four five over that time span.

In the first year (2016) of his plan, those making over $50,000 would pay a 6.82% tax rate, while those earning $20,000-$49,999 would pay a 5.85% tax rate. For those making $10,000-$19.999, they would pay at a 4.38% rate. Taxpayers earning $4,100-$9,999 would pay 2.43%, and those making under $4,100 would pay a 0.80% rate.

By 2023, Coleman said those making $50,000-plus would pay at a 5.53% rate. Those making $20,000-$49,999 would pay at a 4.66% tax rate. Individuals making $10,000-$19.999 would pay at a 3.19% tax rate. Taxpayers earning $4,100-$9,999 would pay 1.18%, and those making under $4,100 would pay a 0% rate by year eight.

Coleman said funding for his tax reform would come from “increased state revenues resulting from a increasingly productive and profitable private sector” and “reductions in the annual operating budgets of state agencies.”

His plan would also exempt military retiree pay from state income taxes, a move Coleman said is needed to compete with neighboring states.

Coleman’s plan called for the elimination of corporate taxes on small businesses that generate less than $1 million in sales annually. For businesses generating more than $1 million, they would pay a flat 6% rate.

Finally, Coleman proposed “tax-free enterprise zones” to boost investment in Arkansas counties with a median household income of less than the state average of about $40,100. New businesses could locate in those counties and be exempt from paying corporate income taxes for the first 10 years.

“I have no doubt we can do this,” Coleman said. “Arkansas has the capacities and resources to be one of the most prosperous states in the country. The adjustments we need to make are not radical or extreme. My proposals just give us an opportunity to successfully compete with other states for better paying jobs and more opportunities to be the successful people we can be.”

Coleman’s remarks also outlined changes to the state’s regulatory structure. In addition to tying state government budget increases to no more than the state’s GDP growth in the most recent year, he also would create a task force of small business owners to review “statutory roadblocks” that are “inhibiting the successful growth of Arkansas’ economy,” he said.

Coleman is running in the Republican primary against Asa Hutchinson, who has also rolled out a tax reform proposal.  The winner of the Republican primary faces either Democrat Lynette Bryant or Mike Ross, who has also proposed two major tax cut plans.

The entire text of Coleman’s plan is available here.