Northeast Arkansas legislators want common sense changes to state’s tax code

The Arkansas Tax Reform and Relief Legislative Task Force was formed Monday and at least one member, freshman Rep. Fran. Cavenaugh, R-Walnut Ridge, lobbied hard for a spot. The tax task force will spend this year and next developing suggested changes to the state’s tax code with a focus on income taxes, Cavenaugh told Talk Business & Politics. Why did she want on the panel?

“I think we need to make sure we have common sense solutions,” she said.

Her primary goals are to evaluate a broad range of ideas that will be presented over the next year. She hopes the task force will be able to develop a plan to make Arkansas a premier destination in the region for businesses and talented workers.

“We need tax laws that help us compete with the states around us. It’s something we need to do,” she said.

Cavenaugh didn’t name any specific changes she wants enacted. She prefers to evaluate the merits of the ideas and the intended and unintended consequences of proposals.

The panel will meet for the next year to review Arkansas’ tax policies with a goal towards reforming the state tax code by the 2019 regular session. The task force was created as a result of Acts 78 and 79 of 2017, which called for a review in addition to cutting nearly $50.5 million in taxes to low-income residents. The legislation tasks the 16-member group with modernizing and simplifying the Arkansas tax code, while making it fairer for all taxpayers.

Rep. Joe Jett, R-Success, was one of three Northeast Arkansas legislators named to the task force. He thinks the state needs comprehensive changes including tax credits, tax exemptions, and a tie-in to the way the state funds its highways. Jett said serious thought has to be given to the consequences of reducing the state’s revenue streams. Jett, chairman of the House Revenue and Tax Committee, will also serve on the Joint Committee of Economic and Tax Policy.

“My goal would be to come up with a responsible, comprehensive tax plan that helps hard working Arkansans,” he said. “I think everything should be on the table.”

Sen. Dave Wallace, R-Leachville, also appointed to the task force, thinks surrounding states use their tax codes to lure in businesses. Task force members need to study those states, especially Texas and Tennessee to determine what changes need to be made, he said.

“When I worked in the corporate world, we did a lot of business in Texas. It’s one of the most business-friendly states in the country. We need to learn from that,” he said.

Task force members include those with a broad array of experience, Wallace said. Some are progressive or left-leaning, while others are more conservative, he said. Those with experience in the financial world, business owners, teachers, and others will bring valuable points of view to the discussions, he said.

“Our tax code needs to be fair to every working man and every working woman in the state. They pay the taxes,” he said.