Ross called the current income tax code, which hasn’t fundamentally changed since 1971, out-of-date and unfair for the average working family. When fully implemented, Ross said his proposal would bring fairness to the tax code and would cut income taxes by as much as $665 for the average working family in Arkansas.
Ross said in his proposal, “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. "I want to modernize our income tax code in a way that means lower, fairer taxes for working families and small businesses in Arkansas, and I want to do so in a fiscally responsible way that maintains our balanced budget and protects vital state services like education, Medicaid and public safety. Just like Governor Beebe did with the sales tax on groceries, I will also gradually phase in my tax cut plan as the state can afford to do so. As governor, I will bring fairness to the tax code and put more of working families’ own money back into their pockets.”
The fundamental structure of the state’s income tax brackets has not changed since 1971. With Act 328 of 1997, state law began tying the brackets to inflation with a 3 percent cap on indexing, but did not make it retroactive – Ross’ tax cut plan essentially makes Act 328 retroactive.
Currently, the state’s top income tax bracket of 7 percent starts at $34,000, meaning every taxpayer who makes more than $34,000 pays the same top tax rate.
Ross’ tax cut plan sets the state’s top tax bracket at $75,100 and lowers the tax rate for nearly all income under $75,100.
Ross said his tax cut plan, when fully implemented, would cut income taxes by as much as $465 for incomes at $30,000; $665 at $40,000; $880 at $50,000; and, $1,148 at $75,000 and up.
Ross also said his tax cut plan would cost about $574.5 million.
Click here to read more about Ross’ tax cut plan.