Party officials trade barbs over taxes


LITTLE ROCK —The Republican Party of Arkansas on Wednesday accused the state Democratic Party of lying in statements that GOP lawmakers plan to raise taxes.

In recent days, the Democratic Party has issued a series of news releases asserting that Republicans are, as one release put it, “intent on abandoning Arkansas families with a push to increase the state sales tax.”

The state Republican Party flatly denied the charge. In a release Wednesday the GOP challenged Democrats to “stop lying about the Republicans’ tax reform plan and come clean to the people of Arkansas about why Democrats think cutting taxes on the middle class is not a good idea.”

Republican House members in April outlined an agenda for the 2013 regular session that included state income tax cuts, and the state GOP platform advocates replacing the state income tax with “a more equitable method of taxation.”

Candace Martin, state spokeswoman for the Democratic Party, said in an interview Wednesday that “at least one Arkansas Republican has a plan to raise the state sales tax.”

She said she was referring to Rep. Denny Altes of Fort Smith, who told the Arkansas News Bureau in April that he had drafted a bill to phase in an increase in the state sales tax and lower the state income tax.

State GOP spokeswoman Katherine Vasilos said Altes’ proposal is not a plan backed by the party.

“There is no plan to raise the state sales tax. It’s not going to happen,” she said.

Asked specifically what the party does support doing about taxes, Vasilos pointed to a proposal that she said has been gaining support among Republican legislators to restructure the state income tax code.

The proposal by Rep. Charlie Collins of Fayetteville would eliminate two of the state’s six income brackets so that people now in the 2.5 percent bracket would pay 1 percent and people in the 7 percent bracket, which applies to annual incomes of $33,200 or more and is Arkansas’ highest tax bracket, would pay 6 percent.

Collins said Wednesday his proposal also would gradually raise the income level for the highest tax bracket. How far to raise it and over how many years would be determined later, he said.

The state’s budget surplus would be used to offset the impact to the state budget so that no cuts in services would be necessary, Collins said. The state finished the fiscal year that ended June 30 with a $145.6 million surplus.

“The end goal is a tax system … where we have fewer tax brackets, where middle-income Arkansans are not paying at the same rate as wealthier Arkansans,” Collins said.

He said the proposal would create jobs by making it less expensive, rather than more expensive, for employers to hire new workers in Arkansas than to hire them in surrounding states.

Collins said his proposal has gained more traction than any other tax proposal among House Republicans. He said that raising the sales tax is “not going to happen.”

The proposal is not likely to win support from Democratic Gov. Mike Beebe. Matt DeCample, a spokesman for Beebe, said Thursday the governor has opposed using surplus funds to pay for any tax cut.

Beebe “does not believe in funding tax cuts with one-time money,” DeCample said. “The governor believes that if you’re going to make a tax cut, you have to build it into your ongoing budget. The governor feels that’s the responsible way to do it and the best way to ensure that you can keep that tax cut for the long term.”

Vasilos said Democrats are accusing Republicans of planning to raise taxes to draw attention away from their own lack of a tax plan.

“The bottom line is they have no plan to lower taxes on middle-class Arkansans, and Republicans do,” she said.

Martin said the Democratic Party supports continuing to lower the state sales tax on groceries, which has been lowered from 6 percent to 1.5 percent since Beebe took office in 2007.

“We favor tax cuts that benefit all Arkansans and not just the wealthiest among us,” Martin said.