LITTLE ROCK, Ark. (KNWA / KFTA) – Gov. Asa Hutchinson (R-AR) announced on Tuesday that a special session of the Arkansas General Assembly will soon consider a plan to cut personal income tax.
“Everyone knows that I have fully supported the drop in the personal income tax rate in Arkansas,” Hutchinson said during his weekly COVID-19 press conference on Tuesday. “I have worked closely with the chairman of the tax drafting committee, as well as with House and Senate leaders to try to reach consensus on what should be in a tax reduction plan.”
The Republican governor said three main components were being considered as part of the plan: 1) a tax break for low-income people that would increase the individual tax credit from $ 29 to $ 60 for those earning less than 22,900 $. 2) by combining the low and middle income tax tables, 3) by reducing the maximum rate from 5.9% to 5.5% next year and to 5.3% on January 1, 2023.
Hutchinson said there had also been discussions about reducing the corporate tax rate.
“Part of this should be triggered based on certain state financial revenue responsibilities to ensure the RSA is properly funded,” Hutchinson said.
By income bracket, most of the tax cut – 43.4% – would go to those earning $ 82,001 and more, according to charts presented by Hutchinson on Tuesday.
The remaining 56.6 percent of the tax cut would go to those earning less than $ 82,000.
“There is broad agreement that these should be parts of the plan,” Hutchinson said, noting that he wanted to get the facts out to the public so they could participate in the conversation.
The extraordinary session provisionally scheduled for Monday, October 25 will be postponed.
“I will be working with the legislative leadership to finalize this scheme into, hopefully, a bill, which we can generate the support needed to pass in session,” Hutchinson said.