LITTLE ROCK — I can think of no more worthy purpose for this blessing of space in the state’s leading newspaper.
So I will attempt to explain something to the poor people of Arkansas, who may not have time to keep up with such things. It is how the state’s raging Republican insurgency sometimes manipulates them into voting against their own interests.
I will get accused of class warfare. But I’m only trying to advise the poor folks of the existence of substantive ammunition against the major unprovoked offensive by which they’ve long been besieged.
We will use for our case study the basic policy differences showcased in my ongoing and altogether civil public dialogue with the affable Republican state Rep. Charlie Collins of Fayetteville.
Collins is the House Republican point person for a plan to reduce state income-tax rates. His spiel-his obsessive mantra-is that this tax cut will provide a “jobs magnet” for the state.
It is an assertion for which there simply is no evidence.
I believe instead that we should continue drawing down the sales tax on grocery food. The reduction has been vetted by the voters in their support of Gov. Mike Beebe, who champions it.
I also embrace the food-tax reduction as a moral imperative: Why should the government dare take an add-on to what a working family spends to buy milk?
I also believe state government can’t afford both tax cuts if it is to attend to public schools, higher education, human services and economic development.
So on Sunday, my friend Rep. Collins got another letter-to-the-editor published taking exception to my recent writings.
He objected that I called his income-tax-cut plan a sop to the rich, considering that everyone would get a cut. He objected also to my support for the transcendent logic of expanding Medicaid at federal expense for a poor and unhealthy state.
He said the state couldn’t afford such a thing and that, in fact, we need to undo health-care reform altogether.
Collins wrote that his plan actually reduced personal income taxes for lowest-income folks by 60 percent and for the top income bracket by only 14 percent.
So poor folks would reap a wildly inordinate bonanza. Or so Charlie would have them believe.
Those calculations were superficial and misleading, and I’m being kind.
Charlie is taking first the current tax rate for some of the lowest-income taxpayers, which is 2.5 percent for those making from $3.900 to $7,800. Then he is saying that his proposed new rate for those taxpayers, which is 1 percent, is 60 percent lower.
That is to say that he is trying to make something of the fact that the mere number-1-is 60 percent lower than the mere number of 2.5.
Then he’s taking the 7 percent current rate for top-bracket incomes and calculating that it is, by comparison, only a 14 percent reduction from that to the 6 percent he proposes.
First things first: It is a simple mathematical fact that the lower the starting number, the greater the percentage of any change.
If you have one blister on your foot and you get a second, then you have sustained a 100 percent increase in blisters. Sounds bad. But if you have seven blisters on your foot and you pick up an eighth, then you’ve had a mere 12.5 percent increase in blisters. Sounds inconsequential. But your foot hurts.
The only credible and substantive way to assess the relative effect on categories of taxpayers under Collins’ proposed reductions is to dig down to the actual dollars going into personal pockets.
If you make $7,800 in a year in adjusted taxable income, then you are, of course, starving. But Charlie would relieve you by reducing your marginal rate for income above $3,900-on $3,900 in other words-from 2.5 percent to 1 percent. You’d get to get to keep about $60 a year, maybe enough to get through a few aisles at the supermarket one time.
And, remember, Charlie would not expand Medicaid or allow you any kind of new health-insurance subsidies. Those can’t be afforded, you see. (Especially in a state cutting income taxes.)
But consider this: If you make $252,600 in a year in adjusted taxable income, then you are in considerable less urgent need of relief than the man previously mentioned with an income of $7,800. Collins would reduce, from 7 percent to 6 percent, the marginal tax on the portion of $252,600 income exceeding $32,600, or $220,000. That nets you $2,200.
Here’s the really relevant percentage calculation: What’s the percentage of the better deal the well-off guy gets with $2,200 than the poor guy gets with $60?
It’s a big number.
How unfair is that, especially if government doesn’t help the starving guy with health insurance?
A lot, and the unfairness grows as the income rises.
Of course, Collins’ trump card is that his plan somehow would lure people to the state to create jobs and get all these poor people off Medicaid.
As in Tennessee, I guess, which has no income tax at all . . . and a higher unemployment rate than ours.
John Brummett is a regular columnist for the Arkansas Democrat-Gazette. Email him at email@example.com. Read his blog at brummett.arkansasonline.com.