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Wednesday, March 23, 2011

Info Post
Bill Smith, Editor: While elected officials in Little Rock focus on proposed new legislation, State, County and local governments and numerous agencies squeeze the people of Arkansas either through more taxes or through increased indebtedness to be paid for by future taxes. When too much money is collected in a specific fiscal period (which the norm) is it returned to the taxpayers? No. Do they save the surplus money in a "rainy day fund" to aid in covering unfunded future debt? No. Instead, they follow the insidious "tradition and practice" of dividing the surplus from “General Improvement Funds” between the governor, who gets 50%, and the members of the legislature who get the other 50%. The Governor and the members of the legislature then fund “special” (pet) projects in their voting districts which in turn aids them to remain in office.

While Democrats have controlled Arkansas for over 136 years, they have also been successfully co-opting members of the other political parties when they have been elected. Having controlled for so long, even newly elected conservatives are confronted with this established “tradition and practice.” It appears that having been under the yoke of monetary enslavement for so long, many legislatures are unable to break free from spending excess revenue collections that rightly belongs to the taxpayers – the Arkansas people.

Underlying Arkansas "plantation politics" is excessive taxation of workers and business owners who are forced to fund burdensome governments. When surpluses exist and are spent on new projects, these projects more often than not require continued future support via taxes in order to continue to operate. As a result, government (including higher education) at all levels in Arkansas continues to grow.

The following data provides a basis to relate the excessive tax burden placed on Arkansans as compared to that leveled on residents of other states by their governments. To be fair, we will not look at the big states like New York and California which tax their people less, yes less, than Arkansans per dollar earned. Unfortunately, many of these states practice “continuous spending” via debt. They are traveling another road to economic destruction.

In Arkansas, one of the biggest drains on state revenue is the cost of an expanding higher education system. Most of us would agree we have good institutions of education. However, it also important to provide a favorable environment for people to be employed once they graduate. In the past, stronger economies outside of Arkansas provided employment opportunities for our graduates. We were educating large numbers of people who formerly moved somewhere else to get higher paying jobs. But now, the jobs often sought by Arkansans in other states are drying up. At the same time, the high taxes in Arkansas are stifling both entrepreneurs and corporations from locating to Arkansas.

For this article, pending legislation is ignored except to state that if the plantation politicians have their way, the overall tax burden in Arkansas will not be decreased. To highlight the “excessive" taxation in Arkansas, Arkansas will be compared to the taxation in nine nearby states. The tax data from the following nine states are considered: Oklahoma, Kansas, Missouri, Illinois, Kentucky, Tennessee, Mississippi, Louisiana, and Texas.

The following is an edited version of a chart from the Military Officers Association of America which compared the 50 States’ combined state/local tax burdens in calendar year 2009. The chart depicts taxes as a percentage of income which is of importance to people deciding where to relocate to after their service in the military. Not depicted in the data is that Arkansas, unlike most states, even taxes military active duty and retirement pay.

The modified chart removed 40 other states to make it easy for the reader to compare Arkansas to the nine nearby states:
Compared to the nine surrounding states, Arkansas has a higher tax burdens both before and after adding Federal taxes. Arkansas ranks as the 3rd highest taxed state (per percentage of income) out of 50 states when all taxes were considered. Delaware and Minnesota were worse. Without Federal taxes, Arkansas still ranked 7th highest in the nation for the burden of State and local taxes on the incomes of people. As noted in the chart, Arkansas has the highest combined tax burden on income regardless of the method of taxation (sales, income taxes, etc.) when compared to the selected neighboring states. And Arkansas even has 15.5% higher tax burden than the U.S. average for all states. It should be obvious, that Arkansas as a taxing problem as well as a spending problem. And, the states that surround Arkansas offer a more favorable base for businesses as well as its citizens.

It should also be noted that the greatest individual tax burden is not born by the very wealthy residing in Arkansas. The very rich do pay a significant total amount of taxes which is far more individually paid by people like Bob working at the local hardware store. However, it is the majority of Arkansans from the middle to lower income levels that bears the greatest individual tax burden on their incomes. While redistribution of wealth should “never” be the focus, it is a fact that the lower income earners in Arkansas are far more enslaved by many different forms of taxation on their incomes.

An awakening of conservatives has been happening in Arkansas, and a limited number of elected officials are not from the older school of "plantation" politics." However, they are still at high risk succumbing to the old established ways of high taxation based on Arkansas’ past history. The present legislative session evidences some faithful conservatives who are fighting an uphill battle. It is time for all Arkansans to say enough is enough. Don't be bought off with pet projects funded in your area or by the rhetoric of the established plantation politicians.

The above data clearly shows that Arkansans are paying an unfair burden of their income to the "governments" for our right to live and work in the Natural State. It is time to both remember and remind others of Arkansas state motto: Regnat Populus - The People Rule!

Tags: Arkansas, taxes, tax ranking, tax burden, plantation politics To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!

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