On the eve of the Arkansas Legislature being called into special session to consider tax cuts, Dr. Michael Pakko sat down with KATV-7 news reporter Emma Allen to talk about the impact of the proposals for Arkansas taxpayers.

Here is a link to the news story: Special session tax cuts could mean paycheck boost for some Arkansans

_______________

LITTLE ROCK (KATV) — Governor Sanders called for a special session of the Arkansas Legislature on Tuesday, June 12 with multiple high-profile items on the agenda. One of those items is cutting income and property taxes.

Chief Economist and State Economic Forecaster, Dr. Michael Pakko with the Arkansas Economic Development Institute said you will see changes if these taxes are cut.

“When the income tax rate is cut, that directly affects people’s take-home pay,” Pakko said.

He continued, “Probably most people would see an increase in their paycheck due to smaller withholding from tax on an ordinary basis, and if not then, then at least they may see a bigger refund at the end of the tax year next April.”

When it comes to cutting property taxes, Pakko said there will also be a noticeable benefit.

Chief Economist and State Economic Forecaster, Dr. Michael Pakko with the Arkansas Economic Development Institute said you will see changes if these taxes are cut. (KATV)

“There is also a proposal to raise the Homestead Tax Credit from $425 to $500 so that again would be a benefit that people would see when they pay their property taxes,” Pakko said.

But let’s talk numbers. What does this really mean?

Pakko gave an example.

“Just some back-of-the-envelope calculations, a family with a taxable income of about $50,000 is likely to see over $200 in tax relief over the course of the year,” Pakko said. “That does not amount to much on a weekly or even monthly basis but it is a little bit and every little bit helps.”

The proposed tax cuts are possible thanks to Arkansas’ $700 million surplus, but critics said that money should be invested in programs that impact the lives of Arkansans.

“Critics of the plan suggest that some government programs are underfunded and that the money should be devoted to more government spending rather than tax cuts,” Pakko said. “Others might say the tax cuts could be taken in other places but that is the political process. That is the kind of deals that are hammered out in the legislature.”

# # #

“As a Libertarian, I am in favor of all initiatives that provide tax relief to Arkansans. The budget surpluses of the past few years have allowed the state government to cut taxes and to set aside reserve funds for future contingencies. I support the initiatives that have been proposed, and would favor additional tax cuts (not just income and property taxes), supported by real cuts in government spending as well.”