Tax Creep, Liberal Creeps, and the Arkansas Middle Class

Posted on May 7th, 2009

Since 1971 inflation has been pushing poorer and poorer Arkansans into higher and higher tax brackets. The gradual process that pushes people into higher and higher tax brackets is called “bracket creep.” The legislature raised the income tax rate in 1971 but failed to index the tax rate to the Consumer Price Index (CPI) – a nearly universally accepted measure of inflation. This means that every year, the state government gets a bigger and bigger share of your income even if the legislature does not pass a tax increase.

Furthermore, for all you liberals out there who claim to care about the “poor”, it also means that each and every year since 1971, the Arkansas Income Tax becomes more and more regressive. Personally, I am all well and good with a “flat tax” for everyone… but the system right now severely punishes the hard-working middle class in Arkansas. I am referring to those who make more than $28,500 but less than $133,279. Can you believe that $28,500 puts you in the RICH tax bracket? That is beyond wrong, it borders on evil.

When the current tax brackets went into effect the CPI was 39.900 (using 1971-01-01 numbers), now it is at 212.714 (using 2009-03-01 numbers, the latest I can find). This results in effectively a 533% tax increase since 1971 for some income tax filers. In my opinion that is unacceptably obscene, but it gets worse as I will explain later. If tax rates had been kept fair and indexed to inflation, here is what the tax brackets should look like today:

As I was saying, it gets worse. The Arkansas legislature passed a law in the late 1990s that allows the Arkansas Department of Finance & Adminstration (DFA) to make adjustments in response to CPI. Have they done it? Hell no!. This is a perfect example of putting unelected officials in charge of doing the right thing by the people of Arkansas.

The Arkansas legislature should retroactively index the 1971 income tax table to the CPI and limit state government spending to the Arkansas per capita income growth. When the governor or Arkansas legislature asks for more money for this program or that program or roads and highways, ask them what they did with the 533% automatic tax increase that has been leveled since 1971.

The Arkansas taxpayers have been chumps for 38 years, suffering from a secret tax increase that occured without a vote. Don’t you think that is enough?

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4 Responses to “Tax Creep, Liberal Creeps, and the Arkansas Middle Class”

1. Heather Johnson Says:
   May 10th, 2009 at 10:52 am

   Yes. More than enough.

2. Josh Says:
   May 12th, 2009 at 2:37 pm

   Bloggers over at the Arkansas Times are calling your tax ideas “outdated” and “illogical,” which is ironic, considering that socialistic policies have been around forever and they’re based upon emotion, not logic.

   If the entire Arkansas Legislature understood real-world economics half as well as you we’d all be better off.

3. Mark Martin Says:
   May 14th, 2009 at 11:14 am

   Josh,
    
   Thanks. I notice that none of them bothered to explain how this post is either outdated or illogical.
    
   Typical liberals used to be ingenious thinkers, however much I disagree with them. Herbert Marcuse immediately comes to mind. Now however, they have only pseudo-intellectual parrots who have no understanding of the philosophical underpinnings of their worldviews. This is the type of people who overwhelmingly represent the hilarious cast of characters over at the Arkansas Times.
    
   A true intellectual “liberal” like Marcuse practiced self “intueri” (contemplation) to recognize weaknesses to be guarded against. This prevented them from ignorantly slipping into completely accepting fascism and totalitarianism. Liberals today don’t do that, which is exactly what makes them both dangerous and frightening.
    
   Take heart in the fact that whatever short-term impact those at Arkansas Times may have, the long-term significance of their comments is equivalent to playground prattle. It is perhaps even less.

4. Douglas Ward Says:
   November 5th, 2009 at 8:05 pm

   I think it’s better to use the term “flat-rate tax” instead of “flat tax”. A flat tax sounds a little ambiguous, and it might be mistaken to mean that everyone pays the same amount, regardless of income. Including the ‘rate’ makes it clearer that everyone pays the same percentage. Steve Forbes had the right idea: make it simple enough to fit on a postcard.