- Associated Press - Tuesday, March 24, 2015

LITTLE ROCK, Ark. (AP) - A proposed tax credit aimed at helping thousands of low-income residents was rejected by an Arkansas House panel Tuesday, despite complaints from Democrats that the state’s poorest had been left out of this year’s package of cuts.

The bill rejected by the House Revenue and Taxation Committee would have created a state version of the federal Earned Income Tax Credit. About 279,000 Arkansans who receive the federal credit would be eligible for an additional credit from the state under Democratic Rep. Warwick Sabin’s proposal.

Sabin said the credit would help Arkansans who won’t benefit from a $102 million income tax cut signed into law last month, or an effort to restore a capital gains tax break that lawmakers had scaled back earlier this year.

“This is the only proposal in front of you that brings relief to the only segment of the population that hasn’t received relief during this session,” Sabin told the panel before the vote. “Talk is cheap, and when the story of this session is written, what we do on this bill will determine whether we actually put our money where our mouth is, so to speak, and gave tax relief to those people who have been left out thus far.”

Sabin’s proposal would have phased in the tax credit. The proposal was not estimated to cost the state in the coming fiscal year, and would have cost $10 million the following year. It’s estimated to eventually cost the state $40 million a year.

Republican Rep. Charlie Collins, who opposed the measure, said he believed focusing on cutting tax rates would be a better approach to helping low-income residents than a credit.

“While I love the idea of helping these folks, there is nothing I think is more vital to the interests of our state than supporting and growing the class of folks that start and learn skills at the bottom of our income ladder and work themselves up over time,” Collins said.

Republican Gov. Asa Hutchinson last month signed into law legislation carrying out his campaign promise to cut income taxes for the middle class. The House is expected vote this week on restoring a capital gains tax break lawmakers had scaled back to help pay for Hutchinson’s proposal.

Democratic Rep. Joe Jett, who chairs the tax panel, said he didn’t expect the committee to take up any more tax cut proposals before the session’s expected end late next week.


Follow Andrew DeMillo on Twitter at www.twitter.com/ademillo

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