Arkansas Sales Tax

I didn't intend for this issue to dominate my schedule as much as it has. However, since agreeing to participate in the forum at North Arkansas College tomorrow, it has become the main focus.

We have been receiving a lot of phone calls, many of which bring up some of the phony claims being made by the opponents of the repeal measure. They have pulled out all stops in their campaign to portray those of us in favor of this measure as evil cold-hearted Libertarians who want nothing less than to shut down every government program and kick every needy person out into the street to suffer and die. It's exactly how the DemonRats in DC, and their sycophants in the media, constantly portray Republicans.

A caller this morning said they were told that if this passes, all funding for public education will dry up and all of the schools will have to shut down. The fact that the schools receive almost all of their funding from property taxes, which have no relation whatsoever to sales taxes, seems to be overlooked.

I am scheduled to do an interview with a local radio station later this afternoon to present the arguments in favor of repealing the sales tax on food and medicine. They originally wanted me to drive into town, but they finally agreed to let me handle it over the phone.

I'm not going to bore everyone with every detail of this matter. However, since the issue is whether human food and medicine should be exempt from sales tax, I thought it would be interesting to see what kinds of things are already exempt from sales tax here in Arkansas. They don't have an easy way to see all of the hundreds of special exemptions that are spread throughout these 106 pages of official sales tax regulations. However, they run the gamut. The one that has long struck me as an extreme example of the unfairness is in Section GR-45 on Page 53, where all foods and medicines for livestock and poultry are exempted from sales taxes.

Interestingly, none of those exemptions, that I am aware of, was placed there by the voters. They were all instigated by legislators who were doing favors for their "special friends" (aka big campaign contributors). I actually saw this very process in action back in 1995 during a trip to the Capitol in Little Rock with the Leadership Institute I was taking with the Harrison Chamber of Commerce. We sat in on some committee hearings where they were trying to pass special sales tax exemptions for specific companies. They were threatening to shut down and leave the State if their special exemptions weren't granted.

If additional sales tax money is so important to the bureaucrats, maybe they can take a look at removing some of the esoteric exemptions that only benefit certain people and companies rather than penalize everyone for buying their food and medicine.

KMK
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 10/30/2002 02:12:00 PM Send this post: