Democratic Underground - ALEC tries but fails to eliminate the capital gains tax in Arkansas

http://www.arkansasbusiness.com/article.aspx?aID=126091.54928.138232

UPDATED: Ed Garner's Capital Gains Tax Cut Fails in Senate Committee
By Mark Carter
3/16/2011 1:52:27 PM

The bill to eliminate the state's capital gains tax fell one vote short of approval in a Senate committee on Wednesday.

HB1002, by Rep. Ed Garner, R-Maumelle, was approved in the Arkansas House but received only four voice votes on the eight-member Senate Revenue & Tax Committee, split evenly between Republicans and Democrats. It needed five to pass.

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The Department of Finance & Administration officially opposed the bill, reflecting the stance of Beebe, whose influence was evident in committee. DFA's Tim Leathers testified against it, citing a $68.5 million revenue impact and lack of guarantee that exempting capital gains earners from the tax would ever produce offsetting revenue.

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Also testifying for the bill were Arkansas State Chamber of Commerce director Randy Zook; Adrian Price, Business and Economics Division faculty chair at Little Rock's Philander Smith College, and Jonathan Williams, tax and fiscal policy director for the American Legislative Exchange Council, a national association of state legislators.

Note that the director of ALEC's Tax and Fiscal Policy Task Force testified in favor of the bill.

Ed Garner, the legislator who sponsored this bill -- which would have cost the stste $68.5 million in lost revenue -- is a member of that task force, according to this press release from ALEC:

http://www.prnewswire.com/news-releases/new-study-outlines-the-road-to-economic-recovery-for-states-arkansass-economic-outlook-ranks-13th-best-nationally-96458874.html

Garner's Facebook profile has a Note saying his bill "follows ALEC model legislation by eliminating anti-growth state capital gains taxes on businesses and properties throughout the state of Arkansas."

http://www.facebook.com/note.php?note_id=10150105062378004

That Facebook Note is a copy of an "Issue Alert" sent by the task force to "ALEC Arkansas Public Sector Members" -- the state legislators who are members of ALEC -- telling them, last month, to ignore the estimated revenue losses as "severely misguided."

So ALEC not only provides the model legislation, but it sends out alerts to its legislator members advising them how to vote and telling them to ignore evidence that ALEC legislation is harmful.

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