LITTLE ROCK – Lieutenant Governor Tim Griffin has sent a letter to each member of the Tax Reform and Relief Legislative Task Force outlining his perspective on and recommendations for bold comprehensive tax reform and relief. Speaking about the need for tax reform and relief, Griffin said:
"Whether it's an entrepreneur trying to grow a small business, a family trying to make ends meet, or a parent saving for their child's college fund, we owe it to the people of Arkansas to simplify the tax code, lower the tax burden, and embrace transformation as the path to achieve these goals."
Griffin's letter contains three recommendations regarding taxes in Arkansas:
1. Simplify the Tax Code
2. Lower the Tax Burden
3. Embrace Transformation as the Key to Lower Spending, Tax Reform and Relief
After issuing the letter, Griffin made the following statement:
"I applaud Governor Hutchinson and our legislators for pushing the issue of taxes to the forefront with this task force. We have made progress in recent years by reducing the tax burden, but there is much more work to be done. Arkansas's tax code must be simplified and the tax burden must continue to be lowered in order to make Arkansas more competitive with surrounding states. Most importantly, we must embrace government transformation as the key to achieving these goals."
The full text of the letter can be viewed below:
Dear Members of the Tax Reform and Relief Legislative Task Force:
I applaud Governor Hutchinson and the legislature for making a discussion of tax reform and relief a priority. Tackling the entire tax code is not an easy task, but it is critical for Arkansas. As lieutenant governor, a former member of the House Ways and Means Committee, and a taxpayer, I am excited about the possibility of bold comprehensive tax reform and relief that result in pro-growth tax policies to help Arkansas compete and grow jobs.
For years, I have listened to Arkansans from all walks of life talk about how burdensome the tax code is and how it cries out for reform—bold comprehensive reform. In fact, I support Texarkana’s income tax exemption 100%, but doesn’t it tell us something when our tax code is so uncompetitive we have to exempt an entire town from a key part of it? And to this day, the problem persists. As you consider input, I would like to share my perspective on this issue:
Recommendation 1: Simplify the Tax Code
Our tax code is too complicated. There are multiple ways to simplify the code such as revise the bracket structures, remove unnecessary exemptions in order to lower rates on personal and business income, and eliminate anti-growth provisions like the capital gains tax. According to the non-partisan Tax Foundation’s report, Arkansas: The Road Map to Tax Reform, our individual income tax rate schedule is “incredibly cumbersome,” and “[t]his sort of complexity creates administrative headaches and makes the code difficult for individuals to understand.” Let’s simplify the code. But simplification should not be our only goal.
Recommendation 2: Lower the Tax Burden
Simply put, Arkansans are taxed too much. While we have made progress in reducing the tax burden over the past two years, there is still much work to be done. According to the Tax Foundation, Arkansans shoulder a larger state and local tax burden than any of our surrounding states. Nationally, our ranking as the state with the 17th highest state and local tax burden places us well below average. Further, the Tax Foundation’s State Business Tax Climate Index ranks us 38th among the 50 states and the District of Columbia. We must improve in these crucial categories.
While the complexity of our code is a problem, Arkansas’s lack of competitiveness is chiefly due to exceedingly high taxes, not a complicated bracket structure. No potential investor comparing Arkansas’s tax code to other states would say, “The high taxes in Arkansas don’t bother me, but their tax code is so complex I don’t think I’ll set up shop there.” When potential job creators compare Arkansas to other states, the complexity of our tax code can be a factor, but the price of doing business is the primary deterrent. The tax reform and relief task force should not focus only on revenue-neutral reforms and skip the relief part. That would be a mistake.
Recommendation 3: Embrace Transformation as the Key to Lower Spending, Tax Reform and Relief
Why do Arkansans pay so much in taxes? It’s because Arkansas state government requires too much revenue to function—it spends too much. What does spending have to do with taxes? Everything. By law, our revenue and expenditures must balance, and rightfully so. So where do we find the savings? Transformation is the answer. Transformation is not about trimming a few government agencies and programs. To the contrary, it is about rethinking and modernizing state government over a period of years, allowing for tax dollars to be spent where they are most needed, and making sure our hard-working state employees have the tools they need to do their jobs. It is the key to tax reform and relief, and I applaud Governor Hutchinson for making transformation a priority. But make no mistake, the legislature is an essential partner in achieving any real change. I understand this task force is not charged with addressing spending, but the tax dollars required to fund state government are directly related to tax policy.
It is essential that we find ways to make state government more innovative, efficient, and effective. We need a complete and total, top-to-bottom overhaul—transformation—of state government. First, government officials have a moral obligation to spend taxpayer dollars wisely and, as a result, a moral obligation to reform an outdated, top-down government, much of which was designed during the Cold War. Second, transformation done right will result in improved services by a more responsive, transparent, and accountable government and provide Arkansans more value for the hard-earned tax dollars they are required by law to pay. Third, transformation could potentially save hundreds of millions of dollars by reducing the cost of government which can then be used for tax reform and relief for hardworking Arkansans and critical needs such as education, public safety, and highways and infrastructure. A formal legislative embrace of transformation would be welcome and powerful.
Tax reform and relief is ultimately about the individuals and families we serve. Whether it’s an entrepreneur trying to grow a small business, a family trying to make ends meet, or a parent saving for their child’s college fund, we owe it to the people of Arkansas to simplify the tax code, lower the tax burden, and embrace transformation as the path to achieve these goals. As always, my door is open to you. You can reach me on my cell at (501) 837-5190. Thank you for your hard work and dedication to the State of Arkansas.
cc: Governor Asa Hutchinson
Speaker Jeremy Gillam
Amy Fetcher, Chief Transformation Officer
Mike Carroll, Chairman, Transformation Advisory Board
About Lieutenant Governor Tim Griffin
Lieutenant Governor Tim Griffin was elected on November 4, 2014. From 2011-2015, Griffin served as the 24th representative of Arkansas’s Second Congressional District. For the 113th Congress, he was a member of the House Committee on Ways and Means while also serving as a Deputy Whip for the Majority. In the 112th Congress, he served as a member of the House Armed Services Committee, the House Committee on Foreign Affairs and the House Committee on the Judiciary.
Griffin is a graduate of Magnolia High School, Hendrix College in Conway and Tulane Law School in New Orleans, and attended graduate school at Oxford University. He has served in the U.S. Army Reserve for 20 years, was deployed to Iraq with the 101st Airborne Division (Air Assault) and holds the rank of Lieutenant Colonel. Lieutenant Colonel Griffin is currently pursuing a master’s degree in strategic studies from the U.S. Army War College, Carlisle Barracks, Pennsylvania. He also served as U.S. Attorney for the Eastern District of Arkansas and Special Assistant to the President and Deputy Director of Political Affairs for President George W. Bush. Griffin lives in Little Rock with his wife Elizabeth, a Camden native, and their two children.