The committee has 10 republican members, 3 [Reps. Denny Altes (R-Fort Smith), Gary Stubblefield (R-Branch), and Prissy Hickerson (R-Texarkana.)] of which admitted to blogger Jason Tolbert they voted for the bill. (read details here)
This bill will it the House floor tomorrow afternoon. Here some things you should know and pass on to your representative.
**This information provided by Teresa Oelke, Executive Director of Americans for Prosperity Arkansas.
The Arkansas chapter of Americans for Prosperity opposes HB1902, a bill that increases diesel taxes. Currently, Arkansas has the highest diesel taxes in the region (Missouri, Oklahoma, Texas, Tennessee, Louisiana, and Mississippi) by 2.7 cents. This measure will increase Arkansas’ diesel tax to 7.7 cents higher than all of our surrounding states.
More importantly, diesel taxes are almost entirely passed on to consumers according to a Stanford University study conducted in March of 2010.[1] According to the study, for every one cent diesel tax increase per gallon, Arkansas consumers face an increase retail price of 1.09 cents. Because Arkansas has the third highest per capita receipiants of social security payments in the United States, just over 20% of our population[2], the burden will be felt most significantly by those living on fixed incomes.
Proponents of this legislation admit the tax increase will pull $100 million dollars in tax revenue each year out of the private sector, one billion over ten years. Each year, that is $60 million in NEW taxes or $600 million in new taxes over ten years taken out of the private sector.
Arkansas AFP will score the vote on HB 1902 on their legislative score card.
Overview
In a detailed study of the effects gas and diesel tax increases have on consumer prices, Stanford University concluded “We find that state gasoline and diesel taxes are on average fully passed on to consumers.”[3] In regards to diesel taxes, “Our base findings indicate that diesel taxes are fully passed on to consumers. Increases in state diesel taxes of one cent per gallon lead to an increase in the state retail price of 1.09 cents.”[i]
In addition to keeping the .04 cent diesel tax that is schedule to sunset; this bill adds .05 cents to the diesel tax, for a tally of .09 cents in diesel taxes increases. This will push Arkansas to have the highest diesel tax in the region by 7.7 cents[4] which puts us at a significant competitive disadvantage.
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