There is a surprisingly broad misunderstanding regarding taxes and to whom those taxed funds belong, even among those who should know better. One example is The Wall Street Journal editors’ mischaracterization of Arkansas’ tax reductions in an editorial, which they subheadlined
Little Rock returns some of its booming revenue to taxpayers.
The “return of revenue” was this:
Governor Asa Hutchinson recently signed legislation that reduces the top state income-tax rate to 5.5% from 5.9%, effective New Year’s Day. The rate will continue to drop in stages to 4.9% by 2025.
Along with this:
The state Department of Finance and Administration anticipates that some 105,000 residents will soon pay no income tax as a result.
And this “sweetener:”
The legislation includes the sweetener of a $60 tax credit for some 535,000 Arkansans who make less than $23,600.
None of this is giving money back to Arkansan citizens; all of it is letting them keep more of their money in the first place.
Even the tax credit is less a giveback than it is a let ’em keep it, albeit after the friction of a tax man middleman has taken its toll.