LITTLE ROCK, Ark. — Republican gubernatorial hopeful and former U.S. Rep. Asa Hutchinson said Tuesday he wants to gradually cut Arkansas' individual income tax rate, starting with a plan to reduce rates for the state's middle class.
Hutchinson said that if elected, he would seek during his first year in office to drop the income tax rate from 7 percent to 6 percent for people earning between $34,000 and $75,000 and from 6 percent to 5 percent for people earning between $20,400 and $33,999.
For someone making about $50,000 per year, Hutchinson said his tax plan would result in about a $300 tax cut per year.
"This is money that will be spent by the taxpayers," Hutchinson said. "It will help grow our economy and it will create jobs. And ... it creates a more fair tax structure compared with our surrounding states."
Hutchinson said after the initial cuts, he would work with state lawmakers to hammer out more reductions as surpluses in state revenue and growth in the state's economy allow.
Hutchinson said the tax cuts under his plan would cost about $100 million and would affect more than a half-million people in Arkansas. He also said his proposed income tax cuts can be paid for with existing growth and surplus funds.
"We will maintain our commitment to fund education," Hutchinson said. "There's not any cuts involved. That is off the table."
Hutchinson, Little Rock businessman Curtis Coleman and state Rep. Debra Hobbs are seeking the GOP nomination for governor. Former U.S. Rep. Mike Ross is seeking the Democratic nomination.
Democratic Gov. Mike Beebe is term-limited and can't seek re-election next year.
Hutchinson called for a gradual reduction in the state's income tax months ago and Tuesday marked the unveiling of specific figures in his proposal. He is far from the only candidate to advocate cutting taxes.
Ross last month called for a gradual reduction in the tax that Arkansas manufacturers pay for repairing or partly replacing machinery. He proposed phasing out nearly all of the tax over time and estimated that eliminating that tax would eventually cost Arkansas about $40 million per year.
"Since launching his campaign, Mike Ross has said he would implement income tax cuts that target working families who need it the most," Ross campaign spokesman Brad Howard said in a statement on Tuesday.
Coleman, meanwhile, said Hutchinson's proposal doesn't go far enough.
"Cutting personal state income taxes will help — and most importantly provide much needed relief to most hard-working Arkansans — but in order to create a pro-jobs, business-friendly economic environment right here in Arkansas, it is crucial that we also reduce our corporate tax rates and eliminate our capital gains tax," Coleman said in a statement.
Hobbs said she's in favor of cutting the state's income tax, too. But she said: "I would be more inclined to say, 'Whatever we do, let's do it across the board for everyone.'"