“Market-based economists have opposed the taxation of food for more than 200 years … The outstanding example is France in the (late) 18th Century …. French economist A.R.J. Turgot (1727-1781) … attempted to stop the French government’s dependence on sales taxes and the corve’, a form of forced labor used against the poor.” Policy Foundation research memo, 2002
(January 1, 2019) The state grocery tax–6.0% as recently as mid-2007–is being reduced to 0.125%1 as Arkansas joins 36 states2 with similar policies. A small group of Arkansans have advanced repeal for at least a quarter-century.
Bud Canada (1990s)
Arkansas legislator Bud Canada (1925-2009) was closely associated with efforts to repeal the sales tax on groceries in the 1990s. Canada, a member of the Univ. of Arkansas Razorbacks football team that won the Southwest Conference championship in 1946 represented Hot Springs as a Democrat. Canada “tried numerous times in numerous sessions”3 but grocery tax proponents argued the state could not afford the loss of revenue.4 He advanced a moral argument against the grocery tax.
Axe The Food Tax (2002)
A 2002 proposal5 to repeal the grocery tax was defeated by Arkansas voters.
Arkansas Democrat-Gazette Editorial Page
The Arkansas Democrat-Gazette’s editorial page also advanced a moral argument against the grocery tax under Pulitzer Prize winner Paul Greenberg.
Policy Foundation Role
The Policy Foundation published 10 research memos on the issue (2002-2009),6 advancing the idea that taxing food was a regressive policy. The Wall Street Journal’s editorial page cited the Foundation’s work in a 2007 editorial.
“The Arkansas Policy Foundation estimates that a family of four will save $234 a year on grocery bills alone, a significant savings in a state where the average taxpayer shells out $3,088 a year in state and federal taxes.” Wall Street Journal, (February 13, 2007)
Gov. Mike Beebe
Gov. Mike Beebe (2007-15) served with Canada in the state Senate and supported gradual repeal of the grocery tax. In February 2007, Gov. Beebe signed into law a bill7 that reduced the grocery tax by 50%, from 6% to 3%. The sponsor, state Sen. Bobby Glover, D-Carlisle, cited the Policy Foundation’s research when the bill was considered by the Senate. Gov. Beebe explained his support for the idea at a January 2008 Foundation forum in Little Rock. State surpluses helped pay for the reduction. The rate dropped to 1.5% (2011), setting the stage for this year’s reduction. The tax cut relied on a fiscal trigger that linked paying off bond obligations and resolving decades-old desegregation litigation involving the Little Rock School District.
Arkansas officials recently termed the tax cut the largest in state history.8
Conclusion
Market-based economists have argued for centuries that food taxation is a regressive tax that falls disproportionately on poor and low-income households. The successful reduction of the Arkansas grocery tax provides lessons for citizens. These include the importance of moral authority, sound research and working in a civil, non-partisan manner.
— Greg Kaza
