The Wind Is Passing By (Editorial)

Watching action that culminated with the state House of Representatives approving a bill to eliminate the tax on capital gains for future investments in Arkansas reminded us of Christina Rossetti's famous poem, one most of us learned as children:

Who has seen the wind?
Neither you nor I:
But when the trees bow down their heads,
The wind is passing by.

Gov. Mike Beebe was not seen on the floor of the House last Wednesday, but when 18 Democrats suddenly wanted their names removed as sponsors of the bill filed by Rep. Ed Garner, R-Maumelle, it was pretty clear that the governor's influence had just swept through the room. Garner himself referred to "threats," although we doubt it was anything more than typical political gamesmanship.

But in 2011, and when the subject fits generically under the heading of cutting taxes, even the single most popular politician in the state doesn't have enough puff. Garner's bill passed with 53 yea votes to 43 nays and one vote of "present." But Beebe does have something more tangible: veto power.

Beebe has refused to promise a veto of the capital gains exemption bill should it manage to get similar majority approval in the Senate this week. But he has said that he won't sign any tax cuts besides his own proposed half-percent reduction in the sales tax on groceries unless the Legislature also finds a way to balance out the lost revenue.

Tax-cutting is always popular - even cuts that would benefit only those people in a position to make capital investments - but we tend to agree with Gov. Beebe on this one. Arkansas has dodged a bullet by being one of only a handful of states to arrive on this side of the Great Recession without a massive budget deficit, and that wasn't accomplished by padding government services with a lot of nonessentials. Oh, and we do have that $300 million-plus deficit in the unemployment insurance fund that must be dealt with.

The day will come when this state can and should consider broad changes to its tax structure. But that day is not today, and this is a particularly bad time for experimental changes that will cost the government tens of millions without, as even Garner admits, guaranteeing the creation of a single new job. Nor is there any guarantee that those tax-free capital gains would be reinvested in Arkansas.

It might not even be an ideal time for the continued reduction of the grocery tax, but that at least is a tax reduction that benefits all Arkansans, and especially those who need it most and who will certainly send the tax savings back into the local economy.