Florida is discussing a plan to eliminate real property taxes on the first $250,000 of a home’s value and later expand that exemption to $500,000. For millions of Floridians, that would wipe out their property tax bill entirely. For others, it would slash it to a fraction of what they pay now.
Florida’s proposal should force Arkansas to confront a larger truth: We don’t really own our homes. You can pay off your mortgage, maintain the property, and otherwise live within your means, but miss one year of property taxes and the state can take the house you thought is yours. No other asset works this way. If you fully own your car, no one can repossess it because you had a bad year. But a home–the very symbol of stability–remains permanently subject to direct forfeiture. Indeed, even if you go bankrupt, you get to keep your home. But miss one property tax payment, and your house is toast.
And property taxes don’t adjust to income, job loss, medical bills, or retirement. They rise when assessments rise, even if a homeowner’s income doesn’t and expenses do. A person can spend 30 years paying off a house, finally own it free and clear, and still lose it because the tax bill outpaced their paycheck. Ugh.
Even worse, while Florida is debating whether homeowners should pay any property tax at all on a typical middle-class home, Arkansas is still taxing people for the privilege of owning the car they need to get to work.
To be fair, Arkansas has made real progress on tax reform. The state has cut income taxes repeatedly and responsibly. Arkansas moved from a top marginal rate above 7 percent to about half. That is not tinkering around the edges; it is a major structural shift that puts more money in the pockets of working families and makes the state more competitive. And Arkansas did it without blowing a hole in the budget.
But that makes the next question unavoidable: If Arkansas can responsibly cut income taxes, why are we still paying the infamous car tax, a relic of the Bill Clinton era?
The car tax survives for one reason: inertia. It began as just another effort to hide how much we are taxed by making it less obvious that the state was again adding to our burdens.
A tax that hits people in small, scattered amounts is easier for politicians to defend than a tax that shows up clearly on a bi-weekly paycheck. Income taxes are visible. But a tax tied to a car registration is easier to disguise. It doesn’t feel like a tax. It feels like paperwork.
The car tax has lasted so long not because it’s fair or efficient. It’s longevity results from how well it hides the true cost of government. Arkansas does not have to reinvent the wheel. It just has to stop taxing them.
And we haven’t even discussed sales taxes, the quiet pickpocket of state and local government. They take the same bite out of every purchase whether you’re a millionaire or a cashier making $14 an hour. That’s what makes them regressive: The less you earn, the bigger the chunk they take out of your paycheck. A wealthy family barely notices an extra dollar on a loaf of bread. A working family feels it every single week. And because sales taxes hit most necessities, they punish the people who spend the highest share of their income just trying to live.
Like the car tax, politicians love sales taxes, because they’re mostly invisible. They don’t show up on a pay stub or a tax return. They’re at the bottom of that supermarket receipt that you don’t read–quietly siphoning money from the people least able to spare it–with no grand total at the end of the year, like on your paycheck, showing you just how badly you’ve been robbed.
And the irony is that sales taxes hit hardest in the very places where wages are lowest. Rural Arkansans pay more in sales tax as a share of income than folks in Little Rock or Fayetteville. Young families starting out pay more. Seniors on fixed incomes pay more. It’s entirely backwards.
Florida is challenging that approach. Arkansas should pay attention.
This is your right to know.
Robert Steinbuch, the Arkansas Bar Foundation Professor at the Bowen Law School, is a Fulbright Scholar and author of the treatise “The Arkansas Freedom of Information Act.” His views do not necessarily reflect those of his employer.
