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Arkansas Lawmaker Seeks to Lower Used-Car Tax

February 15, 2011

LITTLE ROCK, Ark. — Arkansas State Sen. Gilbert Baker (R-Conway) wants to increase the state’s used-car sales tax exemption from $2,500 to $5,000 — at a cost to the state of about $7.8 million.

“It just seems like a tax cut that really helps the moderate-income person who’s working hard who needs a used car,” Baker told the Associated Press.

The lawmaker has rallied several colleagues to his side, including Senate President Paul Bookout, as well as the Democratic majority leader and Republican minority leader.

The success of the act to increase the exemption depends largely on how it fares against the nearly $210 million in additional cuts the legislature will consider this week. Arkansas’ Democratic governor, Mike Beebe, warned last month that no tax cut should be considered automatic — even in a period of economic recovery.

“To pass changes without regard to consequence sidesteps our responsibility as leaders and recklessly endangers the stability we brought to our economy during these tumultuous times,” Beebe said.

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