Today, the Arkansas House of Representatives passed the Milk Tax (House Bill 1451) .  The idea was to subsidize dairy farmers by taxing milk on the wholesale level and calling it a "fee".  Is an income tax a fee on your job or a sales tax a fee on a product you buy?  The same holds true in this case.  HB 1451 is an attempt to hide a tax in processing that will be passed on to the consumer.  For more on other hidden taxes check out Tax Bites here.

The Governor and legislature should be commended for recently cutting the sales tax on groceries, but the Legislature is backtracking by passing a tax on milk.  This milk tax WILL be passed on to consumers if signed by the Governor and will hurt the families that they have tried to help through cuts in the grocery tax- it doesn’t add up.  

Also, if the overall goal is to assist dairy farmers, why are they looking to raise prices on products, in turn reducing demand? 

Make no mistake, the burden from this tax increase will be born by Arkansas consumers, not the wholesalers that this bill impugns.  The tax will most assuredly be passed on to the consumers in the form of higher prices.  What is worse, it will be levied at a time when Arkansas families are struggling to cope with the current economic downturn.

-Grover Norquist

ATR is calling on Governor Beebe to veto this punitive tax on consumers of milk and dairy products.

To see the PDF of both ATR’s letter to the House of Representatives and ATR’s Legislative Alert, click below:

Letter to Arkansas House of Representatives Opposing Milk Tax

Milk Tax Legislative Alert