Governor Asa Hutchinson wants to give income tax breaks to people who move to Arkansas.[i] This means keeping your taxes higher to give tax breaks to new residents for five years after they come.
Arkansas has one of the highest tax burdens in the nation, yet Governor Hutchinson prefers to give tax breaks to new residents. Why?
First, how bad are Arkansas taxes? We laugh at the stupid politicians in California and New York with high taxes that are causing their residents to flee in droves, but Arkansas politicians keep us among the very worst states in the nation. Let’s look at the worst tax states for business climate: (50) New Jersey, (49) California, (48) New York, (47) Connecticut, (46) Minnesota, and (45) ARKANSAS.[ii]
The Governor’s plan to encourage people to move to Arkansas sounds like one of those satellite TV companies that promises you an introductory rate and then raises the price through the roof when the introductory period is over because they don’t think you will switch once you start using their service.
But is that what it is – a plan to trick people to become permanent residents of Arkansas? We don’t think so.
What if it is a plan to help Asa’s cronies? What if it is really about doing a favor for certain big corporations that periodically transfer out-of-state employees to Arkansas with some staying for only a few months or years. Such employees would be unhappy that their salaries don’t go as far because of Arkansas’ high taxes. What if the Governor’s plan was really about doing a favor for someone big corporation like a Walmart. (We are in no way saying this has anything to do with Walmart. We are just using them as an example of a big corporation.)
By the way, Governor Hutchinson’s law firm advertises the fact that Walmart is a client of his law firm.
If the Governors’ plan is really about getting more people to move to Arkansas, his plan makes no sense. If it is about helping the Governor’s big donor friends it makes even less sense for Arkansas taxpayers. Either way, it makes no sense for Arkansas residents to continue to pay high taxes to fund tax reductions for people who are unlikely to remain in Arkansas when their taxes go up to the rate the rest of us have to pay.
Tell your state Senator and Representative:
“No, to introductory tax rates for people who move to Arkansas temporarily! Yes, to lowering taxes for ALL Arkansans!”
[i] “His proposal estimates that reducing the top rate to 4.9% for new residents would reduce state tax revenue by $1.5 million in fiscal 2022 and $4.6 million in fiscal 2023. These estimates are based on 9,000 new residents moving to Arkansas annually, Collins said.” – Arkansas Democrat Gazette 11/15/2020
[ii] https://taxfoundation.org/2021-state-business-tax-climate-index/
