Great schools, safe roads, good hospitals are all needed to develop and maintain a great state. But we keep cutting the taxes required to pay for these necessities. Why?
In the past several years, some of Arkansas’s legislators have joined their counterparts in more than half the states across the country to repeatedly cut taxes. They moved public dollars away from public investments into tax cuts that mostly benefited wealthy households and wealthy businesses.
A new report from the Center on Budget and Policy Priorities shows that Arkansas has lost $757 million public dollars 2022-2023 due to income tax cuts. We are also expected to lose an additional estimated $4.1 billion by 2028. That’s a decline in public dollars of about 8.3%.
These tax cuts in Arkansas will grow more expensive over time. Each year, our state will lose more public dollars. Without this money, the state will have a harder time providing education, strengthening our child care workforce, caring for the children in our foster care system, and addressing our state’s worst-in-the-nation maternal mortality rate.
If we want a stable and prosperous economy, we need public money – in the form of tax dollars – to invest in people’s well-being. It’s everyday Arkansans who drive the economy, through our labor, skills, spending and contributions. But while policymakers have cut public funds to help a select few, we should instead invest and include everyone in our state’s future success.
In the past three years, 26 states have reduced personal or corporate income taxes, or both. Arkansas passed such tax cuts four times during that period.
On a national scale, the cuts will shrink public dollars by about $29 billion per year by 2028, according to the Center on Budget and Policy Priorities. Altogether, they will have cost states around $124 billion by that time. And the costs will continue to grow if lawmakers don’t reverse course.
It doesn’t have to be this way, though. One state will raise at least $500 million a year in new public dollars for child care and school improvements and construction by establishing a new tax on capital gains received by the wealthiest 0.2% of taxpayers. Another state approved a millionaire’s tax that will raise $2 billion annually for public education and transportation.
Arkansas needs our policymakers to update our tax code to prioritize investing public dollars into promoting the success of every Arkansan, not cutting taxes for those at the top.