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Yesterday, I signed into law the most recent tax-cut bill that will lower state income taxes for all Arkansas taxpayers.
I proposed the largest tax-cut bill in the history of Arkansas to give Arkansans around the state a much needed helping hand and to continue my promise of lowering taxes for everyone in the state.
In 2014 the year I was elected, according to the Federation of Tax Administrators, Arkansas collected $8.9 billion in tax revenues. This put the state per capita tax revenues at 16th highest in the United States.
When I ran for governor, I promised to cut our income taxes by $100 million. With the support of the General Assembly, we not only kept that promise, but over the course of the last seven years, we have reduced our income taxes by over $250 million each year.
Almost two years ago our top individual income tax rate was reduced. The top rate was cut down to 6.6 percent and then down to 5.9 percent earlier this year.
Next month, you will see the rate drop to 5.5 percent and then to 5.3 percent the next year. Now after passing the nearly $500 million in tax reductions, we will be getting that number down to 4.9 percent by 2025.
Why is this important? Because it helps every Arkansan, and it also is an economic benefit for our state.
Through conversations with several companies looking to create jobs and move operations to this state, it is clear to me that one of the main factors these companies take into consideration when deciding where to locate is a state’s income tax burden. This change will increase our competitiveness as a state in attracting industry and talent to Arkansas.
The bill also provides relief to low-income taxpayers by giving a $60 tax credit. This will provide a reduction in the state income taxes owed for about 28 percent of all Arkansas taxpayers.
With the $60 credit, the tax cut also completely eliminates taxes owed for over 100,000 low-income Arkansans.
As Governor, it is important for me to balance the needs of our state with responsible tax policy. We have taken a responsible approach to lessening the state’s income tax burden, while also ensuring that the state is still able to meet its obligations.
For the average Arkansas family, this tax break could mean groceries on the table, a new set of tires, or a less stressful Christmas. It allows hard-working Arkansans to keep more of their hard-earned money and also makes Arkansas more competitive with our surrounding states, spurring job creation and economic growth for years to come.
I applaud the work of the General Assembly in passing this tax cut bill. I hope you will contact your state representative or senator and thank them for supporting this legislation.