Middle-Class Tax Cut
Governor Asa Hutchinson's Middle Class Income Tax Cut
In his first major act in office, Governor Asa Hutchinson signed his Middle Class Income Tax Cut into law, fulfilling his top campaign commitment. This tax cut will return as much as $540 annually to nearly 500,000 taxpayers, and is the largest income tax rate reduction in the history of Arkansas.
|Net Taxable Income||Tax Savings|
The tax cut lowers the top 7% rate to 6% and the 6% rate to 5%. In a two-worker household this reduction is available for both earners, meaning a middle class Arkansas family with two wage earners could see savings of up to $1080 per year.
Adam and Melissa Koehler of Cabot, both educators, accompanied Governor Hutchinson as he signed the tax cut into law. They would save more than $500 annually under the new law.
The Governor’s tax cut received broad bi-partisan support in both chambers, which demonstrates a strong desire in Arkansas to provide relief to taxpayers, and make our tax code more competitive, starting with the middle class.
|Tax Bracket||2015 Tax Rate||2016 Tax Rate|
|$21,000 - $35,099||6.0%||5.0%|
|$35,100 - $75,000||7.0%||6.0%|