Arkansas Moves Closer To Ending State Income Tax Under Gov. Sanders

Arkansas Governor Sarah Huckabee Sanders is making strides toward her goal of eliminating the state income tax. On Wednesday, Sanders signed legislation that reduces both individual and corporate tax rates while increasing the homestead property tax credit.

This is the third round of tax cuts since Sanders assumed office in January 2023, with her administration focused on phasing out the state income tax entirely.

“We are moving in the right direction and we’re doing so responsibly,” Sanders said at the signing event.

The new tax cuts are retroactive to January 1, lowering the top individual tax rate from 4.4% to 3.9% and the top corporate rate from 4.8% to 4.3%. Sanders emphasized that these changes align with her belief that individuals manage their finances better than the government, as expressed in her Fox News op-ed: “Who do you trust to handle your money: the government or yourself? Personally, I think you handle your money better than politicians ever could. That’s why I entered office promising to responsibly phase out our state income tax.”

These tax reductions are projected to benefit about 1.1 million Arkansans, saving nearly half a billion dollars. Sanders pointed out the necessity of these measures in light of the economic difficulties imposed by the Biden administration. She argued that prudent fiscal management at the state level is essential for helping residents cope with the rising cost of living.

“Prices are up 20% since President Biden took office and lit trillions of taxpayer dollars on fire, causing an inflationary spiral we haven’t seen since Jimmy Carter was president,” Sanders wrote. She highlighted that the average Arkansas family is now spending nearly $800 more per month on basic goods compared to when Biden took office, with significant price hikes in items like eggs, chicken, and bread.

Sanders described Arkansas as being at a crossroads, with pro-growth policies resulting in increased employment, population growth, and an improved credit rating outlook. However, she warned of the economic headwinds from federal mismanagement and advocated for the adoption of Arkansas’ approach at the national level.

“Polls show that Americans are fed up with Democrats in Washington. After three years of economic failure, that’s not surprising. The good news is there’s another option: fiscal responsibility, smaller government, and lower taxes. It’s working in Arkansas. It’s working in other Republican-led states. And if it’s put in place in Washington, it will revive our national economy,” Sanders concluded.

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