Arkansas Gov. Sarah Huckabee Sanders (R) has announced a significant step toward eliminating the state’s income tax. On Wednesday, Sanders signed new legislation reducing both individual and corporate tax rates and increasing the homestead property tax credit.
This marks the third tax cut since she took office in January 2023, with her ultimate goal being the complete abolition of the state income tax.
“We are moving in the right direction and we’re doing so responsibly,” Sanders remarked during the signing ceremony.
The new tax cuts, which are retroactive to January 1, reduce the top individual tax rate from 4.4% to 3.9% and the top corporate rate from 4.8% to 4.3%. These reductions are part of Sanders’ broader strategy to phase out state income tax entirely, emphasizing the belief that taxpayers can manage their money better than the government.
In an op-ed for Fox News, Sanders explained her rationale, stating, “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.”
According to Sanders, these cuts will benefit approximately 1.1 million Arkansans, saving taxpayers nearly half a billion dollars. She highlighted the economic challenges posed by the Biden administration, claiming that reducing taxes and curbing spending at the state level provides Arkansans with necessary financial relief.
Sanders criticized the federal economic policies, noting, “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.” She pointed out that the average Arkansas family now pays nearly $800 more per month for the same goods compared to the start of Biden’s term, citing significant increases in the prices of essentials like eggs, chicken, and bread.
The governor asserted that Arkansas is at a pivotal moment, with pro-growth policies leading to a surge in employment, population growth, and an improved credit outlook. She contrasted this with the economic mismanagement in Washington, suggesting that Arkansas’ success with fiscal responsibility, smaller government, and lower taxes could serve as a model for national economic revival.
“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.
