Arkansas: Taxed Enough Already…
Posted on August 26th, 2009
Arkansans pay almost double the percentage of their income in taxes to the state than Texans. In fact, they pay a full percentage point more than any other state touching Arkansas, and more than two percent more than most of the states that touch an Arkansas border. There are only four states in the entire U.S. that pay more of their income in state taxes. Arkansans pay a larger part of their income in state taxes than California, Massachusetts, or New York.
To talk about economic development in the State of Arkansas without addressing this issue is just so much hot air. There can be no economic development if our tax rates are not addressed and brought into line with the surrounding states so that we can be competitive in small business start-ups. When I rented office space in the Genesis Technology Incubator, I saw innovation after innovation created by brilliant Arkansans that were commercialized and the resulting business moved its operations and expanded to Texas or another low tax state. I asked them several times, “Why are you moving to Texas?” The unanimous answer was either that the tax rates made the move necessary, or that angel investors and venture capitalists had recommended it because the tax structure was terrible in Arkansas – especially the top marginal capital gains rate. In almost every case where capital gains was the issue for the VCs or AIs, the recommended move was to Texas or Tennessee.
Since Arkansas is by necessity playing catch up economically, the only way we can do that is by encouraging the type of small business start-ups that yield large gains and rapid growth. It is time for Arkansas to make a change in how it attracts business. It is time get out of the way of brilliant and industrious Arkansans and let them create the next Walmart or perhaps even better.
[Source: Arkansas Summary Budget Manuals - 2009 - 2011 Biennium - 2008 "B" Book]
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2 Responses to “Arkansas: Taxed Enough Already…”
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JG Ulmer Says:
August 30th, 2009 at 3:45 pmGood stats.
We don’t need scheduled tax holidays, or interstate illegal tax mandates disguised as “streamlined” — that any court of merit will kick out once the actual Big Box motives of the case are fairly considered.
We do need lean, visionary, private sector contributors that do not sign up for the next federal Ponzi boondoggle just because somebody in the Obama Corps read a book about Mother Jones and believed it the business bashing gospel.
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I A Stevens Says:
August 31st, 2009 at 10:40 amThank you so much for this article. I’ve written letters to the editor citing these kinds of statistics, but the liberal media tries to refute me by citing “total taxes paid” compared to states like Mass. rather than taxes per capita. Arkansas has a terrible tax structure, one that negatively affects all of us in both business and personal finances.
