“There is significant evidence that reductions in marginal state tax rates encourage state economic growth …Rates on productive behavior should be reduced.” “Reduce the state’s income tax…repeal the state’s capital gains tax.” Arkansas Policy Foundation, Murphy Commission project, 1998


(May 2017) Arkansas state legislators cut taxes for low-income Arkansans1 and military retirees in this year’s 91st General Assembly but failed to reduce taxes on job creators.  The result?  Arkansas’ job creation rate trails the U.S. average by a wide margin nearly eight years into the third longest economic expansion in U.S. history.


Arkansas payroll employment was 1,161,4002 when the current economic expansion started in June 2009.3  It was 1,243,200 in April 2017, a 7.0% increase.  Total U.S. employment, by contrast, grew from 131,021,000 (June 2009) to 146,063,000 (April 2017), an 11.5% increase in the expansion.


Low Tax States in Region Outpace Arkansas


States in the region that do not tax capital outpaced Arkansas in jobs creation.


         Florida jobs increased 18.4% in the same period (7,221,100, June 2009; 8,552,500, April 2017)


         Texas jobs increased 18.6% (10,320,000, June 2009; 12,248,100, April 2017).


         Tennessee jobs expanded 15.7% (2,602,800 in June 2009; 3,010,500 in April 2017).


Expansion is Third Longest


Arkansas’ weak employment growth occurs against the backdrop of the third longest economic expansion in U.S. history.  The Wall Street Journal reported recently, “At 94 months, the U.S. economic expansion ranks No. 3 since records began in 1854.”4 The postwar average is 58.4 months.5


–Greg Kaza

1  “Legislature Begins 2017 Session With Income Tax Cuts and Medical Marijuana.” Jan. 18, 2017.  “Legislature Approves $13.4 Million Tax Cut for Military Retirees.” Feb. 9, 2017. Arkansas State Senate, “Senate Weekly Session Updates.”

2  U.S. Bureau of Labor Statistics, www.bls.gov

3  National Bureau f Economic Research, http://www.nber.org/cycles/cyclesmain.html

4  “Long Expansions.”  Wall Street Journal, April 10, 2017

5 Only six expansions since 1854 have been longer in duration:  March 1991-March 2001 (120 months); February 1961-December 1969 (106 months); June 2009- (94 months); November 1982-July 1990 (90 months); June 1938-February 1945 (80 months); and November 2001-December 2007 (73 months).