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Senate committee advances cut to top individual and corporate income tax rates amid public pushback
Summary
A bill to reduce Arkansas's top individual income tax rate from 4.9% to 4.7% and corporate top rate from 5.3% to 5.1% (effective Jan. 1, 2023) passed the Revenue & Tax Committee after sponsor presentation and public testimony arguing the cut primarily benefits higher earners.
The Revenue & Tax Committee voted to advance legislation that reduces the state's top individual income tax rate from 4.9% to 4.7% and the top corporate rate from 5.3% to 5.1%, effective Jan. 1, 2023.
The sponsor said the individual rate cut would produce roughly $100 million in ongoing revenue impact and the corporate change about $24 million; the bill is retroactive to Jan. 1, 2023. The sponsor said the change moves Arkansas closer to a single tax table for individuals.
Bruno Showers, senior policy analyst for Arkansas Advocates for Children and Families, testified in opposition and cited modeling from the Institute on Taxation and Economic Policy concluding ‘‘80% of the dollars of this tax cut would go to the top 20% of Arkansans,’’ roughly households earning about $110,000 or more. Showers urged lawmakers to consider alternative uses for the revenue—early childhood education, Medicaid expansion for new mothers and other programs—that advocates say would better serve households on fixed or low incomes.
Committee members asked about the effective date and retroactivity; the sponsor confirmed the change would be retroactive to Jan. 1, 2023 and noted a current surplus that would cover some of the revenue loss. After public comment and discussion, the committee approved the bill as amended by voice vote; the transcript records no roll‑call tally.
