NCPA - National Center for Policy Analysis


February 13, 2007

Arkansas Governor Mike Beebe may not be a man from Hope, but the newly elected Democrat is becoming a voice for tax relief within his party, says the Wall Street Journal.


  • Last year he campaigned on cutting in half his state's 6 percent sales tax on groceries.
  • He recently made good on the promise by striking a deal with a reluctant Democratic legislature; his compromise also repeals income taxes on the poor and cuts sales taxes that manufacturers pay on their utility bills.
  • All told, taxpayers will save $319 million over two years, or what the Governor calls "the largest tax decrease in the history of the state."

The Arkansas Policy Foundation estimates that a family of four will save $234 a year on grocery bills alone, a significant savings in a state where the average taxpayer shells out $3,088 a year in state and local taxes.

And it's all the better that the Governor also resisted the legislature's impulse to lard up the state's tax code with tax credits, says the Journal:

  • The Tax Foundation reports that Arkansas is the 27th most taxed state in the nation with a heavier tax burden than neighboring Texas and Tennessee, neither of which has an income tax and rank 44th and 47th.
  • The state is expected to have an $840 million surplus this year and could therefore afford additional cuts in its 6 percent general sales tax and 7 percent tax on income over $30,100.

Source: Editorial, "Democratic Tax Cutter," Wall Street Journal, February 13, 2007.

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