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Gov. Sarah Sanders said it is still her goal to phase out the personal income tax

Gov. Sarah Huckabee Sanders signs five pieces of legislation into law.
Courtesy Photo
Gov. Sarah Huckabee Sanders signs five pieces of legislation into law.

Last week, Gov. Sarah Sanders and the legislature lowered the state’s income tax and corporate tax rate, during the special session.

In an interview with Talk Business & Politics, Sanders said the tax cuts are a way to help Arkansans dealing with inflation. Sanders also said the tax cuts will also be a way to recruit new businesses to the state.

“When you’re competing with Texas on one side and Tennessee on the other and surrounding states with lower tax prior to the cuts we passed this week, it made it harder for businesses that wanted to come in because their employees aren’t going to make as much money. So it [tax cuts] are a great recruiting tool,” she said.

Sanders said it is still her goal to phase out the personal income tax. The personal income tax is the largest source of revenue for the state. Sanders said phasing out the personal income tax is a long-term process.

“How long that takes is a great question. We want to be responsible about it. We don’t want to put our state in a bad position. Right now, we feel very confident in other areas, particularly sales tax. Arkansans have purchasing power and we’re continuing to see extraordinary revenue come in from that. We’ve run huge surpluses the past couple of years,” she said.

Out of the six states that border Arkansas, two of them – Texas and Tennessee – do not have an income tax, according to the Tax Foundation. Sanders said after the tax cuts, Arkansas now has the lowest personal income tax rate among the states that border Arkansas that still have an income tax in place.

Presidential Endorsement

During the interview, Sanders also answered questions about the presidential race. Last year, Sanders endorsed former President Donald Trump. She said her support for the president has not changed, after he was found guilty by a New York court of falsifying business records. She has said she believes the convictions are attempts by the Democratic Party to win the election.

Sanders, who is the former press secretary for Trump, said she would not be interested in serving in the Trump administration again, if Trump wins the election. She said her focus is on serving as governor.

Copyright 2024 KUAR

Ronak Patel is a political and governmental affairs reporter for KUAR News.