Arkansas Advocates for Children and Families: Revisiting the Arkansas Capital Gains Tax Cut: Is It Time to Reconsider?

In 1999, the Arkansas General Assembly passed Act 1005, legislation cutting the Arkansas capital gains tax. Since that time, recent events have dramatically altered the fiscal landscape at both the federal and state levels. In response to an Arkansas Supreme Court mandate, the Arkansas legislature enacted a large sales tax increase in 2004 to fund education. In 2003, the U.S. Congress dramatically cut the federal capital gains tax, and is now on the verge of passing a federal budget that cuts low- income programs and imposes new costs on states. Given recent events, is it now time for Arkansas to reconsider the capital gains tax cut enacted in 1999?