January 10, 2018

It’s All About the Context: A Closer Look at Arkansas’s Income Tax

ITEP Work in Action

The tax task force is rounding out its extensive review of the Arkansas tax code this week by looking at one of the most contentious tax topics these days: income taxes. So, are we a high-income-tax state or a low-income-tax state? In Arkansas, it depends a lot on how much money you make, and how you make it. For example, retirement income is exempt for the first $6,000; military retirement income is completely exempt; there are border-city exemptions if you work in Texarkana; and capital gains income from things like stocks or real estate sales is taxed much more leniently than wage income. To sort this all out, you have to look at the tax code as a whole.

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