In Fiscal Year (FY) 2013, Arkansas collected $10.7 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average Arkansas taxpayer can afford this level of taxation.
As shown in Chart 1 below, Arkansas’s state and local tax burden (tax collections divided by personal income) was the twenty-fourth lowest in the nation for FY 2013 at 9.9 percent—this is -4 percent below the national average of 10.3 percent. As shown in Chart 2, Arkansas’s tax burden has grown 36 percent to 9.9 percent in FY 2011 from 7.3 percent in FY 1950.
Arkansas’s has a high sales tax burden (3.5 percent, 8th highest) which is partially offset by a low all other taxes burden (0.8 percent, 50th highest). The property and income tax burden all hover around the national average.
Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Arkansas—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.
The Arkansas counties with the highest local government tax burden include: Desha County, AR (2.9 percent), Van Buren County, AR (2.6 percent), and Howard County, AR (2.5 percent). The Arkansas counties with the lowest local government tax burden include: Cleveland County, AR (0.8 percent), Perry County, AR (1 percent), and Lincoln County, AR (1.1 percent).
J. Scott Moody has over 18 years as a public policy economist with a specialty in tax policy and has over 180 publications. He has worked for numerous national and state-based think tanks such as Federalism In Action, Tax Foundation, Heritage Foundation, and The Maine Heritage Policy Center.