Ernie Dumas is back again this week to remind Arkansans that tax cuts for the rich are no ticket to economic prosperity, though the wealthy surely do appreciate the windfall.

All that you need to do is hail Bill Clinton and George W. Bush. One raised taxes modestly on high incomes a few months into his first term and the other drastically slashed taxes on high incomes in his first few months in office and again the next two years. Remember the hoopla each time. Every Republican voted against Clinton’s tax increase, which closed the huge budget deficits of the previous 12 years, and they warned of a new depression. The Bush tax cuts were supposed to create a boom the likes of which the nation had never seen.

The actual numbers for the seven and a half years after the Clinton tax increase and a similar span after the Bush tax cuts? Clinton, 23 million net new jobs, Bush 1.1 million net new jobs.

As Dumas notes, this only mirrored the earlier Reagan and George H. W. Bush tax-cutting experience.

Advertisement

And what about Arkansas?

State income taxes have been raised only one time since 1929 if you don’t count two temporary hikes. The permament one was in 1971, when the top marginal rate was raised from 5 to 7 percent. Arkansas experienced some of its sharpest business and job growth in the three years that followed. Until then, Arkansas had by far the lowest per-capita state and local taxes of the 50 states, yet was last or 49th in per-capita income year after dreary year.

We also tested the theory that cutting taxes for the investor class—“the job creators”—will get people off the jobless rolls. In 1999, in his one legitimate claim to be a tax cutter, Gov. Mike Huckabee got the legislature to cut income taxes on capital gains by 30 percent. Things got very bad after that, so bad that Huckabee called the legislature into special session and begged the legislators to raise taxes instantly, including the income tax, so the state would not have to cut people off the health rolls. A 3 percent surtax on personal and corporate incomes for two years put the
state back on sound footing. Huckabee came back on the last day and thanked the lawmakers for their courage.

Full column follows.

Advertisement

50 years of fearless reporting and still going strong

Be a part of something bigger and join the fight for truth by subscribing or donating to the Arkansas Times. For 50 years, our progressive, alternative newspaper in Little Rock has been tackling powerful forces through our tough, determined, and feisty journalism. With over 63,000 Facebook followers, 58,000 Twitter followers, 35,000 Arkansas blog followers, and 70,000 email subscribers, it's clear that our readers value our commitment to great journalism. But we need your help to do even more. By subscribing or donating – as little as $1 –, you'll not only have access to all of our articles, but you'll also be supporting our efforts to hire more writers and expand our coverage. Take a stand with the Arkansas Times and make a difference with your subscription or donation today.

Previous article Lawmaker aims to expose ALEC Next article Poll: Arkansas voters oppose severance tax, sales tax for roads