U of A economist comments on implications of proposed tax cuts

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FAYETTEVILLE, Ark. (KNWA/KFTA) — Gov. Asa Hutchinson outlined proposed income tax cuts on Tuesday, but one local economist said the government will have to come up with a way to compensate for that lack of revenue.

Economist, Jeff Cooperstein, said there are a couple ways the state can address less revenue coming into Arkansas.

“Number one the state has ran a surplus in the last three years, so that means you no longer have a surplus,” Cooperstein said.

Cooperstein said the second way is by cutting state services.

“The state spends a lot of money on the transportation systems, supporting safety infrastructure, and the state spends money on education,” Cooperstein said.

Cooperstein said pro-tax supporters usually say tax cuts will increase spending and grow the economy, making up for less revenue. However, he said that’s not always guaranteed.

“We all like the idea of tax cuts because it means more money in our pockets, but you have to balance that benefit, what are the costs, what are you going to give up,” Cooperstein said.

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