ARKANSAS (KNWA/KFTA) — Arkansans will officially see tax cuts in 2022 after Gov. Hutchinson signed the bill into law Thursday.
The new cuts are expected to impact everyone, but those in the top tax brackets could see the most savings, according to economist Jeff Cooperstein.
“The absolute dollar amount is much greater when you’re talking about higher income levels,” Cooperstein said.
The tax cuts will lower the state’s revenue over the next few years, but Cooperstein said the state is currently running a surplus.
Under the plan, the top income taxes will decrease from 5.9% to 4.9% over the next four years. It will also consolidate the lower and middle income tax brackets. Individuals with lower incomes will also be eligible for a tax credit.
At the bill signing Thursday, Gov. Hutchinson said an Arkansas family making $42,000 year would save more than $400 under the new plan.
The plan is estimated to cost the state about $500 million. It will go into effect 2022.