As the 89^th General Assembly of Arkansas speeds forward on efforts to cut taxes for high-income earners and corporate investors, a timely report dispels the notion that tax cuts lead to economic growth. Our national partner, the Center on Budget and Policy Priorities, examined states that made personal income tax cuts in the 1990s and 2000s. In both time periods, the tax cuts failed to produce the promised job creation and corresponding economic growth.

From the report:

• Of the six states that enacted large personal income tax cuts in the years before the Great Recession of 2008, three states saw their economies grow more slowly than the nation’s in subsequent years, and the other three saw their economies grow more quickly.
• States with the biggest 1990s tax cuts grew jobs during the next economic cycle at an average rate one-third the rate of states that were more cautious.
• The biggest tax-cutting states also had slower income growth. In none of these states did personal income growth in the next economic cycle exceed inflation.

It’s important to note that the three state economies that grew more quickly are major oil producing states. The cost of oil tripled over the period of the years measured, propping up the overall economic performance in other sectors. As Arkansas is not considered a major oil producing state, it would be foolish to compare the growth of Texas and Oklahoma to the promised growth legislators project with tax cuts for corporations and high-income Arkansans.