Taxes and Spending

Academic Journal Publications:

State Taxes and Manufacturing Productivity: A Case Study of Arkansas by ACRE Policy Analyst Jacob Bundrick

From 2002 through 2012, compared with its surrounding states Arkansas saw less growth in the real dollar value of manufacturing, a greater decline in manufacturing’s share of gross domestic product, and a faster rate of job loss in manufacturing. One reason for these outcomes is manufacturing’s slow growth in labor productivity, which is defined as growth in the dollar value of output per manufacturing employee, adjusted for inflation. This study examines the relationship between state and local taxes and labor productivity in manufacturing. It is found that total state and local tax burdens reduce output per manufacturing employee, primarily through sales and corporate income taxes. Legislators across all states should consider the distortionary effects of taxes when making tax-policy decisions because those decisions will influence not only manufacturing productivity, but also the rate of economic growth.

The Determinants of the Severity of State Fiscal Crises by Dr. David T. Mitchell and Dean Stansel

During the most recent recession, many state governments faced substantial budget shortfalls. Those shortfalls are often blamed on external factors like the declining economy or reductions in federal aid. What politicians themselves do, especially during expansionary years—whether they enact spending increases, implement tax cuts, increase the size of their rainy day funds, or some combination thereof—is typically given less attention. We examine those factors and find that fiscal stress tends to be positively associated with spending growth, negatively associated with the size of rainy day funds, and not statistically significantly associated with the unemployment rate or federal aid.

ACRE Working Papers:

There’s Nothing Natural about the State of Government Spending in Arkansas by ACRE Scholar Dr. Jeremy Horpedahl and ACRE Policy Analyst Jacob Bundrick.

Despite being one of the poorest states in the nation, Arkansas has a high state government spending level, even in comparison to similar states. Arkansas has higher state spending per capita than its bordering states and other regional “competitor states,” specifically Alabama, Florida, Georgia, North Carolina, South Carolina, and Virginia. When federal transfers are subtracted from state government spending, Arkansas still has far higher spending than its competitor states. In “There’s Nothing Natural about the State of Government Spending in Arkansas,” Dr. Jeremy Horpedahl and Mr. Jacob Bundrick undertake a comprehensive analysis of how Arkansas got to where it is today as well as the reforms necessary to put Arkansas on a more sustainable path. Arkansas’s spending trends are very similar to those of other states, but the magnitude of Arkansas’s spending and the institutional environment that has shaped it are unique. Given Arkansas’s history of state spending growth, it would be wise to consider some limits to future increases in spending. You can read a one-page infographic of their work here.

Radio:

  • On December 22, ACRE Scholar Dr. Thomas Snyder and ACRE Policy Analyst Jacob Bundrick were guests on Newsradio 102.9 KARN talking with Dan Harpool about occupational licensing (including the new Institute for Justice report), Bundrick’s study of the Quick Action Closing Fund, and all the latest in tax reform news (for both Arkansas and the nation).
  • ACRE Scholar Dr. Jeremy Horpedahl was a guest speaker on NPR’s Marketplace discussing SALT deductions on October 27, 2017. If you weren’t one of the 12 million tuning in, you can stream the full segment here!
  • ACRE Policy Analyst Jacob Bundrick was a guest on the Paul Harrell show on September 27, 2017 talking about his new paper on Arkansas state taxes and manufacturing productivity. You can stream the full interview here.
  • ACRE Scholar Dr. Jeremy Horpedahl and Policy Analyst Jacob Bundrick were guests on the Paul Harrell Program on August 16, 2017. They discussed their new Mercatus working paper, “There’s Nothing Natural about the State of Government Spending in Arkansas.”
  • ACRE Scholar Dr. Jeremy Horpedahl and Policy Analyst Jacob Bundrick spoke in an hour-long segment on the 96.5 FM Dave Elswick Show on August 10, 2017. They discussed state spending and their new Mercatus paper, “There’s Nothing Natural about the State of Government Spending in Arkansas.”
  • ACRE Director Dr. David Mitchell and Policy Analyst Jacob Bundrick spoke in a 2 hour segment on the 96.5 FM Dave Elswick Show discussing Arkansas taxation, subsidies, and other state issues on July 13, 2017.
  • Policy analyst Jacob Bundrick was a guest on Josh Waters 101.3 FM on July 6, 2017 to discuss policy issues in the state.
  • ACRE Director Dr. David Mitchell, Scholar Dr. Jeremy Horpedahl, and Policy Analyst Jacob Bundrick were guests on Newsradio 102.9 KARN on May 1, 2017 where they discussed Arkansas tax reform and other state issues.
  • ACRE Director Dr. David Mitchell and ACRE Scholar Jeremy Horpedahl were guests on the Paul Harrell Program on January 4, 2017. They discussed the complexity of Arkansas’s tax system and possibilities for tax reform.
  • On December 28, 2016, ACRE policy analyst Jacob Bundrick and ACRE Scholar Jeremy Horpedahl were on Newsradio 102.9 KARN discussing tax reform in Arkansas.

Op-eds/Commentary:

  • Arkansas Business Status and Future Under The Trump Era Economy transcript of panel discussion featuring ACRE Scholar and UCA Assistant Professor of Economics Jeremy Horpedahl at the 66th Annual Conference of Arkansas College Teachers of Economics and Business. Panel moderator was ACRE Scholar and UCA Associate Professor of Economics Dr. Tom Snyder.
  • To Tax or Not to Tax? op-ed published October 29, 2017 by ACRE Scholar Dr. Jeremy Horpedahl in the Log Cabin Democrat.

Blog Posts:

Learning From Other States On Tax Reform posted on The ACRE Review on May 15, 2018.

Making Cents of $18 Million by ACRE Scholar Dr. Jeremy Horpedahl, posted on The ACRE Review February 29, 2016.

Taxes Take their Toll on Arkansas Manufacturing by ACRE Policy Analyst Jacob Bundrick, posted on The ACRE Review July 10, 2015.

Videos: