Ernie Dumas explains this week that the only meaningful measure of tax burden — gross taxes on a per capita basis — puts Arkansas about 30 spots down from the 14th claimed by the Kochheads.
But first, let's acknowledge a small truth in the AFP ads. State taxes and debt did rise significantly from 1999 through 2006. But the governor who pushed all those taxes and new debt was Mike Huckabee, a Republican. He raised more taxes — three sales tax increases, a temporary personal and corporate income tax increase, motor fuel taxes, tobacco taxes, liquor taxes, a giant tax on nursing home residents, and others — and increased the state debt more than any governor in Arkansas history. He coerced Democratic and Republican legislators and, at one point, the voters in going along with the taxes and borrowing.
The AFP ads, using figures from the business-oriented Tax Foundation, say Arkansas this year has the 14th highest per-capita tax burden in the country and a worse-than-average business tax climate.
The Tax Foundation doesn't rely on the actual taxes collected by each state; that's too simple. It constructs a theory about taxes and formulas to implement it so that states with income taxes tend to look worst.
If you add all the taxes actually collected by the state and local governments and divide the total by the population — you can do the numbers at home — Arkansas comes out not 14th but 47th among the states. All the surrounding states are higher. Now, the states distribute the tax burden in different ways, and Arkansas does it most unfairly, putting it most heavily on working folks with modest incomes with sales and excise taxes. But real numbers are the only way to measure each state's tax policy.
The Tax Foundation abuses poor states like Arkansas unmercifully. It says Arkansas levies a 3-percent surtax on corporation income, a brief tax that the Democratic Arkansas legislature repealed in 2005. It assigns to Arkansas taxpayers a share of the mineral severance taxes collected in other states like Alaska, Texas, Oklahoma and Wyoming. See, since Alaska's 22.5 percent production tax on oil and gas (thanks, Gov. Sarah Palin!) is paid by the producers and not by local people, the Tax Foundation assigns those taxes to people in other states, like Arkansas, that consume the petrochemical products. Florida levies a high sales tax but the Tax Foundation says tourists pay it so it doesn't count as much of a per-capita tax for Floridians.
You will note that states without income taxes show up as low-tax states in Tax Foundation rankings although the actual numbers show them as high-tax states.
You can believe the Kochs' hired hand, Teresa Oelke, and her pack of policy fiction, or maybe you want to look at the table compiled by state tax administrators, which has Arkansas at 47.