Taxes, Fiscal Responsibility, and the Public Good.

I believe taxes should be as low as reasonably possible while still allowing government to meet its constitutional responsibilities, maintain essential services, invest in necessary infrastructure, and manage the public’s money responsibly.

I consider myself a fiscal conservative, but fiscal conservatism means more to me than simply lowering taxes. It means keeping taxes as low as responsibly possible, controlling spending, maintaining balanced budgets, preserving adequate reserves, avoiding unnecessary debt, demanding measurable results, and making sure government can meet its obligations over the long term.

A tax cut that creates an unsustainable budget or simply shifts the burden somewhere else is not inherently fiscally conservative, just as raising taxes to support unnecessary spending is not fiscally responsible.

I do not want to lock myself into saying taxes must always be lowered regardless of circumstances, nor do I believe government should turn to higher taxes whenever it faces a problem. Either approach substitutes ideology for judgment.

Tax policy should always be evaluated on its merits—based on what Arkansas actually needs, what is fiscally responsible, and what best serves the people of our state. Ultimately, tax policy should benefit the people of Arkansas.

Taxes are not an end in themselves. Their legitimate purpose is to provide the resources necessary for government to protect the rights, security, and interests of the people; meet its constitutional responsibilities; provide essential public services; and make responsible investments that allow individuals, families, businesses, and communities to prosper.

Put simply, the taxes Arkansans pay should ultimately serve the protection, security, opportunity, and benefit of the people of Arkansas.

That means looking first at what resources are already available, whether existing dollars are being spent efficiently, whether unnecessary spending can be reduced, and what approach produces the best value for taxpayers. Government should never collect more simply because it can, and taxpayers should never be asked to finance spending that cannot be justified.

It also means tax policy should not be viewed narrowly as a choice between simply raising taxes or lowering them.

Tax policy includes tax rates, but it also includes deductions, exemptions, credits, incentives, fees, and the way the overall burden is distributed. Each of those policies should be judged by the same basic standard: does it serve a legitimate purpose and produce a meaningful benefit for the people of Arkansas?

A well-designed tax credit can allow working families to keep more of what they earn, encourage savings or investment, expand opportunity, or address a legitimate economic need. A carefully structured incentive can encourage businesses to invest in Arkansas, create jobs, strengthen communities, or bring economic activity that otherwise might not occur.

But tax credits and incentives are not free. They represent revenue the state chooses not to collect, and they should therefore receive the same scrutiny we would apply to direct government spending.

An incentive should not become political favoritism, corporate welfare, or a blank check for a well-connected interest. It should be transparent, targeted, measurable, and tied to actual results.

If Arkansas gives up tax revenue because a company promises jobs, investment, wages, or economic development, taxpayers deserve to know what was promised, whether those promises were kept, and whether the state received sufficient value in return.

Promises kept, not promises made, should apply to tax incentives just as much as it applies to government spending.

That is why I believe tax policy has to be viewed as a whole.

We should look at the total tax burden, not simply whether one particular tax was raised or lowered.

There have been times when Arkansas has lowered taxes in one area while increasing taxes, expanding the tax base, or imposing additional fees elsewhere. In 2017, for example, Arkansas exempted military retirement benefits from the state income tax while increasing taxation in other areas, including certain consumer purchases and digital products. In 2019, Arkansas enacted significant income-tax relief while also increasing fuel-related taxes and vehicle fees to fund highways.

Those individual policies can each be debated on their own merits, but they demonstrate an important point: a tax cut in one place does not necessarily mean Arkansans are paying less overall if the burden is simply shifted somewhere else.

A tax cut should actually reduce the burden on Arkansans, not simply move that burden from one taxpayer, purchase, business, or part of the economy to another.

The same principle applies to credits and incentives. A tax incentive should not be described as an economic benefit simply because government reduced someone's tax liability. The question is what Arkansas received in return and whether that benefit justified the cost to taxpayers.

Arkansas must also approach taxes differently from the federal government because our state operates under a balanced-budget framework. Through the Revenue Stabilization Law and constitutional limits on appropriations and state debt, Arkansas cannot simply rely on continuing deficit spending to finance the ordinary operations of government.

That fiscal reality matters.

When lawmakers reduce recurring revenue, they should be confident that the reduction is sustainable not only in a strong budget year, but through changing economic conditions. A tax cut today should not create a situation tomorrow where Arkansas cannot meet its constitutional obligations, maintain essential services, or is forced simply to shift the burden onto another group of taxpayers.

At the same time, Arkansas’s balanced-budget framework should never become an excuse to raise taxes simply because government wants to spend more. Fiscal responsibility begins with determining what government legitimately needs to do, eliminating waste and inefficiency, prioritizing existing resources, and living within our means.

Because Arkansas ultimately has to balance what it spends with the revenue available to it, tax policy and spending policy cannot responsibly be considered separately.

Every dollar government spends ultimately has to come from somewhere. Every recurring tax cut affects the resources available in future budgets, just as every spending increase creates an ongoing obligation that taxpayers may eventually have to support. Every tax credit, exemption, or incentive also represents revenue the state has chosen to forgo.

All sides of that equation deserve the same scrutiny.

When state revenues consistently exceed what is reasonably necessary to meet our obligations, maintain responsible reserves, and fund essential services, taxpayers should benefit through responsible tax relief. If government does not need the money, it should not keep collecting it simply to find new ways to spend it.

But tax relief should also be examined carefully. We should understand who benefits, who may bear a greater burden elsewhere, what effect the change will have on state and local finances, whether the reduction is sustainable, and whether the proposal actually makes Arkansas more affordable, competitive, and economically healthy.

The same standard should apply when considering a tax increase.

I do not believe taxes should be raised simply because government wants to spend more.

Before asking Arkansans to pay more, government should demonstrate that the need is legitimate, existing revenues are being used responsibly, unnecessary spending has been addressed, reasonable alternatives have been considered, and additional revenue is genuinely necessary.

There may nevertheless be circumstances when Arkansas faces a clearly demonstrated need that existing revenues cannot responsibly meet—such as maintaining critical infrastructure, fulfilling a constitutional obligation, protecting essential services, or responding to a significant emergency. In those circumstances, lawmakers should be willing to consider the most responsible way to address the problem rather than allowing an ideological pledge to substitute for governing.

Any tax increase should face a high standard. It should be limited to what is reasonably necessary, transparent to the public, evaluated for its effect on working families and businesses, and tied to a legitimate public purpose. Whenever practical, taxpayers should also be able to see what they are receiving in return.

The standard should ultimately be the same whether we are considering a tax cut, tax increase, credit, exemption, or economic incentive: Is it necessary? Is it fair? Is it fiscally responsible? Is it sustainable within Arkansas’s balanced-budget system? What does it do to the total tax burden? Does it produce measurable value? And does it ultimately benefit the people of Arkansas?

Tax policy should also recognize that not every taxpayer experiences the tax system in the same way. Income taxes, sales taxes, property taxes, fuel taxes, fees, and other charges can affect families and businesses differently. Lowering one rate while increasing another can shift the burden rather than reduce it. Good tax policy should therefore consider the entire system and its real-world effect on the people paying the bills.

The goal should not be higher taxes or lower taxes for their own sake. Nor should the goal be to hand out tax incentives simply because they can be called economic development.

The goal should be a tax system that is fair, competitive, predictable, understandable, sustainable, and sufficient to meet the legitimate needs of Arkansas without taking more from working families and businesses than reasonably necessary.

It should reward productive investment, entrepreneurship, work, and economic activity where doing so genuinely serves the public interest. And where government provides a tax preference or incentive, it should be able to demonstrate that Arkansans received something of real value in return.

I want to approach tax policy from a simple question:

What do we actually need to do, in this moment, to address the issues Arkansas is facing—and what is the most responsible way to pay for it?

Sometimes the responsible answer may be to cut taxes. Sometimes it may be to leave them where they are. Sometimes the best approach may involve a targeted credit, exemption, or incentive rather than changing a tax rate at all. In extraordinary circumstances, it may require considering additional revenue.

What I will not do is decide the answer before examining the facts.

Keeping taxes low matters. So does maintaining roads and bridges, educating our children, protecting public safety, meeting our constitutional responsibilities, maintaining fiscal stability, and making the investments necessary for Arkansas communities to prosper. Responsible government has to consider all of those obligations together.

Ultimately, taxpayers should be able to expect three things from their government: do not take more than is reasonably necessary, spend what you take responsibly, and demonstrate that the people of Arkansas are receiving value in return.

That is what fiscal conservatism means to me.

It means government should live within its means, collect no more than is reasonably necessary, spend every dollar carefully, maintain the fiscal strength to meet its obligations, and return money to taxpayers when it can responsibly do so.

It also means recognizing that tax policy is about more than a number on a tax rate. It is about how government raises revenue, who bears the burden, what incentives the tax code creates, what public purposes those policies serve, and whether the people of Arkansas are actually better off because of them.

Fiscal conservatism is not about automatically choosing a tax cut or a tax increase. It is about stewardship. It is about making decisions that are sustainable, responsible, accountable, and grounded in the long-term interests of the people of Arkansas.

My commitment is not to a predetermined tax rate. My commitment is to the people of Arkansas—to keep their tax burden as low as responsibly possible, ensure their money is used wisely, protect the long-term fiscal health of our state, and support tax policies that provide real protection, security, opportunity, and benefit to the people those policies are supposed to serve.

With respect for all Arkansans,

Joshua Irby

Paid for by Joshua Irby